Even as the US continues to face a large number of COVID-19 cases, a substantial portion of a $178 billion fund that Congress allocated to help physicians, hospitals, and other health care professionals and facilities weather the pandemic remains unspent more than a year and a half after the fund was established.
The finding was the focus of a new report from the Urban Institute, funded by the Robert Wood Johnson Foundation.
The COVID-19 Provider Relief Fund was established under the Coronavirus Aid, Relief, and Economic Security (CARES) Act to help health care professionals and facilities providing health care to “prevent, prepare for, and respond to coronavirus” and to “reimburse…eligible health care providers for health care related expenses or lost revenues that are attributable to coronavirus.”
Starting in April 2020, the Department of Health and Human Services (HHS) began to release the funds in 2 categories, for general distribution and for targeted distributions to certain types of recipients, including safety-net hospitals, rural providers, and skilled nursing facilities.
However, the report notes, “more than a year and a half after Congress first approved provider relief funding, billions of fund dollars have yet to be spent.” The authors estimate that of the $100 billion allocated, nearly $27 billion remained in the fund as of October 2021.
The authors note that early in the process, some members of Congress and hospital industry representatives were concerned that under the fund’s eligibility criteria, safety-net hospitals and others who were already under-resourced were systematically disadvantaged. Also, US Representatives Katie Porter (D, California) and Rosa DeLauro (D, Connecticut) expressed concern that some hospitals and health systems might have used grants from the fund to help finance mergers instead of using the money to care for patients.
Indeed, findings from a study published last month in JAMA Health Forum by researchers at the Rand Corporation suggest that “more-resourced hospitals”—those with greater financial assets before the pandemic—received higher levels of CARES Act funding, as did teaching hospitals. In contrast, small, rural “critical care” hospitals received lower levels of funding.
“This disparity in funding may be of particular interest because many critical access and rural hospitals faced financial pressures even before the COVID-19 pandemic,” the JAMA Health Forum authors noted.
Using the most recent publicly available information, the authors of the Urban Institute report reviewed how grants from the Provider Relief Fund have been allocated into general and targeted distributions and paid to health care professionals and institutions. They found that an estimated $26.8 billion remains unspent. Of this, $7.1 billion remained unallocated as of October, and nearly $20 billion had been allocated but had not been disbursed as of May.
In addition, the authors learned that eligible recipients have returned $8 billion in grants for various reasons. Nearly three-quarters of the returned funds were from the general distributions, especially during the first phase. During this phase, a simple formula (based on Medicare reimbursements) was used to enable HHS to disburse funds quickly but “was largely divorced from providers’ needs caused by the pandemic, the intended purpose of the aid,” the report notes.
Several large nonprofit and for-profit health care systems that received funds said they did not need the money because they recovered sooner than expected or had acquired experience managing operations and expenses as the pandemic progressed. Large health systems that have returned funds include HCA Healthcare ($1.6 billion returned), Kaiser Permanente ($500 million), and the Mayo Clinic ($156 million).
Other health care institutions have asked for more time to spend funds beyond their deadline (about a year after they received the money). In a letter to HHS Secretary Xavier Becerra, the American Hospital Association said hospitals continue to incur expenses related to COVID-19 cases and hospitalizations, such as ensuring an adequate workforce and acquiring equipment and supplies, such as personal protective equipment, and should be able to use the funds for such expenses until the end of the public health emergency.
The authors said they expect the fund balance will likely increase because some recipients will need to return unspent money, as currently required by HHS, and the best use of the remaining funds remains to be determined.
“Given greater understanding of how providers have used (or returned) provider relief funds and improved knowledge about how to treat patients with COVID-19, policymakers have an opportunity to consider how best to target remaining relief funds to health care providers who were hardest hit by the pandemic and continue to have the greatest needs,” they wrote.
Published: November 9, 2021. doi:10.1001/jamahealthforum.2021.4427
Open Access: This is an open access article distributed under the terms of the CC-BY License. © 2021 Stephenson J. JAMA Health Forum.
Corresponding Author: Joan Stephenson, PhD, Consulting Editor, JAMA Health Forum (Joan.Stephenson@jamanetwork.org).
Conflict of Interest Disclosures: None reported.
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Stephenson J. Report Tallies Unspent COVID-19 Relief Funds for Health Care Professionals and Facilities. JAMA Health Forum. 2021;2(11):e214427. doi:10.1001/jamahealthforum.2021.4427