North Carolina hospitals and health care providers will receive nearly $400 million in federal relief aimed to help limit the financial impact from the coronavirus pandemic.
The U.S. Department of Health and Human Services (DHHS) has announced that the first federal funding for providers is now being distributed as part of the CARES Act passed by Congress. Of the $12 billion specifically earmarked for hospitals experiencing large amounts of Covid-19 inpatient admissions, N.C. hospitals are set to receive just $79 million due to the relatively small number of patients in the state when compared to hotspots like New York City.
As of this weekend, North Carolina had under 500 hospitalized patients with Covid-19.
In addition to that funding, N.C. hospitals treating low income and uninsured patients will receive just under $30 million in total.
Lastly, the federal relief program is providing funding for rural hospitals not specifically tied to Covid-19 patients. In total, the federal relief appropriates some $10 billion for rural hospitals, $282.5 million of which N.C. hospitals will receive.
“These new payments are being distributed to health care providers who have been hardest hit by the virus: $12 billion to facilities admitting large numbers of Covid-19 patients and $10 billion to providers in rural areas, who are already working on narrow margins,” stated HHS Secretary Alex Azar. “HHS has put these funds out as quickly as possible, after gathering data to ensure that they are going to the providers who need them the most. With another $75 billion recently appropriated by Congress, the Trump Administration will continue doing everything we can to support America’s heroic health care providers on the frontlines of this war on the virus.”
The funding comes on top of an initial $2.5 million for rural hospitals in the state that was allocated last month and is targeted at helping hospitals handle expenses related to the virus response as well as the drop in revenue providers have seen by suspending many of their most profitable procedures. The latest support will go to critical access hospitals (CAHs), rural health clinics (RHCs) and community health centers located in rural areas. Rural hospitals and CAHs will receive “a minimum level of support of no less than $1 million with additional payment based on operating expenses,” DHHS says.
According to the North Carolina Health Care Association (NCHA), rural hospitals in the state are losing more than $145 million per month. Of that, it estimates that $118 million is just from lost revenue from forgoing elective procedures. The additional $27 million is from excess supply and labor expenses.
Those numbers have had many officials worried because of the already precarious financial position many rural hospitals were in before the pandemic. The NCHA says a majority of rural hospitals were operating either at break even or in the red. According to UNC-Chapel Hill’s Sheps Center for Health Services Research, 11 hospitals in North Carolina have closed since 2005.
All in all, the association estimates rural and urban hospitals in the state will face more than $1 billion per month in lost revenue while dealing with the pandemic – though some hospitals across the state have begun discussing moving toward allowing more elective procedures.
HHS also notes that this relief funding will likely not be the only support for medical providers – many of which, including specialty and family practices, are suffering from the same cut in revenue as hospital systems.
HHS says it is “continuing to work rapidly on additional targeted distributions” to some providers including “skilled nursing facilities, dentists, and providers that solely take Medicaid.”