U.S. Sen. Mike Rounds, R-S.D., and a bipartisan group of other senators sent a letter to Health and Human Services Secretary Alex Azar with concerns about changes in reporting requirements for hospitals. These changes will potentially create uncertainty and financial hardship for hospitals across the country.
“In the midst of the COVID-19 pandemic, our health care providers need more certainty, not less. The CARES Act, enacted in March 2020, established the Provider Relief Fund to reimburse eligible health care providers for health care-related expenses and lost revenues attributable to the coronavirus. Hospitals and other providers received funds and have budgeted accordingly,” the senators wrote in the letter. “However, we are still in the midst of a pandemic and providers continue to face uncertainty in terms of loss of revenue from delayed procedures and care as well as increased expenses related to COVID-19.”
Changes in the Provider Relief Fund reporting requirements will potentially place a burden on rural hospitals in particular.
“New guidance calls on hospitals to report lost revenues attributable to COVID in a specific way: represented as a negative change in year-over-year net operating income from patient care related sources. In earlier guidance in June, HHS stated that providers could report revenues using “any reasonable method of estimating the revenue during March and April of 2020 compared to the same period had COVID-19 not appeared,” Avera Health Director of Media Relations & Corporate Communications and Marketing Cale Feller told the Capital Journal.
“The new definition provides less lee-way for providers, and the senators are saying this could lead to the uncertainty and financial hardship for hospitals. There is a concern that due to this change in definition, hospitals may be required to return funds to HHS that have been received from the PRF. Rural hospitals and those that serve high numbers of low-income, elderly, and severely ill patients — which already operate on thin financial margins — may be especially impacted by this change,” Feller said.
In the Midwest, the COVID surge did not come during the spring and summer as it was predicted to, but Avera still had to close a “significant amount” of its clinic and planned surgery business in order to preserve personal protective equipment to prepare for the surge.
“Basically our hospitals and clinics were ‘empty and waiting.’ The Avera system was losing millions of dollars a day. At the same time, we were faced with a number of new expenses, for example, stocking up on PPE, additional ventilators and ventilation enhancement in patient rooms, temporary barriers and Plexiglas shields, screeners at the doors of all facility, 24-hour COVID hotline staffing, additional marketing expense to inform the public, and more,” Feller said.
Now that South Dakota hospitals are seeing increasing numbers of COVID patients, financial issues are escalating.
“The surge has reached our area, and our COVID expenses continue. Revenues are also challenged. COVID-19 patients are often costly to care for, often with long lengths of stay and ICU care. In numerous cases, reimbursement from Medicare, Medicaid or other payers may not cover all expenses,” Feller said.
Both Avera and Sanford Health are appreciative of Rounds’ efforts to help rural hospitals.
“We are unsure at this time how this change in definition would specifically impact Avera hospitals. We have teams that are continually working on compliance with government regulations. Added requirements do add to our burden – at this time it’s difficult to quantify.
We are grateful for Sen. Rounds’ advocacy and we will continue to monitor what is happening,” Feller said.
“We are grateful for this bipartisan effort to bring a better understanding to HHS about the uncertainty of health care finances during this pandemic, especially for rural areas of the country. When congress passed the CARES Act, it was very deliberate and correct to look at lost revenues for health care systems. CARES Act dollars have proven extremely important to ensure the best possible care is available,’ Vice President of Government Affairs for Sanford Health Corey Brown said.
The letter was signed by the U.S. Sens. Marsha Blackburn (R-Tenn.), John Barrasso (R-Wyo.), John Boozman (R-Ark.), Richard Burr (R-N.C.), Shelley Moore Capito (R-W.Va.), Susan Collins (R-Maine), John Cornyn (R-Texas), Kevin Cramer (R-N.D.), Mike Crapo (R-Idaho), Steve Daines (R-Mont.), Joni Ernst (R-Iowa), Deb Fischer (R-Neb.), Cory Gardner (R-Colo.), Lindsey Graham (R-S.C.), Josh Hawley (R-Mo.), Cindy Hyde-Smith (R-Miss.), James Inhofe (R-Okla.), Kelly Loeffler (R-Ga.), Joe Manchin (D-W.Va.), Jerry Moran (R-Kan.), Lisa Murkowski (R-Alaska), David Perdue (R-Ga.), James Risch (R-Idaho), Marco Rubio (R-Fla.), Tim Scott (R-S.C.), Kyrsten Sinema (D-Ariz.), Dan Sullivan (R-Alaska), Thom Tillis (R-N.C.) and Roger Wicker (R-Miss.).