In a rush to get money to providers in desperate financial situations due to the COVID-19 pandemic, HHS sent some of providers' $50 billion in general grant funds to facilities that have closed.
HHS' first $30 billion grant distribution was sent automatically based on 2019 Medicare fee-for-service reimbursement. It is unclear exactly how much grant money from the Coronavirus Aid, Relief, and Economic Security Act's provider relief fund was erroneously sent out, and how much has been recovered. HHS said the department prioritized getting funds out quickly and is working to claw back improperly sent funds and fix future distributions.
"Many of the providers that are not operating have already returned the funds and if an institution is closed and their bank account is also closed, the funds are automatically returned," a HHS spokesperson said.
Some providers have volunteered to send funds back for closed facilities, but at least one recipient has had difficulties figuring out how to return the money.
Alecto Healthcare Services on April 10 received roughly $2 million from the first tranche of grant money for three hospitals that have closed: Fairmont Regional Hospital in Fairmont, W.V.; Ohio Valley Medical Center in Wheeling, W.V.; and East Ohio Regional Hospital in Martins Ferry, Ohio. Fairmont closed on March 19 and Ohio Valley and East Ohio closed in fall 2019. Alecto did not request the funds, which were deposited automatically.
Alecto general counsel Michael Sarrao said he has tried to get instructions from HHS on how to return the funds, but has not gotten clarification on the process yet. Sarrao said he called a provider hotline Thursday and spent more than an hour on the phone with several customer service representatives who attempted to assist him, but were unable to provide further instructions.
Fairmont then received an addtional $262,000 from a second, $20 billion tranche of grant funds sent out on Friday. Sarrao wrote to the relevant HHS regional general counsel on Friday asking for guidance on the facilities' potential to retain some of the funds and instructions for how to return the money. Alecto maintained the Fairmont facility, some equipment and supplies because the hospital was being evaluated by the Federal Emergency Management Agency and Army Corps of Engineers as a potential COVID-19 surge facility, though authorities eventually determined it wouldn't be needed.
An HHS spokesperson said that any provider that wishes to return their payment should reject the funds within 30 days of receipt using the department's attestation portal.
Rural Hospital Group, which in mid-March closed Sumner Community Hospital in Wellington, Kan., said the group received $72,000 from HHS in the first round of grant distributions on April 10. Rural Hospital Group will send the funds back to the federal government, said CEO Trent Skaggs.
Several entities that recently closed facilities including Rennova Health, UPMC Pinnacle and Astria Health did not respond to inquiries about how much money they may have received erroneously, and whether they sent funds back.
A HHS spokesperson said officials are reviewing providers' information to ensure accurate payments, and will "initiate an action to force repayment without having to go through the audit process" if providers are found to have closed. For future distributions, the spokesperson said HHS is establishing a process to exclude known closed organizations from its files.
HHS appears to have some information up to date, however. Mayo Clinic said as of April 23 it had not received any funds attributable to its Springfield, Minn. hospital, which the not-for-profit system closed at the end of February.
"This was expected as while the facility was only closed at the end of February, we had been working with CMS since later 2019 through an orderly transition. As such, they were aware of our discontinuing operations at the facility," a Mayo Clinic spokesperson said.
Allina Health took over the Springfield facility, and is operating it as a clinic instead of a hospital.
HHS has not yet published information about providers who have accepted or declined grants. However, when the department began sending out its second tranche of $20 billion in provider grants on Friday, it added allowing public disclosure of grant amounts as a condition of accepting funds.
President Donald Trump on Friday signed Congress' latest COVID-19 relief package, which includes $75 billion to recharge the original $100 billion provider relief fund. Congress again left distribution methods up to HHS.