Earlier this month, Klobuchar and Smith urged the Administration to preserve rural health care providers’ access to pandemic relief funding

For Immediate Release:
October 28,  2020

Contact:
Jane Meyer (Klobuchar), 202-430-7973
Katie McElrath (Smith), 202-365-5865

WASHINGTON – U.S. Senators Amy Klobuchar (D-MN) and Tina Smith (D-MN) announced that following their letter earlier this month to U.S. Department of Health and Human Services (HHS) Secretary Alex Azar, the Administration has expanded relief eligibility for rural health care providers and updated requirements to preserve providers’ access to funding from the Provider Relief Fund (PRF) created as a response to the coronavirus pandemic.

“As we continue to face challenges from the pandemic, rural areas are in need of critical support,” Klobuchar said. “This announcement is welcome news and we must continue to work with rural hospitals and health systems in Minnesota and around the country to help ensure that they can continue to serve low-income, elderly, and severely ill patients through this difficult time.”

“We need to help health care providers in small towns and rural areas stay afloat so they can continue their critical work during COVID-19,” Smith said. “Some health care providers are having to lay people off while anticipating surges in patients this winter. This puts them in an impossible position. The last thing we should do is change the requirements for the Provider Relief Fund, which may force some health care providers to return funds they have already received."

HHS is allowing more flexibility for providers in using PRF proceeds so that they can continue to respond to all of the challenges posed by the coronavirus pandemic. This will help to protect patients’ access to care and prevent providers — especially rural hospitals and hospitals that serve high-numbers of low-income, elderly, and severely ill patients — from being forced to return PRF funds that they have already received. 

HHS released initial reporting requirements in June for providers receiving PRF funds that directed these entities to define lost revenue as “any revenue that you as a health care provider lost due to coronavirus, ” but HHS released updated reporting requirements on September 19 that directed providers to instead use changes in their net operating income to calculate lost revenue – a substantial change from the initial June guidance that was expected to reduce the amount of lost revenues that providers are able to report. That shift in reporting requirements would have changed the terms of the relief as hospitals and health systems initially understood them and likely created further uncertainty for providers at a time when they are already facing serious financial challenges.

Earlier this month, Klobuchar and Smith led 20 colleagues in a letter to the U.S. Department of Health and Human Services (HHS) Secretary Alex Azar, expressing concerns about that change in reporting requirements for hospitals and health systems that receive relief funds from the Provider Relief Fund (PRF). That change could have forced providers to return relief funding that they had already received. Rural hospitals and hospitals that serve high numbers of low-income, elderly, and severely ill patients — could have been particularly burdened by the additional reporting requirements, due to their already thin financial margins.

Klobuchar and Smith were joined on the letter by Senators Michael Bennet (D-CO), Tammy Duckworth (D-IL), Jeff Merkley (D-OR), Doug Jones (D-AL), Chris Coons (D-DE), Bernie Sanders (I-VT), Jack Reed (D-RI), Mazie K. Hirono (D-HI), Tammy Baldwin (D-WI), Joe Manchin (D-WV), Kyrsten Sinema (D-AZ), Patrick Leahy (D-VT), Dick Durbin (D-IL), Richard Blumenthal (D-CT), Gary Peters (D-MI), Chris Van Hollen (D-MD), Angus King (I-ME), Sheldon Whitehouse (D-RI), Ed Markey (D-MA), and Tom Carper (D-DE).

Full text of the October 9 letter can be found HERE and below.

Dear Secretary Azar: 

We write to express our concerns regarding the recent change in reporting requirements for health care providers that have received emergency relief through the Provider Relief Fund (PRF) and to respectfully request that you reinstate the original reporting requirements for determining lost revenue that the Department of Health and Human Services (HHS) first released in June of this year. 

As you know, the CARES Act established the PRF to reimburse health care providers for health care-related expenses or lost revenue due to the coronavirus pandemic. The PRF has been critical in helping hospitals and health care systems across the country navigate the serious financial challenges posed by this pandemic, preventing many providers from being forced to permanently close their doors. 

As a condition for receiving PRF funds, the CARES Act required these recipients to submit reports and maintain documentation to certify their compliance with program requirements. In June, HHS released initial guidance outlining some of these reporting requirements and directed providers to calculate lost revenue by comparing actual 2020 revenue with budgeted 2020 revenue or with 2019 revenue. On September 19, HHS released updated reporting requirements that directed providers to use net operating income to calculate lost revenue—a substantial change from the directions issued in June. 

We have heard from hospitals and health systems in our states who are concerned that this change in the definition of lost revenue will force them to return funds to HHS that they have received from the PRF. In particular, rural hospitals and those that serve high numbers of low-income, elderly, and severely ill patients—which already operate on thin financial margins—may be especially impacted by this change. 

We are concerned that this change in reporting requirements changes the terms of the relief as providers initially understood them based on the initial June guidelines—further exacerbating the financial challenges and uncertainty that these systems continue to grapple with as a result of the pandemic. Therefore, we respectfully request that you reinstate the original June requirements for determining lost revenue in order to prevent unnecessary financial uncertainty for hospitals and health care providers and to prevent them from being forced to return PRF funds that they have already received. 

Thank you for your time and attention to this important measure. We look forward to working with you to continue supporting our hospitals and ensuring that this pandemic does not cause further, long-term disruptions to Americans’ access to care.

Sincerely,

Issues