HHS Secretary Alex Azar Friday said that the Trump administration will use a $100 billion hospital and provider relief fund to reimburse hospitals at Medicare rates for uncompensated COVID-19 care for the uninsured.
Azar said the funds will be distributed through the Public Health and Social Services Emergency Fund, which supports the National Disaster Medical System.
Azar did not specify how much of the $100 billion of Congress' so-called "Marshall Plan" for hospitals would be set aside for reimbursement. The department is still weighing how to distribute the rest of the money.
Azar said that hospitals receiving relief funds would be banned from balance billing, but did not specify what cost-sharing obligations could be imposed for uninsured COVID-19 patients or whether ancillary providers would be included in the ban.
The Federation of American Hospitals said that uninsured individuals should not have to worry about paying for COVID-19 treatment, but that the funding should not come out of money that Congress set aside in the last stimulus package for hospital surge capacity, protective equipment and lost revenue.
"We need to be reimbursed for care for the uninsured, that's important. But if we don't have up-front resources to keep caregivers on the front line, it's not going to make that much of a difference down the line," said FAH President and CEO Chip Kahn.
The costs of uncompensated care for uninsured COVID-19 patients could be substantial. A forecast by Health Management Associates released Friday showed that up to 40 million people in the U.S. could be uninsured if job losses from the coronavirus pandemic are severe.
The American Hospital Association also opposed using funds from the Coronavirus Aid, Relief, and Economic Security Act to pay for charity care. Because almost all normal services, including elective and scheduled procedures, have been postponed, hospitals are facing severe cash flow issues, AHA President and CEO Rick Pollack said in a statement late Friday.
"This is also creating a historic financial crisis, threatening the ability to keep our doors open for both the insured and uninsured alike," he said.
The administration said it will not open a special enrollment period for the Affordable Care Act exchanges, which could have allowed some uninsured individuals could gain coverage. The administration has framed using the hospital relief funding as an alternative.
Georgetown University health law professor and ACA expert Katie Keith said that hospitals would be better off having at least some of those individuals enrolled in private coverage because the reimbursement would be higher than Medicare rates, and beneficiaries would be better off with comprehensive care. She said re-opening the ACA exchanges and using the provider relief fund for uncompensated care are not mutually exclusive.
"It is astounding that the Trump administration would prefer that people remain uninsured, with the federal government picking up the entire tab for COVID treatment, than enroll in private health insurance," Keith said.
Using provider relief funding for uncompensated care costs could proportionately funnel money away from states with relatively low uninsured rates like New York and toward non-Medicaid expansion states like Florida and Texas.
Senate Majority Leader Chuck Schumer (D-N.Y.), who pushed for the provider relief fund in congressional negotiations, and the Greater New York Hospital Association did not respond to requests for comment on the policy.
Hospitals and providers could get more money in Congress' fourth COVID-19 relief bill, as House Speaker Nancy Pelosi (D-Calif.) and Senate Majority Leader Mitch McConnell (R-Ky.) have said that healthcare will be a top policy priority.
Pelosi said her advice to Azar on Wednesday was to get the money out quickly, and that Congress will make sure HHS has more funds for medical supplies and hospitals if needed.