Letter to Alex Azar, US Secretary of Health and Human Services - Butterfield and Olson Lead Letter Calling for Additional Funding for Medicaid Providers


Date: May 14, 2020
Location: Washington, DC

Dear Secretary Azar,

We write to urge you to allocate a significant portion of the remaining Provider Relief Fund dollars to hospitals and providers who serve a disproportionate number of Medicaid and low-income patients. We are grateful for your swift action to deliver much-needed resources appropriated by Congress to hospitals and providers preparing for and responding to the COVID-19 pandemic. However, we are concerned the allocations to date do not provide sufficient relief for health care providers in our districts treating the most vulnerable populations at risk for becoming infected with the virus.

Congress initially appropriated $100 billion in the Coronavirus Aid, Relief, and Economic Security Act (P.L. 116-136) to support health care providers as they concurrently increase spending to prepare for a surge in COVID-19 patients and drastically reduce revenue by cancelling elective procedures and appointments. This perfect storm of increased expenses and lost revenue creates an immediate and vast need that is most acutely felt by those providers with limited financial reserves and who serve high-need, high-cost patients. Recognizing the dire situation of health care providers responding to the pandemic, Congress appropriated an additional $75 billion; Paycheck Protection Program and Health Care Enhancement Act (P.L. 116-139).

To date, the Department of Health and Human Services (HHS) has disbursed around $72 billion from the Provider Relief Fund. However, the distribution methodology, particularly for the largest $50 billion disbursement of emergency funds, disadvantages providers who see a lower volume of traditional Medicare patients and have fewer commercial payers. The net patient revenue metric does not fully capture the unique challenges faced by providers on the front lines of the health care safety net. Consequently, it does not provide adequate support to the providers who serve vulnerable communities disproportionately at risk of exposure and infection.

The COVID-19 crisis is threatening the stability of the health care safety net. For example, we have heard from a number of mission-driven hospitals who are losing tens of millions of dollars yet have received limited federal support. Many of these hospitals have thin operating margins and are struggling to make payroll while simultaneously outfitting their facilities and personnel and competing for scarce resources to respond to the COVID-19 outbreak.

We understand the challenge of expeditiously allocating funds to providers ensuring these funds are both fairly distributed and reach the providers with the most imminent need. Regretfully, the methodology so far has fallen short of this critical goal.

We respectfully urge you to quickly target a significant portion of the remainder of the Provider Relief Fund to providers who serve high Medicaid and low-income patient populations. This funding is imperative to bolster hospitals and other safety-net providers with modest resources, enabling them to fulfill their mission during the current public health emergency.

Thank you for your attention to this critical matter.