|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.
Toyon’s COVID-19 Funding Resources (updated for interactive national modeling of funding)
Toyon is pleased to provide this update on developing details from the CARES Act Public Health and Social Services Emergency Fund (PHSSEF). For more information, or to contact any of our team members, please feel free to check Toyon’s website.
Providers that do not attest to the T&C and retain the funds past 45 days will retain payments and be included in HHS’s public release of providers and payments. In HHS’s updated FAQs, the agency states:
“Generally, HHS does not intend to recoup funds as long as a provider’s lost revenue and increased expenses exceed the amount of Provider Relief funding a provider has received.”
Providers must also submit revenue detail by June 3 to receive additional funding from the PHSSEF Distribution.
Please visit Toyon University’s COVID-19 Funding and Documentation Presentation for a discussion on submitting expenses and revenue loss. In HHS’s updated FAQs, HHS indicates this information may be used for other funds, such as the High Impact Fund. HHS states:
“Providers should update their capacity and COVID-19 census data to ensure that HHS can make timely payments in the event that the provider becomes a high-impact provider. Providers can continue to update their information through the same method they used previously.”
Also, providers are required to accept HHS’s T&C and submit revenue information to be considered for additional relief payments.
Toyon’s estimation of unallocated funds (to eligible hospitals) from the CARES Act PHSSEF is below. It is noted some of this funding will be used as part of provider relief funding for skilled nursing facilities (SNF) and HRSA’s Uninsured Program.
$50,000 Payments to RHCs for COVID-19 testing | expenses
Also included in HHS’s provider relief funding update is a distribution of $225 million to RHCs for COVID-19 testing. Payments are based on the number of certified clinic sites. HHS also released RHC T&Cs here.
Provider relief for Skilled Nursing Facilities
As part of the CARES provider relief funding, HHS is distributing $50,000 to each SNF plus a variable distribution between $2000 per bed for smaller SNFs (5 and 25
beds) and $1,8000 per bed for larger SNFs (more than 200 beds). HHS also released SNF T&Cs here.
Toyon is committed to apprising providers with important reimbursement updates and will keep you updated with the latest on UC DSH and COVID-19 funding and documentation. Please feel free to visit Toyon’s COVID-19 Resources for updates on hospital funding estimates, recommendations on documenting cost and revenue losses associated with this public health emergency. Toyon’s website provides information on how to contact Toyon’s team members.
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