The Trump administration will have wide latitude to distribute $100 billion in emergency funding to hospitals bracing for the coronavirus under a massive stimulus package congressional negotiators are racing to finish.
The rescue package, according to the latest draft text and congressional aides, comes with few restrictions on how the money should be distributed to hospitals, clinics and doctors for treating infected patients and trying to mitigate financial losses stemming from the pandemic. Lawmakers will also bump Medicare payments by 20 percent for coronavirus patients.
The funding, one of the last sticking points in high-stakes talks that stretched over five days, amounts to a major win for hospital lobbies, who had recently intensified calls for a rescue fund to offset huge revenue losses from cancellation of lucrative elective surgeries and major costs from a flood of Covid-19 patients needing critical care. Some cash-strapped rural and safety net hospitals have already warned about their ability to make payroll after calling off non-emergency procedures.
Some congressional aides said the loose parameters on how to divide the hospital funding were primarily driven by the urgency of finalizing the nearly $2 trillion rescue package — even as the administration's oversight of a $500 billion corporate aid fund emerged as a major flashpoint in negotiations. The aides said lawmakers simply didn’t have enough time to figure out the best way to equitably divvy up the money based on need, especially since hospitals are still in the early days of managing the pandemic and hot spots are expected to keep emerging.
HHS declined to comment on any discussions about how the department plans to distribute the funds. However, once Congress passes the stimulus, which lawmakers hope to do this week, the lobbying battle will likely shift to the executive branch.
Lawmakers revised earlier versions of the legislation to stipulate the money can be used for medical supplies and equipment, like masks and other protective gear that's in short supply, as well as construction to help deal with a patient surge.
Congress also beefed up oversight and restrictions on the $100 billion pot. Applicants will have to justify their funding requests, which will be audited by the health department's independent watchdog. The providers will also have to report to the federal government “as needed” to show they’re using the funds as intended. Providers will also be barred from double-dipping into the fund for any expenses that will be repaid elsewhere.
The American Hospital Association, along with the American Medical Association and American Nurses Association, had asked for $100 billion late last week, while for-profit hospitals pushed for more than double the amount.
Provider lobbyists in the past several days moved the needle considerably on funding talks, after Senate Republicans' initial plan released late last week left out direct funding. Instead, the GOP lawmakers had called for suspending the 2 percent Medicare rate cut from the ongoing sequester while boosting Medicare payments related to Covid-19 treatment by 15 percent. They later proposed $75 billion in grants and other direct funding in an amended package over the weekend, before House Speaker Nancy Pelosi (D-Calif.) on Monday countered with her own stimulus package that boosted the number to $100 billion.
Senate Democrats led by Minority Leader Chuck Schumer of New York, who has close ties to his state's hospitals, had sought even more — closer to the $225 billion pushed by the for-profit hospital lobby Federation of American Hospitals. Schumer claimed Wednesday’s compromise boosted hospital funding by $55 billion over the Senate GOP’s earlier proposal.
The bill also provides $1 billion to the Indian Health Service, which has had early struggles responding to the outbreak.