Provider Relief Funds: Care for Patients or Boosting Provider Revenues?

Despite nursing facilities’ reporting severe shortages of nursing staff and personal protective equipment,[1] the Department of Health and Human Services (HHS) has revised federal policy to allow health care providers, including nursing facilities, to apply Provider Relief Funds (PRF) to revenues lost during the pandemic “without limitation.”[2]

The Coronavirus Aid, Relief, and Economic Security (CARES) Act[3] created a fund for providers dealing with the coronavirus pandemic.  As described by HHS, Provider Relief Funds, whicheventually totaled $175 billion, are required to be used

to prevent, prepare for, and respond to coronavirus, domestically or internationally, for necessary expenses to reimburse, through grants or other mechanisms, eligible health care providers for health care related expenses or lost revenue that are attributable to coronavirus.

HHS has issued multiple instructions and guidance documents setting out federal policy on how health care providers can spend PRF.  Guidance issued September 19 prohibited providers “from using PRF payments to become more profitable than they were pre-pandemic.” The most recent guidance, issued October 22, explicitly reverses that September 19 policy.

Responding to concerns raised by “stakeholders and Members of Congress” that “PRF should allow a provider to apply PRF payments against all lost revenues without limitation,” HHS revised its policy and “amended its reporting instructions to provide for the full applicability PRF distributions to lost revenues.”  In other words, instead of using Provider Relief Funds to hire desperately needed staff and to purchase essential personal protective equipment, providers are free to use the remaining $35 billion of PRF to compensate themselves for “lost revenues” that are attributable to the pandemic.

In the middle of an ever-worsening pandemic, it should go without saying that Congressionally-appropriated funds must be devoted to the care of patients and their caregivers, not to boosting providers’ bottom lines. 

More than 84,000 residents and workers at nursing facilities have died of COVID-19, 38% of all deaths in the United States.[4]  Sufficient staffing and personal protective equipment are key to preventing or slowing the spread of COVID-19 in nursing facilities.  The billions of public dollars available through the CARES Act must go to protecting public health and the public good.

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[1] Brian E. McGarry, David C. Grabowski, and Michael L. Barnett, “Severe Staffing And Personal Protective Equipment Shortages Faced By Nursing Homes During The COVID-19 Pandemic,” Health Affairs (Aug. 20, 2020), https://www.healthaffairs.org/doi/full/10.1377/hlthaff.2020.01269; Peter Cox, “Minn. Nursing homes in rural areas see staff shortages worsen with COVID-19,” MPRNews (Oct. 26, 2020), https://www.mprnews.org/story/2020/10/26/minn-nursing-homes-in-rural-areas-see-staff-shortages-worsen-with-covid19; Shahla Farzan, “Pandemic Worsens Staff Shortages At St. Louis Nursing Homes, Putting Residents and Workers At Risk,” St. Louis Public Radio (Oct. 9, 2020), https://news.stlpublicradio.org/2020-10-09/pandemic-worsens-staff-shortages-at-st-louis-nursing-homes-putting-residents-and-workers-at-risk.
[2] HHS, “Reporting Requirements Policy Update” (Oct. 22, 2020), https://www.hhs.gov/sites/default/files/reporting-requirements-policy-update.pdf.
[3] https://www.congress.gov/116/plaws/publ136/PLAW-116publ136.pdf.
[4] “About 38% of U.S. Coronavirus Deaths Are Linked to Nursing Homes,” The New York Times (Oct. 20, 2020), https://www.nytimes.com/interactive/2020/us/coronavirus-nursing-homes.html.