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Furor Erupts: Billions Going To Hospitals Based On Medicare Billings, Not COVID-19

Probably few hospital programs want the emergency federal grants introduced this week to deal with the coronavirus disaster as badly as Florida’s Jackson Health does.

Miami, its base of operations, is the worst COVID-19 scorching spot in one of the vital severely hit states. Even in regular years, the system typically barely makes cash. At least two of its workers members have died of the virus.

But in a scathing letter to policymakers, system CEO Carlos Migoya stated the way in which Washington has dealt with the bailout “could jeopardize the very existence” of Jackson, one of many nation’s largest public well being programs, and related hospital teams.

“We are here for you right now,” Migoya, who has examined optimistic for COVID-19 himself, stated in a Thursday letter to Alex Azar, secretary of Health and Human Services. “Please, be here for us right now.”

Migoya and executives at different beleaguered programs are blasting the federal government’s determination to take a one-size-fits-all method to distributing the primary $30 billion in emergency grants. HHS confirmed Friday it could give hospitals and docs cash in line with their historic share of income from the Medicare program for seniors — not in line with their coronavirus burden.

That methodology is “woefully insufficient to address the financial challenges facing hospitals at this time, especially those located in ‘hot spot’ areas such as the New York City region,” Kenneth Raske, CEO of the Greater New York Hospital Association, stated in a memo to association members.

States corresponding to Minnesota, Nebraska and Montana, which the pandemic has touched comparatively flippantly, are getting greater than $300,000 per reported COVID-19 case within the $30 billion, in line with a Kaiser Health News evaluation.

On the opposite hand, New York, the worst-hit state, would obtain solely $12,000 per case. Florida is getting $132,000 per case. KHN relied on an evaluation by workers on the House Ways and Means Committee together with COVID-19 instances tabulated by The New York Times.

The CARES Act, the emergency regulation handed final month to deal with the pandemic, offers HHS broad latitude to manage $100 billion in grants to hospitals and docs.

But the choice to allocate the primary $30 billion in line with previous Medicare enterprise shocked many observers.

The regulation says the $100 billion is meant “to prevent, prepare for and respond to coronavirus,” together with paying for protecting tools, testing provides, further workers and momentary shelters and different measures forward of an anticipated surge of instances. It says hospitals should apply for the cash.

“It seems weird that they wouldn’t just target areas geographically based on where the surge has been,” stated Chas Roades, CEO of Gist Healthcare, a consulting agency.

Issuing the funds based mostly on Medicare income “allowed us to make initial payments to providers as quickly as possible,” an HHS spokesperson stated Friday. Some of the cash was anticipated to exit as quickly as Friday in digital deposits.

HHS “has failed to consider congressional intent” in distributing the $30 billion by not accounting for “the number of COVID-19 cases hospitals are treating,” New Jersey Sens. Bob Menendez and Cory Booker and Rep. Bill Pascrell stated in a Friday letter to Azar.

All three are Democrats. Behind New York, New Jersey has the second-highest variety of recorded coronavirus instances, as of Friday afternoon.

The administration is struggling to stability the necessity to assist programs slammed by the coronavirus with the necessity to present instant reduction, stated Bill Horton, a well being care lawyer with Jones Walker in Birmingham, Alabama.

“Providers have to appreciate that there is a focus on trying to respond to their cries of pain and coming up with ways to get some money out there,” he stated. On the opposite hand, he stated, HHS units itself up for criticism by paying “a chunk of money without particular regard for who has been hardest hit.”

Medicare income can fluctuate sharply by hospital, relying on who their sufferers are and what a part of the nation they’re in.

HHS’ methodology “could tilt the playing field” in opposition to hospitals whose sufferers are largely uninsured or lined by the Medicaid program for low-income sufferers, stated Bruce Siegel, CEO of America’s Essential Hospitals, a bunch of programs serving the poor and weak.

HHS stated the following slice of the $100 billion to exit “will focus on providers in areas particularly impacted by the COVID-19 outbreak” in addition to rural hospitals and people with decrease shares of Medicare income.

Jackson Health’s finances relies upon closely on reimbursement for the sort of elective procedures that it has canceled to make sure it has the capability to deal with COVID-19 sufferers, Migoya stated. Lost income is $25 million monthly, it estimates.

“We cut off our own funding sources in order to sustain our mission,” he wrote within the letter to Azar.

Hospitals in comparatively COVID-19-free areas, however, might proceed elective procedures however nonetheless obtain a giant chunk of the $30 billion, stated Gerard Anderson, a well being economist at Johns Hopkins University.

“If I’m in rural Kansas and I don’t have any COVID patients in my area, I’m not going to ― I should not — stop doing elective surgeries,” he stated.

Even the kind of Medicare funds hospitals usually obtain will give some programs a a lot greater share of the $30 billion than others of the identical dimension.

HHS is basing the funds on conventional “fee for service” Medicare income. But hospitals with a giant chunk of managed care Medicare enterprise, known as Medicare Advantage, received’t be credited for that.

In Florida, greater than 4 Medicare members out of each 10 are in Medicare Advantage plans, one of many highest parts within the nation, according to the Kaiser Family Foundation. (KHN is an editorially impartial program of the inspiration.)

In New York, 39% of beneficiaries are in Medicare Advantage. In Montana, in contrast, the determine is 17%. In Wyoming, it’s three%.

Jackson’s South Florida location and affected person combine “both skew heavily away from the fee-for-service model,” Migoya wrote. “No one wants to talk about money in the middle of a health crisis, but hope alone will not cash checks to employees or suppliers.”

KHN correspondent Rachana Pradhan contributed to this report.

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