06.23.20

Peters Unveils New Report on Financial Impact of Delayed Coronavirus Aid on Michigan & National Hospitals

Hospitals Forced to Furlough Essential Workers as Trump Administration Delayed Nearly 60 Days to Distribute Key Funding; More than $72 Billion Remains Unallocated

WASHINGTON, DC – U.S. Senator Gary Peters (MI), Ranking Member of the Senate Homeland Security and Governmental Affairs Committee, unveiled a new report detailing the Trump Administration’s failure to quickly distribute $175 billion in Coronavirus relief funds to hospitals.  These delays and other missteps have led to significant layoffs and furloughs of health care workers during the pandemic. Today, nearly three months after the CARES Act was signed into law, approximately $72 billion – or 41% – of funding approved by Congress to support hospitals has still not been distributed by the Administration. Peters’ report reveals that these delays have contributed to the health care industry’s financial crisis, which has forced at least 260 hospitals nationwide to temporarily furlough or permanently lay off health care workers. In his report, Peters calls for immediate action to distribute remaining and additional needed funds to struggling hospitals.

“The Trump Administration has delayed sending billions of dollars of relief to hospitals at a time when the nation’s health care providers needed our support more than ever,” said Senator Peters. “Hospitals in Michigan and across the country have been forced to furlough or lay off thousands of essential employees, and many more are at serious risk of shutting down entirely. The Trump Administration must take immediate action to rectify these grave mistakes – our hospitals and the people they care for cannot afford to wait any longer.”

Increased costs associated with treating high numbers of COVID-19 patients as well as the suspension of many revenue-generating elective procedures has pushed hospitals in Michigan and across the country towards insolvency. The American Hospital Association estimates that hospitals and other health care providers are losing more than $50 billion per month for the past four months during the pandemic. The Michigan Health and Hospital Association estimated hospitals in the state are losing more than $300 million a week, and in some cases hospital revenues dropped between 50% and 70% in March and April. Even before the pandemic, many hospitals in rural and low-income communities were considered financially vulnerable. In Michigan alone, 18 rural hospitals were at high risk of closing, or about one-fourth of rural hospitals in the state.

This spring, Congress provided a combined $175 billion in emergency funding for hospitals and other health care providers responding to the COVID-19 pandemic. The Trump Administration has been slow to distribute all of the appropriated funds almost three months after they were approved, and Peters’ report found that the White House’s initial strategy to distribute funds failed to account for whether or not medical facilities were hot spots for the virus, resulting in massive inequities in funding per patient.

Peters’ report urges the White House to expedite distribution of the remaining funds. To date, delays have already cost many medical workers their jobs and placed serious strains on hospitals. Peters’ report also recommends that the Department of Health and Human Services use its discretion to deliver a significant and steady stream of funding to hospitals with the highest number of infected patients to address the areas with the greatest need for additional aid. Finally, the report recommends allocating additional disbursements to rural and low-income hospitals and approving the additional $100 billion for health care providers in the House-passed HEROES Act.

READ THE FULL REPORT“The Damage from Delays: Trump Administration Slow to Distribute COVID-19 Relief as Hospitals Forced to Furlough Workers”

The report’s key findings include:

  • Of the $175 billion provided by Congress in relief funding, the Trump Administration has failed to provide approximately $72 billion to hospitals and other health care providers.

  • The initial emergency financial relief provided by the Administration did not factor in whether a medical facility was a hot spot for COVID-19, resulting in massive inequities in funding per COVID-19 patient.

  • More than 260 hospitals have temporarily furloughed or permanently laid off health care workers due to the COVID-19 crisis since March 20, 2020.

The report’s key recommendations include:

  • Expedite distribution of remaining $72 billion of funds within four weeks.  The Trump Administration’s failure to deliver emergency funding relief on a timely basis has already cost medical worker jobs, and they must avoid any additional delay.
  • Allocate additional disbursements to COVID-19 hot spot areas.  The Trump Administration’s failure to account for COVID-19 case levels has caused furloughs in high impact areas.  The Department of Health and Human Services (HHS) should use its discretion to deliver a significant, and steady stream of funding to hospitals with the high numbers of COVID-19 patients.
  • Allocate additional disbursements to rural and safety net hospitals.  The Trump Administration’s failure to account for the existing financial situation of health care providers has put hospitals serving lower-income, vulnerable communities at high risk of closure.  HHS should use its discretion to ensure such hospitals have enough cash on hand to remain operational throughout the crisis.
  • Pass the additional $100 billion in the HEROES Act for the Provider Relief Fund.  The HEROES Act passed by the House of Representatives includes an additional $100 billion for health care providers.  Congress should provide this additional needed support, and the Administration should implement the above recommended reforms to distribute this funding equitably and efficiently to help keep vulnerable hospitals financially solvent through the pandemic.

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