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With Deficits Looming, States Can Use NASHP Template to Track Federal Relief Funds to Hospitals
Hospitals and health care providers need financial support to respond to the pandemic and for future viability. In response, Congress allocated billions of dollars in relief funds through multiple existing and new programs. The disbursement of these funds is uncoordinated and so are public reports that track where the money is going, but states need to know how much these health care systems are getting.
On July 6, 2020, the Small Business Administration (SBA) released Paycheck Protection Program (PPP) loan-level data, which highlighted that health care providers have received more PPP funds than any other industry. Hospitals and physician groups have experienced dramatic revenue loss as a result of states’ stay-at-home orders and their need to rapidly purchase personal protective equipment and establish new safety protocols to confront COVID-19.
States have a clear interest in hospital solvency as a critical community resource and need to know how much large providers have received from the federal government in order to inform their own funding decisions. However, the new PPP data adds to a number of data sources state officials must sift through to track how much support providers in their state are receiving. To better inform their own funding decisions and more easily track these large provider-level distributions, state officials can use this National Academy for State Health Policy’s (NASHP) reporting template to collect the critical information directly from providers. This approach avoids challenges with identifying numerous federal data sources and the technical issues associated with merging data.
The Coronavirus Aid, Relief, and Economic Security Act (CARES Act), established the PPP to provide forgivable loans that incentivize businesses to retain employees on their payrolls during the early stages of the COVID-19 pandemic. In addition to the PPP, there have been a multitude of other payments to health care providers through the Families First Coronavirus Response Act, CARES Act, and the Paycheck Protection Program and Health Care Enhancement Act. As the money has been allocated, the federal government has released data about its distribution in a patchwork fashion, making it difficult for state officials to understand which facilities in their communities are receiving funding, from what sources, and for how much. To date, there is data available for the PPP and the Provider Relief Fund for general distributions, high-impact targeted allocations, rural targeted allocations, safety net hospitals, and skilled nursing facility targeted allocations. NASHP is tracking the latest distributions of federal funds in its chart, COVID-19 Federal Funds Earmarked for Hospitals, Providers, and States.
In order for state officials to possibly help support providers during the pandemic, they must have an accurate report of federal investments to date of taxpayer funding to hospitals. This has been challenging due to the necessarily rapid – but at times chaotic – dispersals. Congress allocated funding to multiple federal agencies – the Centers for Disease Control and Prevention, Health Resources and Services Administration, Department of Health and Human Services, SBA, and Treasury Department – which in turn distributed funds through siloed application and reporting systems. In an effort to increase transparency, these agencies have released some data detailing which facilities have received funding thus far. The size of the data files and varying platforms from different agencies may make it difficult for state policymakers to crosswalk the information and identify how much specific facilities have received in aggregate. The PPP data file for entities that received over $150,000 includes over 66,000 entries alone and the Provider Relief fund file has more than 200,000 facilities listed.
The only stakeholders that are able to see the entirety of the funding picture are hospitals and providers themselves – making it necessary for state officials concerned about hospital solvency and the federal and state funding landscape to request the data directly from them. NASHP, in consultation with state officials, recently drafted a template for states to use or revise that seeks timely information detailing which hospitals are already receiving federal coronavirus relief funds. The template seeks information about hospitals and their affiliates that can include labs, physician practices, rural health and behavioral health clinics, surgery centers, and nursing homes. It recognizes that hospitals are under great pressure and as a result is designed for their ease of reporting.
Understanding how much financial support hospitals have or are receiving may become increasingly important as states continue to open up and allow hospitals to perform non-essential services – changing the revenue streams available to hospitals. COVID-19 is proving to be an enduring crisis that will likely require multiple rounds of federal and state support for hospitals. In order for state officials to hold these health systems accountable and help ensure their financial viability in the wake of COVID-19, they may require more robust hospital transparency measures. While this template is an immediate, short-term tracking tool of federal COVID-19 relief funds, NASHP will soon release model hospital transparency legislation designed to provide more specific information about the financial condition of a state’s health care system.
Support Grows for Congressional Action to Boost Medicaid Matching Funds to Help States
Today, a coalition of 20 national organizations representing consumers, health care providers, and health plans sent a letter to Congressional leaders supporting a recent National Governors Association’s request that they increase federal matching funds for Medicaid by 12 percent.
