8/26/2021 Weekly Newsletter – Funding for Health Care Providers During the Pandemic: An Update
What is Provider Relief Fund?
- Congress, states and the Administration adopted a number of policies to ease financial pressure on hospitals and other health care providers.
- Intended to help alleviate the fiscal impact of revenue loss due to patients delaying non-urgent care, coupled with new costs associated with COVID-19
What is happening with Healthcare Spend?
- Health care spending plummeted early in the pandemic
- Overall health spending was up 3.4% in the fourth quarter of 2020, as compared to 2019.
- Spending on physician office visits was down 3.8% for the year
- Hospital spending was relatively stable (0.1% higher than 2019)
- Laboratory spending increased 9.1%
What is impact on Physicians?
- Impacts vary based on type of service
- Volume of total primary care visits (including telehealth) and elective services remained close to or just below the 2019 levels.
- Skilled nursing facility volume remains below pre-pandemic levels.
What is sequestration?
- Automatic 2% reduction in Medicare payments required under budget rules. Now, more than one and a half years into the pandemic, Congress has provided additional financial protection by continuing to waive the automatic 2% reduction.
- A separate Medicare sequestration of 4% would be triggered under statutory PAYGO at the end of the year, because the recently enacted American Rescue Plan (ARP) is projected to increase the deficit by $1.9 trillion.
What is the impact to Medicare/Medicaid?
- Increase in Medicare COVID-19 inpatient reimbursement – Medicare has increased all inpatient reimbursement for COVID-19 patients by 20% during the public health emergency (PHE), which has recently been renewed through October 17, 2021.
- Reimbursement for COVID-19 vaccination administration – Medicare increased its reimbursement for COVID-19 vaccine administration to $40 per dose.
- Medicaid options to support providers – As of July 1, 2021, 41 states increased provider payment rates for a range of provider types via Disaster-Relief State Plan Amendments (SPAs).
- Additional funds in the ARP – The American Rescue Plan (ARP) includes $8.5 billion for rural health care providers to help cover lost revenue and costs associated with COVID-19.
Information sourced via – Funding for Health Care Providers During the Pandemic: An Update | KFF