An Update on Federal Funding for Rural Health Care Providers

May 6, 2020

On May 4, VACo staff participated in a conference call with U.S. Department of Health and Human Services (HHS) Deputy Secretary Eric Hargan regarding HHS’s recent distribution of payments to rural healthcare providers as allocated by from the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The purpose of this funding is to address both the economic harm across the entire healthcare system due to the stoppage of elective procedures, and addressing the economic impact on providers incurring additional expenses caring for COVID-19 patients, especially in rural areas.

Under the CARES Act, HHS has begun processing payments from the Provider Relief Fund to hospitals with large numbers of COVID-19 inpatient admissions through April 10, 2020, and to rural providers in support of the national response to COVID-19. This includes $12 billion to facilities admitting large numbers of COVID-19 patients and $10 billion to providers in rural areas. The inpatient care funding related to COVID-19 patients will be distributed to 395 hospitals, which account for 71 percent of COVID-19 inpatient admissions reported to HHS from nearly 6,000 hospitals around the country. The distribution formula to determine what each hospital receives is based on a fixed rate per COVID-19 inpatient admission, with an additional amount taking into account their Medicare and Medicaid disproportionate share and uncompensated care payments. Rural area funding will include payments to rural acute care general hospitals and Critical Access Hospitals (CAHs), Rural Health Clinics (RHCs), and Community Health Centers. 

HHS anticipates that payments under both sources of funding should be available to providers this week. Virginia’s share of high impact funding amounts to approximately $75 million distributed to 4 providers. Virginia’s share of the rural funding amounts to approximately $134 million distributed to 105 providers. Additional information regarding the providers should be available pending review from HHS’s General Counsel. More information on HHS’s response for COVID-19 can be found here.

VACo Contacts: Jeremy R. Bennett and Katie Boyle

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