Rural hospitals have long been fighting for their survival. According to The Pew Charitable Trusts, since 2010, 128 rural hospitals have closed, including a record 18 hospitals last year. Even more rural hospitals were on track to shut down this year until Congress in March approved $100 billion to health care providers in the CARES Act.
Today, the U.S. Department of Health and Human Services (HHS), through the Health Resources and Services Administration (HRSA), is announced approximately $3 billion in funding to hospitals serving a large percentage of vulnerable populations on thin margins and approximately $1 billion to specialty rural hospitals, urban hospitals with certain rural Medicare designations, and hospitals in small metropolitan areas. HHS is also opening the provider portal to allow dentists to apply for relief. HHS recognizes the urgent need these vital funds play in supporting safety net providers and those serving large rural populations facing financial devastation catalyzed by the pandemic.
“We’ve been distributing the Provider Relief Funds as quickly as possible to those providers who have been hardest hit by the pandemic,” said HHS Secretary Alex Azar. “President Trump is supporting hospitals in continuing to provide COVID-19 care and returning to everyday procedures, especially hospitals that serve vulnerable and minority populations. Close work with stakeholders informed how we targeted this new round of funds to hard-hit safety-net and rural providers.”
As COVID-19 continues to disrupt daily lives, HHS is providing support to healthcare providers fighting the pandemic through the bipartisan CARES Act and the Paycheck Protection Program and Health Care Enhancement Act, which allocated $175 billion in relief funds to hospitals and other healthcare providers, including those disproportionately impacted by this pandemic.
Additional $3 Billion to Safety Net Hospitals
On June 9, HHS announced plans to distribute $10 billion in Provider Relief Fund payments to safety net hospitals serving our most vulnerable citizens. Throughout this pandemic, HHS has continued to maintain an open line of communication with Members of Congress, state and local officials, providers and stakeholders to inform our response to this public health emergency. Accordingly, we learned some acute care hospitals did not qualify for funding from this initial announcement. HHS is now expanding the criterion for payment qualification so that certain acute care hospitals meeting the revised profitability threshold of less than of 3 percent averaged consecutively over two or more of the last five cost reporting periods, as reported to the Centers for Medicare and Medicaid Services (CMS) in its Cost Report filings, will now be eligible for payment. HHS expects to distribute over $3 billion across 215 acute care facilities, bringing the total payments for safety net hospitals from the Provider Relief Fund to $12.8 billion to 959 facilities.
$1 Billion to Certain Rural Providers and Other Providers from Small Metropolitan Areas
In May, HHS announced $10 billion in funding to almost 4,000 rural health care providers including hospitals, health clinics, and health centers. HHS is expanding the existing payment formula to include certain special rural Medicare designation hospitals in urban areas as well as others who provide care in smaller non-rural communities. These may include some suburban hospitals that are not considered rural but serve rural populations and operate with smaller profit margins and limited resources than larger hospitals. They too, have suffered in this pandemic, which is why HHS is responding. HHS estimates the funding announced today will provide relief of over $1 billion to 500 of these hospitals with payments ranging from $100,000 to $4,500,000 for rural designated providers and $100,000 to $2,000,000 for the other providers.
Enhanced Provider Relief Fund Payment Portal and Dentists
In June, HHS announced the launch of the Enhanced Provider Relief Fund Payment Portal where eligible Medicaid, Medicaid managed care and CHIP providers were the first to begin reporting their annual patient revenue information for funding. Today, HHS is announcing this portal and an application process is now open to dentists who may not have previously been eligible to receive funding through the Provider Relief Fund. Eligible dentists will receive a reimbursement of two percent of their annual reported patient revenue and will have until July 24, 2020 to apply for funding through the Enhanced Provider Relief Fund Payment Portal 
. This second phase of General Distribution will continue to expand to include other providers submitting applications for future relief funding opportunities or as directed by HHS.
But in order to ready their facilities for a potential surge in patients, those small hospitals had to forgo many of their most profitable operations. Months later, a few rural hospitals are fighting outbreaks. But others have empty beds, further threatening their viability in an era of shrinking health care options for people living in rural communities.
“If you were already in a very thin margin, and you lose a lot of your operating revenue because you’re making space and personnel available — and then you’re not using them — it’s pretty powerful logic that you’re in big trouble,” said Keith Mueller, director of the RUPRI Center for Rural Health Policy Analysis at University of Iowa.
Pandemic-related federal money has helped struggling rural hospitals stay afloat. But as Congress considers additional aid this month, advocates and policymakers would like to move beyond stopgap measures to change the hospitals’ long-term trajectory.
“We’re due for reckoning in our rural hospital policy,” said Ge Bai, associate professor of health policy and management at the Johns Hopkins Bloomberg School of Public Health in Baltimore.
As the pandemic persists, it’s unclear how long struggling rural hospitals can hang on.