In late April, the nation’s governors reached bipartisan support for a broad set of recommendations to help states address the COVID-19 pandemic and its devastating impact on their budgets. In their letter, the governors asked Congress to increase the states’ Federal Medical Assistance Percentage (FMAP) to 12 percent, retroactive to Jan. 1, 2020, to be maintained until the nation’s unemployment rate stabilizes at 5 percent.
In 2009, Congress temporarily raised the FMAP rate by 12 percent during the Great Recession to help states with shortfalls. In March, Congress again temporarily raised it by 6.2 percentage points in its Families First Coronavirus Response Act, but governors and their allies point out that more is needed.
States are reeling under the demands to address the COVID-19 pandemic and the economic impact of the disease. With state revenues significantly lower than projections, states are raiding rainy day funds and planning for budget cuts.
In their letter endorsing the governors’ request for a FMAP rate hike, 20 organizations that represent a wide range of health care and insurance plans, including the Blue Cross Blue Shield Association, America’s Health Insurance Plans, the American Federation of State, County and Municipal Employees (AFSCME), the Service Employees International Union (SEIU), the American Medical Association, and America’s Health Insurance Plans, cited a Congressional Budget Office forecast that predicted states would face shortfalls of approximately $650 billion in the next three years.
“As a direct result of the COVID-19 pandemic, state leaders will be forced to enact deep Medicaid cuts that could cause millions of Americans to lose access to critical health care services,” they noted. “To avoid these consequences and to protect health care access for over 70 million Americans, we call on Congress to enhance federal financing for the Medicaid program by at least 12 percentage points, with additional support for those states hardest hit by the economic shockwaves.”
The supporters noted that private-sector and government agencies are working together to support “frontline health care heroes, patients, and businesses. “Increasing FMAP will support our state leaders, providers, and tens of millions of Americans who depend on Medicaid every day,” they wrote.
Follow the Money – A Template for States to Track Federal Relief Funds by Hospital
Updated June 12, 2020
Last week, states received a minimum of $1.25 billion from the Coronavirus Aid, Relief, and Economic Security Act (CARES Act, Title V) to use at their discretion to address issues related to the pandemic. These dollars may be used to fund necessary COVID-19-related expenses that have not been addressed in their most recently passed state budgets and are limited to expenses that occur between March 1 to Dec. 30, 2020.
To make funding decisions amid many competing priorities, states could benefit from a snapshot showing all federal coronavirus relief funds that have already been received by hospitals and their affiliates within their states. It remains unclear if and when the federal government will make such information available and whether that data will be by hospital.
States need this information now to make equitable decisions in parsing out the new Title V funds and to ensure that adequate pandemic-related funding is available to safety net providers and others in great need. Importantly, the initial $50 billion sent to hospitals by the federal government was allocated on a formula based on Medicare fee-for-service payments, which leaves out a substantial number of providers.
In a recent letter to the Department of Health and Human Services (HHS), the Medicaid and Children’s Health Insurance Program (CHIP) Payment and Access Commission (MACPAC) identified the shortcomings of using Medicare data to base CARES Act hospital allocations. For example, those reimbursements do not generally account for important state providers, including those providing non-hospital-based mental health and substance use disorder services and home- and community-based care and pediatric services, all of which have been affected by the pandemic and serve significant numbers of each state’s Medicaid enrollees.
The National Academy for State Health Policy (NASHP), in consultation with state officials, has drafted a template that states can use or revise to seek timely information detailing which hospitals are already receiving federal coronavirus relief funds. The template seeks information about hospitals and their affiliates, which can include labs, physician practices, rural health and behavioral health clinics, surgery centers, and nursing homes.
Because the initial funding went directly to hospitals and not health systems, the NASHP template identifies funds received by individual hospitals. The template recognizes that hospitals are under great pressures and as a result is designed for ease of reporting. It is structured to facilitate speedy information gathering to assist governors and state legislators target newer federal relief funds as effectively and as soon as possible.
States, confronted with sharp revenue declines and a likely future of challenging budgets, need to make tough decisions about apportioning the new federal funds at their disposal and about future budget allocations. This template is designed as a “quick hit” to determine which hospitals – and other providers affiliated with them – are getting funding and how much each is receiving now and over the next months as new federal relief fund disbursements continue.
