HHS distributed $50 billion in grant funds to providers using a formula it chose that heavily favored hospitals that treat the highest share of privately insured patients, per an analysis from the Kaiser Family Foundation.
The 10% of hospitals with the highest private insurance revenue were paid $44,321 per bed, compared with $20,710 for the 10% of hospitals with the lowest private insurance revenue, the analysis concludes.
HHS decided to distribute the first $50 billion out of the $175 billion Congress set aside to help providers based on net patient revenue in 2018. Stakeholders and lawmakers have complained that the metric disadvantages providers treating more vulnerable patients that are enrolled in Medicaid or are uninsured.
Having a payer mix more heavily reliant on private insurance helped hospitals, the analysts said, as did an ability to charge insurers more in concentrated markets.
"All things being equal, hospitals with more market power can command higher reimbursement rates from private insurers and therefore received a larger share of the grant funds under the formula HHS used," the analysts wrote.
The analysis focused on grants to hospitals, but the analysts expected similar trends are present for other providers.
HHS has said that Medicaid-only providers will receive an additional round of funds, as well as skilled nursing facilities and dentists. The department has not yet indicated how it plans to hand out an additional $75 billion in the provider relief fund.
The analysis was supported in part by Arnold Ventures, a not-for-profit foundation.
