CARES Act Funding Update
|HHS allocates $14 billion in targeted “Round Two” payments.
Toyon’s August Series of CARES Updates
Toyon is pleased to provide this update on the CARES Act Public Health and Social Services Emergency Fund (PHSSEF). Toyon’s updates on the PHSSEF will be issued as a series this August. The first update applies to “Round Two” of CARES relief funding from July 2020. During the rest of August, Toyon will be providing these other important updates:
In July, HHS announced a second round of $14 billion related to three targeted distributions from the PHSSEF.
Toyon is preparing estimates on PHSSEF qualification and funding for hospitals nationally. Please contact Fred Fisher if you would like an evaluation for your hospital(s).
Fred Fisher — firstname.lastname@example.org
Toyon’s Covid-19 Funding Resources
HHS Releases $14 billion of “Round Two” Funds
Listed below is further insight on HHS’s Round Two targeted funding distributions totaling $14 billion. Based on a current tally of the PHSSEF, HHS committed to spend $116.4 billion of the $175 billion, leaving $58.6 billion remaining in the fund (not accounting for the HRSA COVID-19 Uninsured Program).
$10 Billion Round Two High Impact Payments
On July 17, HHS announced distribution of High Impact payments eligible to more than 1,000 providers
reporting any of the following (based on data submitted June 15):
- Over 161 COVID-19 admissions between January 1 and June 10, 2020.
- One COVID-19 admission per day.
- A disproportionate intensity of COVID admissions that exceeds the average ratio of COVID
admissions per bed. Responding to an FAQ dated July 22, HHS states the average
admissions per bed ratio (threshold) is 0.54864.
Eligible hospitals are paid $50,000 per COVID-19 admission. In Round One, payment per admission
was $76,975, and included a DSH add-on. High Impact payments received from Round One were
considered in the second distribution.
As of August 3,HHS distributed $9.1 billion of the 10 billion, leaving $900 million HHS will likely be
paying hospitals over the coming weeks.
$3 Billion Round Two Safety Net Payments
On July 10, HHS announced $3 billion in Round Two distribution of Safety Net payments. In this
Second Round, HHS acknowledged shortcomings of qualifying hospitals for safety net payments in
Round One. HHS accounts for recognizing an additional 215 hospitals as safety nets in Round Two by
expanding safety net criteria as follows:
- Like Round One, providers must have an Uncompensated Care Cost per Bed measurement at
or over $25,000. In Round Two, HHS corrected this measurement, “annualizing” this data, so
hospitals with short cost reporting periods are properly evaluated.
- Like Round One, providers must also have a profitability margin of 3% or less to qualify for
safety net payments. In Round Two, HHS expanded this measurement by evaluating 5 years of financial data reported on the Medicare cost report Worksheet G-3 (as opposed to Round One whereby HHS evaluated one year of financial data). Hospitals qualified in Round Two with a
“profit margin threshold of less than or equal to 3% averaged consecutively over two or more of
the last five cost reporting periods.”
- In Round Two, providers still must have a DSH percentage equal to or greater than 20.2% to
qualify for safety net funds (no change from Round One).
$1 Billion in Round Two Rural Payments
On July 10, HHS also announced $1 billion in Round Two distributions for rural providers. In Round Two, sole community hospitals (SCH), Medicare dependent hospitals (MDH), and hospitals in small metro areas with fewer than 250,000 people qualified for payment. Hospitals are eligible for funds of 1% of operating expenses with a minimum payment of $100,000, a supplement of $50 for each “rural inpatient day,” and a maximum payment of $4.5 million. HHS also made payments to rural inpatient psychiatric facilities, inpatient rehabilitation facilities, and long-term acute care hospitals.