Payment Reimbursement and Managed Care

Federal government responds to COVID-19 crisis

April 27, 2020 9:33 pm

Congress has responded to the COVID-19 crisis with several pieces of legislation that include relief to hospitals, and it’s up to each to get their fair share of funding available as of April 7, 2020.

Coronavirus Preparedness and Response Supplemental Appropriations Act, 2020 (HR 6074). President Trump signed HR 6074 into law on March 6, 2020, providing $8.3 billion in emergency funding for federal agencies to respond to the coronavirus outbreak. Of this amount, $6.7 billion (81%) is designated for domestic responses such as vaccine research, state and local response, expansion of telehealth and Small Business Administration loans to entities financially impacted by the pandemic.[a]

On March 24, the U.S. Department of Health and Human Services (HHS) announced it will provide $100 million to U.S. healthcare systems, as authorized by HR 6074, to help them prepare for a surge in COVID-19 patients. About $50 million will be distributed to hospitals through hospital associations.

Families First Coronavirus Response Act (HR 6201). This law responds to the growing health and economic crises with provisions for paid sick leave, free testing and expanded unemployment benefits. The law has been projected to cost $183.8 billion.[b]

The Corona Virus Aid, Relief, and Economic Security (CARES) Act (HR 748). President Trump signed the CARES Act’s $2.2 trillion economic stimulus package into law on March 27. Responding to a letter from industry advocacy groups, Congress included $100 billion in the bill for eligible healthcare providers (primarily hospitals) in dealing with COVID-19, along with additional funding for the public health sector.[c]

Among its major provisions, the CARES Act also does the following:

  1. Suspends 2% Medicare sequestration cuts from May 1 through Dec. 31, 2020
  2. Increases applicable DRG weights by 20% for Medicare COVID-19 patients
  3. Delays payroll tax payments for employers, including hospitals, with a 50% reduction in payroll taxes owed until January 2021 (At least 50% of the remaining amount must be paid by Dec. 31, 2021, and the remainder is due by Dec. 31, 2022)
  4. Delays Medicaid Disproportionate Share Hospital cuts until Dec. 1, 2020, with modifications in the reductions
  5. Expands the Medicare accelerated payment program during the COVID-19 emergency period
  6. Waives the Medicare in-patient rehabilitation facility three-hour rule
  7. Waives the requirement that providers have prior relationships with patients before delivering telehealth services
  8. Limits liability under federal and state laws for volunteer health workers during the emergency
  9. Allows for the sharing of certain medical records with initial patient consent

Implementation began immediately, with a quick rollout of rules governing the distribution of funds. As with any expedited implementation under extreme pressures, confusion and bottlenecks have occurred. Funds are in the pipeline and should start flowing the week of April 6, 2020. Because of the complexity and magnitude of the tasks at hand, it will take several weeks or months to complete the distribution. Subsequent stimulus laws are likely, as Congress strives to support society and prepare for recovery. 

Funds will be allocated to federal and state government agencies to distribute to hospitals. The legislative language appropriates these funds “to remain available until fully committed and expended.” This may translate into “first come, first serve.” Hospitals must act quickly to document their increased costs and lost revenue related to the COVID-19 pandemic.


[a] Oum, S., Wexler, A., and Kates, J., “The U.S. response to coronavirus: Summary of the Coronavirus Preparedness and Response Supplemental Appropriations Act, 2020,” Kaiser Family Foundation, March 11, 2020.

[b] Soto, I., and Hayes, T.O., “Estimating the cost of the Families First Coronavirus Response Act,” American Action Forum, March 17, 2020; and Sprunt, B. “Here’s what is in the ‘Families First’ coronavirus aid package Trump approved,” NPR, March 19, 2020.

[c] See AHA, “AHA, AMA, and ANA send letter to Congress on COVID-19 funding,” March 19, 2020; See also, Snell, K., “What’s inside the Senate’s $2 trillion coronavirus aid package,” NPR, March 26, 2020.


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