HHS announces plan to send out COVID-19 Medicaid payments

Move comes after congressional health leaders criticized delay in distributing funds to eligible providers

HHS will distribute $15 billion to providers that participate in Medicaid or the Children’s Health Insurance Program and have not received payments from the provider relief fund.  (Bill Clark/CQ Roll Call file photo)
HHS will distribute $15 billion to providers that participate in Medicaid or the Children’s Health Insurance Program and have not received payments from the provider relief fund. (Bill Clark/CQ Roll Call file photo)
Posted June 9, 2020 at 1:52pm

The Trump administration announced Tuesday how $25 billion from COVID-19 response legislation enacted this spring will begin to be distributed to eligible providers serving low-income patients during the pandemic.

The announcement comes less than a week after leaders from health committees sent a rare bipartisan, bicameral letter to Health and Human Services Secretary Alex Azar criticizing the delay in distributing the funds.

Congress appropriated $175 billion in health care provider relief funds through two COVID-19 laws. The letter last week from the House Energy and Commerce and Senate Finance Committees urged HHS to act quickly to provide the Medicaid portion of the relief funds, citing the slim margins many safety net providers already operate on.

A senior HHS official said earlier rounds should have been sufficient because while many providers received smaller allocations in the first round of allocations, the second round of funding used a different formula that provided adjustments.

HHS will distribute $15 billion to providers that participate in Medicaid or the Children's Health Insurance Program and have not received payments from the provider relief fund. In addition, $10 billion of provider relief funds will start going to safety net hospitals this week.

“Healthcare providers who focus on treating the most vulnerable Americans, including low-income and minority patients, are absolutely essential to our fight against COVID-19,” Azar said in a statement.

HHS said it will open up its payment portal Wednesday for Medicaid and CHIP providers, which will receive payments based in part on annual patient revenue. That payment will be at least 2 percent of gross revenue from patient care.

Providers that have experienced lost revenue or increased costs due to the pandemic will be eligible. That could include specialties like pediatricians and behavioral health providers.   

In order to qualify for these funds, providers must not have already received funding from a prior allocation and must have billed the state Medicaid program or managed care plans between Jan. 1, 2018, and May 31, 2020.

HHS Deputy Secretary Eric Hargan said in a call with reporters these funds would be distributed starting in 10 days after providers finish submitting data, although it could take longer if follow-up information is needed.

HHS estimates that 1 million health care providers may qualify for funding, and that 62 percent of Medicaid and CHIP providers have already received funding in the previous round.

Safety net hospitals will receive their allocation of $5 million to $50 million through direct deposit.

To qualify, a hospital must have a Medicare Disproportionate Payment Percentage of 20.2 percent or greater, profitability of 3 percent or less, and a level of average uncompensated care per bed of $25,000 or more.   

HHS also said an additional allocation for dentists is still in the works.

“HHS is pursuing an approach to provide relief to dentists more broadly to include dentists that might not be a part of the state Medicaid program,” said Hargan.

The HHS announcement was met with some pushback from hospital and provider groups, who say the funding should be more flexible.

“While we appreciate the emergency funds released by HHS to date, the AHA continues to urge the department to distribute substantial additional funds to hospitals and health systems in an expedited manner as the COVID-19 virus continues to spread, hospitalizations continue to occur, and many Americans continue to forgo care, including primary care and other specialty care visits,” Rick Pollack, president and CEO of the American Hospital Association, said in a statement Tuesday afternoon.

National Council for Behavioral Health President and CEO Chuck Ingoglia said while the announcement showed good intentions, it was “deeply flawed by deeming organizations that received any Medicare funds previously as ineligible to apply.”

“This will result in catastrophic outcomes for mental health and substance use disorder providers serving some of the nation’s most vulnerable individuals,” he said in a statement.

A senior HHS official said while many providers received smaller allocations in the first round of allocations, the second round of funding used a different formula that provided adjustments.