Governors may wish to issue executive orders or require hospitals to report their federal relief funding to date, using such a template, as a condition when requesting Title V funding in order to ensure the state has complete information about current spending before allocating additional dollars. Importantly, this template has a limited application to provide a snapshot of what facility is receiving new federal dollars now.
It does not assess hospitals’ remaining needs or shortfalls, nor how much hospitals presently have in reserves because data about those reserves are included in retrospective hospital-audited financial statements and does not include any hospitals’ expenditures from their reserves during the pandemic. Governors may wish to also ask hospitals to document information about shortfalls and needs prior to allocating new dollars.
NASHP will soon release model hospital transparency legislation and additional tools designed to provide more specific information about the financial condition of a state’s health care system. For now, this template can provide policymakers with a model from which to gain insights into which hospitals and their affiliates are receiving federal pandemic relief funds to help them make decisions about allocating CARES Act Title V funding.
Federal Funding Change that Includes Stimulants Allows States to Expand their Substance Use Disorder Initiatives
Since 2017, the federal government has awarded $2 billion to states specifically for opioid prevention, treatment, and recovery. But a new spending package passed last month allows states to use federal funds to address the growing use of stimulants, including cocaine and methamphetamine, that are emerging as the newest wave of drugs fueling the overdose crisis in many states.
The addition of stimulants to federal funding presents both challenges and opportunities for states. They will need to develop initiatives that also address stimulant use, though currently there are few evidence-based treatment guidelines for this. On the plus side, the new funding flexibility allows states to address the social factors that contribute to all substance use disorders (SUD), instead of focusing on a single class of drugs.
Background
To date, federal funding to address the opioid epidemic has flowed from the Substance Abuse and Mental Health Services Administration (SAMHSA) through State Targeted Response (STR) and State Opioid Response (SOR) grants. The latest spending package includes a seemingly minor language addition that poses a potentially major shift in how states use the funding.
The federal decision to broaden substance categories is a direct response to the quickly-developing threat of stimulants like cocaine and methamphetamine reported in provisional federal overdose data for drug deaths though July 2019. Distinct regional patterns show that stimulants are increasingly prevalent in overdoses primarily west of the Mississippi River, but are growing in eastern and Appalachian states hit hard by opioids. While opioids remain the most frequent killer of Americans who die of drug overdose, the increasing presence of stimulants in this data suggests an emerging “fourth wave” of a drug overdose epidemic that began with prescription opioids and quickly escalated, propelled by heroin and then fentanyl.
Previous iterations of STR and SOR grant funding have given states the opportunity to target funds toward the factors that fueled those waves of opioids. This included prevention initiatives around reducing unnecessary prescribing and diversion of opioids and clinical engagement that was focused on medication-assisted treatment (MAT) for opioid use disorder (OUD). Funds were used to support the development of waivered providers to prescribe buprenorphine, or training for peers with lived opioid experience. The opioid focus was unequivocal.
How States Can Address Stimulant Use
The addition of stimulants to the federal language poses a new set of challenges and welcome opportunities for states. The most pressing issue for both policymakers and clinicians will be treatment – while treatment for OUD can include MAT, often in conjunction with psycho-social supports, treatment for stimulant use currently has no evidence-based medical options, limiting opportunities for clinical intervention to just behavioral mediation.
There is some evidence, however, to suggest that in addition to cognitive-behavioral therapy, contingency management approaches in which individuals are provided with small, tangible rewards for negative urine drug screens can be effective treatment for stimulant use.
Notwithstanding these differences in treatment protocols, states can leverage previous opioid work in their response:
- Care models: Integrated care models emphasizing and reimbursing for team-based care can be adapted to these treatment approaches.
- Reimbursement: States can use 1115 Demonstration waivers to support financing these models and address the Medicaid Institutions for Mental Diseases (IMD) exclusion to expand inpatient opportunities. (The IMD exclusion prohibits use of Medicaid funds for mental health care provided in residential treatment facilities larger than 16 beds.)
- Workforce: States can invest in training and continuing education focusing on stimulant treatment modes for licensed behavioral health providers and non-licensed workforce.
Another major opportunity with this change is that states can explicitly tailor efforts to poly-substance use. Even as opioid overdose deaths have dominated in data reports, media attention, and policy activity in recent years, the majority of opioid overdose deaths reviewed in one recent report from the Centers for Disease Control and Prevention involved at least one other drug. Poly-substance use has been self-reported as near universal by individuals entering treatment specifically for OUD.
