AFTER SCHUMER SECURED $10.7 BILLION FOR NY HOSPITALS & PROVIDERS THIS SPRING, FEDS NOW REVERSE COURSE, THREATEN ABILITY FOR FUNDING TO BE USED FOR CRIPPLING LOST REVENUES; AS NY HOSPITALS FACE REDUCED SERVICES & POTENTIAL CLOSURES, SCHUMER DEMANDS FEDS IMMEDIATELY ISSUE NEW GUIDANCE ALLOWING $$$ FOR LOST REVENUES TO PROTECT HOSPITALS & THOUSANDS OF NY PATIENTS
Schumer Led Negotiations For $175B In Relief Funds For Providers To Prepare And Recover From Pandemic; NY Has Received $10.7B So Far, With More Expected
Senator Says New Guidance From HHS Does Not Take Into Account Extenuating Circumstances For Calculating Lost Revenue, And Could Require NY Providers To Return Funds They Need To Keep Their Doors Open And Continue Serving Their Communities
Schumer To HHS: NY Hospitals Already Fought The Hard Battle To Beat Back COVID; Don’t Make Them Fight To Keep Afloat
After tirelessly fighting for New York’s hospitals, health centers and providers throughout the pandemic, including leading negotiations for a “Marshall-Plan” for healthcare that has delivered $10.7 billion to New York so far, U.S. Senate Democratic Leader Charles E. Schumer today called on the Department of Health and Human Services (HHS) to immediately retract the Provider Relief Fund Post-Payment Notice of Reporting Requirements published on September 19, which changes the initial guidance healthcare providers received for utilizing funding from the Provider Relief Fund (PRF) and does not take into account the numerous extenuating circumstances for calculating lost revenue providers are facing this year, threatening the financial future of dozens of New York hospitals, health centers and providers across the state.
Schumer explained the new guidance fails to consider a variety of calculations for lost revenue, including changes to services, cost-cutting measures providers needed to take to manage the economic crisis from pandemic, new contracts and numerous other extenuating circumstances that needed to be taken. The senator argued that this new, inflexible guidance goes against congressional intent to not only help providers prepare for the pandemic, but also to guard against massive revenues losses as hospitals and providers voluntarily shut down all but essential services to stop the spread of the virus and to protect patients who would otherwise seek care.
“New York’s hospitals and healthcare providers made incredible sacrifices throughout the pandemic, putting public health above profit and working ceaselessly to help pull us back from the brink and beat back the virus,” said Senator Schumer. “Despite these incredible sacrifices that helped save hundreds and potentially thousands of lives, New York’s hospitals and providers are once again facing a battle for funding that I specifically negotiated into the CARES Act and fought for in the Interim ‘Corona 3.5’ package for them. HHS must retract the backwards guidance that threatens to close hospitals and deprive New Yorkers of accessible treatment and care amidst the ongoing pandemic.”
“HANYS applauds Senate Minority Leader Schumer for his continued efforts to support New York’s hospitals, health systems and healthcare workers. Federal support for our hospitals remains an essential priority in light of the ongoing COVID-19 pandemic. Unfortunately, recent administration actions threaten our hospitals’ ability to keep the emergency provider relief funds Sen. Schumer secured in the CARES Act,” said HANYS President Bea Grause, RN, JD. “The financial destruction left in the wake of COVID-19 continues to hurt our hospitals as they gear up for future COVID-19 surges. HANYS thanks Sen. Schumer for urging the Department of Health and Human Services to change its reporting requirements. Our hospitals will incur up to $25 billion in COVID-19-related costs and losses by the end of April 2021. They need the flexibility to use this federal emergency funding where it is most needed.”
“Senator Schumer is working tirelessly to ensure that New York hospitals, which have borne the deepest and most protracted financial impact from the COVID-19 pandemic, continue to have the financial resources they desperately need,” said Greater New York Hospital Association (GNYHA) president Kenneth E. Raske. “The $175 billion Provider Relief Fund has enabled hospitals to deliver high-quality care while preparing for a possible second COVID-19 surge. Senator Schumer knows that HHS’s new reporting requirements, which would force many New York hospitals to forego some of these essential Federal resources, will threaten their ability to care for their communities. GNYHA is deeply grateful to Senator Schumer’s for his leadership and ceaseless efforts to protect and strengthen the hospital community.”
Schumer said the PRF was intended to shore up the short-term and long-term futures of hospitals and providers, providing funding to combat the immediate COVID crisis, as well as ensure that health care would continue to be accessible across New York for years to come. Schumer said that absent the Marshall Plan, hospitals and providers would have faced financial losses that would have crippled New Yorkers’ access to health care for years to come. The new guidance issued by HHS endangers the long-term future of hospitals, further burdening providers at a time when they are still grappling with the effects of the pandemic.
Hospitals that received PRF funding can be found here.
Senator Schumer’s letter to HHS Secretary Azar appears below:
Dear Secretary Azar:
I write to express deep concern regarding the impact of the Provider Relief Fund Post-Payment Notice of Reporting Requirements published on Sept. 19, and specifically the changes to the definition of lost revenue that hospitals and health care providers can claim through the Provider Relief Fund. This change comes months after you issued your initial guidance, which care providers have relied upon as they develop plans for handling the financial devastation of the COVID-19 pandemic.
One of my top priorities throughout the COVID-19 relief negotiations has been securing funds to support our health care providers who are leading the fight against the pandemic.
In New York State, hospitals and health systems at the epicenter of the pandemic were forced to take drastic measures to mitigate the impact of the virus and slow its spread. They canceled non- emergent procedures while investing tremendous resources in personal protective equipment, and other actions to increase and maintain health care capacity during the public health emergency. Though necessary, these actions had a tremendous negative fiscal impact on New York’s providers and economy. As New York was the early epicenter of the pandemic and needed to bear a disproportionate effect of these safety measures, many New York providers are experiencing financial shortfalls that are expected to continue at least through 2021, even after considering the Federal relief received to date.
The $175 billion Provider Relief Fund I negotiated with my Republican counterparts was intended to ensure that hospitals and other providers have the tools and resources necessary to care for patients and communities in the face of an extraordinary pandemic response and dire economic challenges. It was also intended to help secure providers’ short and long-term futures, so that this pandemic would not have negative effects on communities’ ability to access health care moving forward. As such, the funding was intentionally designed to offset lost revenues.
The initial PRF guidance you issued in June recognized the need for flexibility by defining lost revenue as “any revenue that you as a healthcare provider have lost due to coronavirus” and that providers may use “any reasonable method of estimating lost revenue.” As such, providers relied on this guidance to make operational and financial decisions over the past several months with an expectation that they would be able to use the PRF funds to address their revenue gaps accordingly.
However, the Sept. 19 guidance changes the definition of lost revenue to “a negative change in year-over-year net patient care operating income.” This new guidance does not account for any cost-cutting measures providers have taken in 2020 to manage the losses from the pandemic, changes to services, new contracts with payers or other extenuating circumstances. Moreover, it restricts the needed flexibility I mentioned above. In addition, the September 19 requirements add significant, complex reporting burdens at a time when providers are still grappling with the pandemic.
I have serious concerns that this new guidance could result in health care providers across the country, including safety-net and rural providers serving our most vulnerable populations, being forced to return these critical funds that have served as a lifeline.
Therefore, I urge you to reinstate the June PRF reporting guidance.