COVID-19 Relief Needed to Keep Medicaid Community-Based Providers Afloat

Prepared for The Commonwealth Fund

As part of its COVID-19 response, Congress established the $175 billion Provider Relief Fund (PRF) under the CARES Act to compensate for lost revenues providers have experienced as visits have dropped and to help providers respond to the pandemic (for instance, purchasing personal protective equipment). The law set these two broad uses, leaving it to the U.S. Department of Health & Human Services (HHS) to determine how to distribute funds among providers.

In practice, however, the PRF has been distributed in a way that disadvantages noninstitutional, community providers that serve high volumes of Medicaid and uninsured patients. HHS has allocated funding to different groups of providers in waves and over time, and has reclassified payments into two types of distribution: general distribution and targeted additional distribution. On October 1, HHS announced a new Phase III of the general distribution, indicating that payments will take account of providers’ revenue losses and expenses attributable to COVID-19 and the PRF payments they have received to date. However, HHS did not provide the payment methodology.

In “COVID-19 Relief Needed to Keep Medicaid Community-Based Providers Afloat,” a new article for The Commonwealth Fund’s To the Point blog, Manatt Health’s Cindy Mann and Gayle E. Mauser explore three specific ways in which community-based providers (i.e., noninstitutional providers, such as behavioral health clinics and pediatricians) that serve Medicaid and uninsured patients have been disadvantaged by the distributions HHS has made to date:

  • They are disadvantaged by the rules for calculating general distribution payments.
  • With the exception of rural health centers, they have been left out of the targeted distributions.
  • The PRF is administratively complex and challenging for small, tightly staffed practices to navigate.

Without more support, these providers are at risk of closing, which will lead to ongoing challenges in healthcare access in the very communities most impacted by COVID-19.

To access the full blog post, click here.

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