States Can Now Address What Fosters All SUD
This federal funding change allows states to use federal grant funds to address the factors that foster SUD, instead of focusing on the effects of a specific substance. For example, given the well-documented link between childhood trauma and SUD, states can invest in prevention efforts that protect children and support resiliency, like reimbursement policies and programs that allow parents with SUD to stay with their children in residential treatment or utilizing models of family-centered treatment. Being mindful of the 2015 study that linked deaths of despair (including those from drug overdose) to economic struggle, states can continue investing in strategies that addressing social determinants of health, including recovery housing, job training, and recovery workplaces.
One of the major challenges of developing state SUD policies is that SUD is not itself substance-specific. This language change aligns federal resources to help states address that discrepancy. Specific state guidance from SAMHSA on this change has not been released, but state policymakers will be able to build on their foundational initiatives developed with the support of earlier federal grants and establish new pathways to innovation.
Learn How States Can Blend, Braid, and Use Block Grant Funds to Promote Public Health
As federal officials hint at overwhelming changes in how state health programs will be funded in the future, policymakers are strategizing how to reconfigure their programs to take advantage of the promised brave new world of flexibility and realigned funding. The National Academy for State Health Policy (NASHP), the de Beaumont Foundation, and the Association of State and Territorial Health Officials recently convened a small group of state health policymakers from 11 states to strategically address opportunities and challenges that may result from changes to the federal funding landscape.
The meeting produced a new paper, Blending, Braiding, and Block-Granting Funds for Public Health and Prevention: Implications for States, that charts a way forward for states interested in coordinating work and resources across programs.
“This paper is an important and much needed resource for state officials seeking to improve health and health equity by investing in building stronger, healthier, and more resilient communities during this time of change,” said Ana Novais, executive director of health at the Rhode Island Department of Health. To learn more about Rhode Island’s innovative financing to advance health and health equity, read this blog.
The 2017 annual NASHP state health policy conference also addressed braiding and blending funds for improved population health. The session, presented in partnership with the de Beaumont Foundation, featured officials from Rhode Island, Louisiana, Vermont, and South Carolina. Each state uses innovative braiding or blending models to address population health and non-clinical health needs through programs such as supportive housing and nurse home visiting for low-income first-time mothers. Read more.
Presented in partnership with the de Beaumont Foundation
Congressional Agreement on CHIP Needed Soon!
How long would you drive your car with its gasoline gauge on empty when it’s full of people you care about as you speed along a highway? That was the analogy used by Children’s Health Insurance Program (CHIP) and Medicaid officials during National Academy for State Health Policy’s (NASHP) annual conference held late last month.
Congress has repeatedly promised state officials that there is broad support for CHIP, and that new funds will be available soon and they should just hold on until then. However, it has been over a month since federal CHIP funding expired and it is still unclear if and when Congress will successfully pass a bill to provide more federal funding.
On Nov. 3, 2017, the House of Representatives passed H.R. 3922, a bill combining funding extensions for both CHIP and community health centers. The bill passed the House by a vote of 242-174, with most Democrats voting against it because of their opposition how to the bill is paid for. The pay-fors or off-sets in the House bill include taking money away from the Affordable Care Act’s (ACA) public health and prevention fund and increasing premiums for higher-income Medicare enrollees. Given the current partisan divide over the funding off-sets, the bill’s future remains uncertain.
In the absence of certainty over its future and funding, state officials must weigh multiple factors in making difficult decisions in the weeks ahead. As stewards of health coverage for low- to moderate-income children and pregnant women who depend on CHIP, state officials are first and foremost considering what is currently best for families and are trying to maintain this coverage for as long as possible.
Officials are actively scrutinizing their state’s CHIP finances to determine how long their current funding will last and are trying to figure out if there is any way within their already stressed budgets to extend CHIP once federal carryover and redistribution funds have been exhausted. For example, Arizona is one of the first states expected to exhaust their available federal funds and officials there are considering using money from the state’s “rainy day fund” to continue CHIP coverage. This is not an option for most, as a growing number of states are struggling to address budget shortfalls or address unexpected costs resulting from multiple natural disasters that occurred this year.
