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Schumer Led Negotiations For $175B In Relief Funds For Providers To Prepare For And Recover From Pandemic; NY Has Received $10.7B So Far, With More Expected

Senator Says Reversal By HHS At His Urging Now Takes Into Account Extenuating Circumstances For Calculating Lost Revenue; Allows NY Providers To Retain Funds To Keep Their Doors Open And Continue Serving Their Communities  

Schumer: NY Hospitals Are Heroes In The Fight Against COVID; They Deserve The Funding To Keep Their Doors Open

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 announced the Department of Health and Human Services (HHS) has heeded his call to immediately retract the Provider Relief Fund Post-Payment Notice of Reporting Requirements published on September 19. The proposed guidance restricted the ways in which hospitals and providers could use the relief funding and threatened their access to funding that Schumer had secured.

“New York’s hospitals and healthcare put public health above profit throughout the pandemic, working ceaselessly to help pull us back from the brink and beat back the virus,” said Senator Schumer. “Our healthcare network made incredible sacrifices to save lives and prevent infections. These funds that I secured allow them to keep their doors open and continue serving New York. They are vital to ensuring that New York’s health system is equipped to handle not only COVID-19, but also strong enough to provide world-class care for years to come. I’m proud to announce that HHS has retracted the backwards guidance that threatened to close hospitals, and I will keep fighting to ensure all New Yorkers have accessible treatment and care amidst the ongoing pandemic.”

Two weeks ago, Schumer urged HHS to retract their September 19th guidance, arguing that the language failed 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 the inflexible guidance went 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.

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 retraction of the guidance issued by HHS, helps to ensure the long-term future of hospitals, allowing them the flexibility to make up for lost revenue and keep their doors open as they grapple with the effects of the pandemic.

Senator Schumer’s original letter calling for the retraction of the September 19th HHS guidance 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.