Letter to the Hon. Alex Azar, Secretary of Health and Human Services and to the Hon. Seema Verma, Administrator of the Centers for Medicare and Medicaid Services - Cortez Masto Urges Top Health Officials to Swiftly Distribute Emergency Covid-19 Funds to Hospitals Serving Low-Income, Vulnerable Populations

Letter

Dear Secretary Azar and Administrator Verma,

We write to you today to ask that you consider the economic impact on hospitals that serve a
disproportionate number of Medicaid and low-income patients as you distribute future
congressionally appropriated COVID-19 related funding. We sincerely appreciate the funding
that has reached our states to date, and we also appreciate the responsiveness of your staff when
addressing issues related to the distribution of initial tranches of funding. However, we remain
concerned that, to date, the allocations have not sufficiently targeted providers tasked with caring
for vulnerable populations. As such, as you distribute the remaining funding in the Public Health
and Social Services Emergency Fund, we respectfully request you consider a separate, targeted
distribution of funding for health providers who make up the health care safety net in our states.

In the wake of the COVID-19 crisis, Congress acted swiftly to provide emergency funding for
hospitals and health providers. Specifically, Congress provided $100 billion for the Public
Health and Social Services Emergency Fund (PHSSEF) under the Coronavirus Aid, Relief, and
Economic Security (CARES) Act (P.L. 116-136), as well as an additional $75 billion under the
Paycheck Protection Program and Health Care Enhancement Act (P.L. 116-139). In our states
and across the country, Medicaid providers are on the frontlines of this pandemic as they often
are under more normal circumstances. As such, Congress explicitly articulated in the CARES
Act that PHSSEF eligible health care providers include "Medicare or Medicaid enrolled
suppliers and providers."

To date, the distribution methodology used by the Department of Health and Human Services
(HHS) has not sufficiently addressed the needs of hospitals and health providers that
disproportionately serve Medicaid and low-income patients. We appreciate the urgency with
which HHS acted to make initial funding distributions and the continued efforts to address the
needs of health care providers impacted by COVID-19. However, the decision to distribute funding based on net patient service revenue in the $50 billion general distribution, combined
with the $2 billion in targeted funding for disproportionate share hospitals, did not adequately
capture the financial strain safety net providers face in the current environment.

The safety net hospitals in our states and across the country have minimal privately insured
patient populations, and they overwhelmingly rely on government payers. On a pre-pandemic
basis, these providers face high-uncompensated care costs and bring in significantly lower
revenue than other hospitals. COVID-19 has severely exacerbated these disparities. We are
concerned about the future financially viability of our hospitals that help care for the sickest,
lowest-income, and costliest patients. These hospitals stand at the frontlines of our health care
system for many of our disadvantaged communities and operate on razor thin margins under the
best of circumstances.

Moreover, Medicaid recipients and low-income populations face particular health challenges,
due to underlying health conditions and barriers to accessing care. This makes them all the more
susceptible to dangerous outcomes during a pandemic. A report recently released found that 35
percent of non-elderly adults with household incomes below $15,000 are at increased risk of
serious illness if infected with coronavirus, compared to just 16 percent of adults with household
incomes greater than $50,000.

If we are to implement a successful comprehensive national
response to COVID-19, we cannot leave anyone behind. Our safety net hospitals currently lack
the funding they need to effectively treat the nation's most vulnerable families and individuals.
We fully appreciate the challenges involved in quickly and equitably distributing funding to
health providers, however we urge you to consider a separate, targeted distribution of funding
that prioritizes the particular financial strain facing our hospitals that serve a disproportionate
number of Medicaid and low-income patients.

We thank you for your consideration of our request, and we look forward to your response.