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.
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