HHS Secretary Azar Remarks to Press on the Announcement of Additional Allocations of CARES Act Provider Relief Fund

WASHINGTON, April 24 -- The U.S. Department of Health and Human Services issued the following remarks by Secretary Alex M. Azar II:

"We were pleased to see the Senate pass legislation to provide more support for hospitals just yesterday. In the CARES Act, the President secured $100 billion in funding for providers, and that is our focus.

"We are announcing more details on how that money will allow providers to bill for providing care to the uninsured, and when, how, and to whom most of the rest of the money will be allocated.

"As we've said, we will be using some of the $100 billion to pay providers, at Medicare rates, for care provided to the uninsured. These claims can go back to February 4, when CMS created billing codes for COVID-19-related procedures. On a new HRSA website launched today, we've laid out other specific details on that program. As a condition of the program, providers will of course not be allowed to balance-bill uninsured patients. Administrator Engels will provide some more details on the program in a few minutes.

"Our second major announcement today is four new funding allocations from the $100 billion in CARES money: a general allocation, a targeted allocation, a rural allocation, and a tribal allocation.

"Our goal in all of the decisions we're making is to get this money out the door as quickly as possible while targeting it to those suffering the most from the pandemic.

"Money to cover the uninsured is as well-targeted as it can be: it's paying for treatment wherever COVID-19 crops up.

"Then, we know there are two reasons providers are hurting right now. First, almost all healthcare providers have been affected by the need to cancel elective procedures and avoid unnecessary office visits. Second, we know that providers in areas particularly impacted by the virus, such as New York, are hurting even more. Both of these challenges are greater for providers who already operate on thin margins, like rural hospitals.

"That is how we've ended up with what we're announcing today: the uninsured program, a general allocation, an allocation targeted to areas with particular impact, a rural allocation, and an allocation to the Indian Health Service, which predominantly serves rural areas and has seen a serious outbreak in the Navajo Nation.

"We're being abundantly clear about how we've targeted this money because we want to be radically transparent throughout this process. Congress has entrusted us with an immense amount of money to send to providers, and we will be clear and careful about how we're doing it.

"The terms and conditions of receiving these allocations include measures to help prevent fraud and misuse of the funds. All recipients will be required to submit documents sufficient to ensure that these funds were used for healthcare-related expenses or lost revenue attributable to coronavirus. There will be significant anti-fraud and auditing work done by HHS, including the work of the Office of the Inspector General.

"We have already published state-by-state data on the first allocation, and we are working on a breakdown by congressional district. We look forward to providing this kind of information for these new distributions, as well as more granular data, in the coming weeks.

"Let me walk you through the actual allocations now. First, the general allocation is $20 billion in new money to healthcare providers, on top of the $30 billion we sent out last week. That totals $50 billion in general distributions to facilities and providers impacted by COVID-19.

"We are allocating the total $50 billion on the basis of providers' 2018 revenue. As all of you know, we put out the first $30 billion based on Medicare fee-for-service revenue.

"We were transparent at the time: This was a simple formula, based on the data we had, to get the money out the door the fastest way possible. We said that providers with a relatively small share of revenue coming from Medicare would get less, and we said that we would make up for that in the second round.

"That's what we're announcing today: The $20 billion will be allocated so that providers' share of the whole $50 billion is based on the net patient revenue they received from all sources in 2018. This will entail a significant rebalancing for many providers: For example, one large children's hospital received an initial distribution of $233,000; this new general allocation will send that provider an additional $32 million.

"Providers will submit their revenue information via a portal we're launching this week, linked from hhs.gov/providerrelief. Payments will go out weekly, on a rolling basis, as information is validated, with the first wave being delivered at the end of this week.

"Some providers will start receiving payments without having to provide any information right now, because we have their revenue information already through CMS. However, even if they receive their money automatically, they will need to still submit their revenue information for verification.

"As I mentioned, providers will have to sign an attestation confirming receipt of their general funds and agreeing to the terms and conditions. These conditions include protecting patients from surprise billing: Providers will agree not to collect out-of-pocket payments from an out-of-network COVID-19 patient that are greater than what the patient would have had to pay at an in-network provider.

"This protection comes on top of the fact that most major insurers have pledged not to charge patients anything out-of-pocket for COVID-19 care.

"Second, we are announcing a targeted allocation of $10 billion for hospitals in areas with high impact from COVID-19.

"Hospitals have received an email from HHS directing them to apply for this money by providing four simple pieces of information by midnight Pacific Time, April 23: their Tax Identification Number, their National Provider Identifier, their total number of intensive care unit beds as of April 10, and their total number of admissions with a positive diagnosis for COVID-19 from January 1 to April 10.

"This authentication and data-sharing process should take less than five minutes, using a system that will be familiar to most hospitals.

"To that data, we'll add data on hospitals' DSH payments, to help address areas with greatest financial need and the disproportionate burden of the virus on minority communities.

"We will make the formula based on this data public, and the money will then be sent without providers having to do anything more. Because this allocation is targeted, it will be a significant infusion of money for high-impact areas: If, for instance, New York amounts to 40 percent of COVID-19 cases admitted over the given time period, that will be $4 billion straight to New York hospitals.

"Third, we are announcing a rural allocation: $10 billion for rural hospitals and health centers. This money will be distributed as early as next week, based on a facility's operating expenses. It will go to the approximately 2,000 rural hospitals across the country, including their 1,100 affiliated Rural Health Clinics, and to the more than 1,300 freestanding Rural Health Clinics.

"Supporting rural facilities is important because, as all providers see a hit to their margins, rural hospitals are already closer to the brink. Rural hospitals' profit margins are about half that of urban hospitals. Many rural hospitals, in fact, operate on negative margins.

"This $10 billion allocation comes on top of other support we've provided for rural providers, such as the $165 million HRSA is putting out today for rural hospitals and telehealth resource centers.

"Fourth, we are announcing an allocation of $400 million for the Indian Health Service, distributed on the basis of facility operating expenses. This recognizes the strain experienced by IHS providers--especially with the outbreak in the Navajo Nation--and complements other funding provided to IHS and work we've done to expand IHS telehealth capacity. While on that topic, I want to congratulate our newly confirmed IHS Director, Rear Admiral Michael Weahkee, and thank the Senate for confirming him at this crucial time.

"In closing, I want to note that there are still some providers who will still receive further, separate funding. Congress provided $100 billion in general funds, and we're quickly identifying all the providers who are in need. Skilled nursing facilities, for instance, need funds both as part of our general provider compensation efforts and because they are suffering particular costs from COVID-19. We're also looking to ensure that there are payments to dentists and any providers that solely take Medicaid.

"As I said to start, we're putting out all these funds as quickly as possible, as transparently as possible, to those who are suffering the most from this situation.

"The healthcare providers on the frontlines of the pandemic are heroic, and President Trump recognizes that every American healthcare provider has pitched in for this fight in some way.

"We will continue using every regulatory and payment flexibility we have to help providers continue doing their vital work until we've defeated this virus.

"With that, I now want to hand things over to Administrator Engels to discuss the uninsured program."