The Department of Health and Human Services today announced that it will distribute over $4 billion in additional funds from the Public Health and Social Services Emergency Fund to rural hospitals and hospitals that serve a high number of Medicaid patients and provide large amounts of uncompensated care. 

In May, HHS distributed $10 billion in funding to general acute-care hospitals, rural health clinics and community health centers located in rural areas, as well as critical access hospitals.

Now, HHS will distribute funds to certain special rural Medicare designation hospitals in urban areas, as well as others who provide care in smaller, non-rural communities. These may include some suburban hospitals that are not considered rural but serve rural populations and operate with smaller profit margins and limited resources than larger hospitals.

HHS estimates this funding will total $1 billion.

In addition, in June, HHS distributed $10 billion to hospitals serving a high number of Medicaid patients and providing large amounts of uncompensated care. One of the criterion for this distribution was that the hospital maintained a margin of 3% or less.  However, HHS now will expand this criterion to be a margin of less than 3%, averaged consecutively over two or more of the last five cost-reporting periods. HHS expects this funding will total more than $3 billion.

For more details on the announcement, see the HHS press release.

In a statement, AHA President and CEO Rick Pollack said, “The AHA is pleased that HHS will be distributing additional funds from the CARES Act emergency relief fund to hospitals serving rural patients and hospitals serving high numbers of Medicaid and uninsured patients, as we have urged. Hospitals with high Medicaid volume provide care to our most vulnerable patients and communities, many of which have suffered disproportionately from this virus. Even before the pandemic these hospitals operated under serious financial pressure, and these funds will help them continue to stay open and provide care to all who need it. Hospitals serving rural patients also face tremendous financial headwinds, with many being forced to close their doors in recent years. This additional funding from HHS will help these hospitals carry out their mission of providing care close to home for patients in communities across the country.

“The AHA continues to urge remaining emergency funds be sent as soon as possible to hospitals and health systems on the front lines, especially as we see COVID cases and hospitalizations rise in many states.”

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