Reality is setting in as an increasing number states (MN, AZ, WA, CA, OR, UT, and DC) exhaust their available 2017 carryover allotment and receive their limited redistribution funds from the Centers for Medicare & Medicaid Services (CMS). Without federal funds, most states will need to shut down their CHIP programs and in doing so must consider state notification requirements, costs that the state will incur to close this program, and more. So, why haven’t states sent notices to families warning that the program will shut down? During NASHP’s conference, officials voiced concerns that termination notices could create unnecessary panic for families that could result in far-reaching ramifications that may take months or years to nullify.
Officials know from some states’ experience from freezing enrollment and establishing wait lists for CHIP approximately15 years ago when the block grant’s funding was not adequate that those changes can instill distrust of the program for families. Officials fear parents may disenroll their children sooner than necessary or not renew their coverage. There is also a concern that knowing a child’s coverage is limited will influence medical care decisions, particularly for longer-term treatments. And if Congress does extend federal funding for CHIP after termination notices are sent, states will need to send another notice letting families know they can re-enroll. Officials fear that not all families will re-enroll their children in CHIP if they perceive it to offer unstable coverage. And finally, there is a cost to states to develop, generate, and send notices.
Unfortunately, there are states that expect to exhaust their CHIP funds in December and January that will have no other option than to disenroll children and pregnant women from coverage. As a result, state officials’ questions about their own next steps have increased and intensified. Such questions include:
- What is more important? 1) Giving families more notice and time to plan and research other possible coverage options, which risks potential unnecessary panic or, 2) Minimize panic and only alert families when absolutely necessary?
- What kind of assistance needs to be available to families who are losing CHIP coverage so they can weigh and navigate the potential other coverage options that may be available to them? And, how to pay for that assistance considering states did not assume this would be necessary in designing their budgets and given that the Trump Administration has cut outreach funds for the Marketplaces?
- hould states handle the timing of possibly closing down CHIP programs for pregnant women given their time sensitive, ongoing needs for medical attention?
- What needs to be done to ensure children are transferred successfully from CHIP to the Marketplace so families can enroll them in Qualified Health Plans (QHPs) if they are eligible to receive subsidies? Is it possible to have a data feedback loop from the federally-facilitated marketplace to know if CHIP children are in fact enrolling in QHPs or need further assistance?
State officials are frustrated that they find themselves preparing to shut down a program that has had such success. During a NASHP conference session, state officials offered a snapshot of their unique children’s coverage programs and highlighted the impact of CHIP in their states. Comparing data points from 1997 (the year CHIP was enacted) to today, states shared statistics showing the decline in uninsured children’s rates as well as increases in their access to care, particularly for primary care. States have also made strides to integrate CHIP with other programs so families can experience a continuum of coverage that could soon be significantly disrupted.
Just because states have yet to alert families that CHIP is in jeopardy doesn’t mean officials are not feeling the pressure of their gas tanks approaching empty. States are anxious for Congress to come together as its members have done throughout the history of CHIP to find a bipartisan agreement that provides funding certainty to ensure families and pregnant women do not experience unnecessary panic or loss of coverage.
Braiding and Blending Funding Streams to Meet the Health-Related Social Needs of Low-Income Persons: Considerations for State Health Policymakers
Medicaid beneficiaries often need support outside the scope of clinical health care in order to lead healthy lives, and states are uniquely poised to provide this support by addressing the social determinants of health. While states steward a variety of funding sources that address the needs of low-income populations, too often a Medicaid beneficiary must navigate a labyrinth of referrals in order to access available resources. This brief aims to bring attention to non-Medicaid funding sources that states could potentially blend or braid to address health-related social needs, and to outline a continuum of options for states seeking to coordinate funding to better serve the needs of low-income populations.
Read full brief
Braided Funding Infographic
Funding Sources Chart
For individuals living with complex, often chronic conditions, and their families, palliative care can provide relief from symptoms, improve satisfaction and outcomes, and help address critical mental and spiritual needs during difficult times. Now more than ever, there is growing recognition of the importance of palliative care services for individuals with serious illness, such as advance care planning, pain and symptom management, care coordination, and team-based, multi-disciplinary support. These services can help patients and families cope with the symptoms and stressors of disease, better anticipate and avoid crises, and reduce unnecessary and/or unwanted care. While this model is grounded in evidence that demonstrates improved quality of life, better outcomes, and reduced cost for patients, only a fraction of individuals who could benefit from palliative care receive it. 
