Accounting and Financial Reporting

Disaster fund may pay hospitals for uninsured coronavirus patients

April 1, 2020 7:43 pm
  • A federal fund that pays 110% of Medicare rates may be used to subsidize uninsured coronavirus patients.
  • Hospital advocates are seeking $1 billion in federal support for coronavirus preparation.
  • Hospitals are trying to shift to domestic producers of personal protective equipment.

A rarely used disaster-funding tool may be used to pay hospitals for coronavirus patients, a senior Trump administration official said.

Robert Kadlec, MD, assistant secretary for preparedness and response in the U.S. Department of Health and Human Services, said the administration is considering using payments from the National Disaster Medical System to cover hospitals caring for uninsured patients who have the coronavirus.

“There would be an interesting way to evaluate how you could have it in a pandemic or something of this sort,” Kadlec said about the fund, which was last used for to pay for care for uninsured patients in the aftermath of Hurricane Katrina.

He cited “initial conversations” about such an approach with the Centers for Medicare & Medicaid Services.

The fund pays for services at 110% of Medicare rates.

An HHS spokesperson said the approach is one of many ways the department is investigating to provide support the healthcare system, if needed. The program identified by Kadlec could be used if patients had to be transferred between overwhelmed hospitals to hospitals in less affected areas.

Kadlec’s comments came at a March 3 hearing of the Senate Health, Education, Labor and Pensions Committee, where some senators expressed concerns that a widespread U.S. outbreak of the virus could strain hospital capacity and funding.

“This could be really impactful negatively or positively if we don’t address this in the right way,” said Sen. Jacky Rosen (D-Nev.).

Congress may pass a $7.5 billion coronavirus funding package by the end of this week, senators said, but details under consideration are not yet public. The package would cover preventive steps and supplies that may be needed if there is broad spread of the virus, which in the U.S. has sickened more than 100 and killed nine, as of March 4.

Hospitals seek funds

The American Hospital Association and the American Nurses Association wrote a letter to congressional leaders on Feb. 27 to seek $1 billion as “initial funding” for a range of purposes, which included:

  • Updating and training staff and implementing pandemic preparedness plans
  • Obtaining scarce supplies, including personal protective equipment (PPE)
  • Ramping up infection control and triage training
  • Providing housing, care and monitoring of coronavirus patients who do not require hospitalization
  • Constructing or retrofitting separate areas to screen and treat large numbers of patients who show signs of being ill from the coronavirus
  • Subsidizing hospitals that have to cancel elective surgeries and other procedures and consequently face financial risk
  • Planning, training, and implementing expanded telemedicine and telehealth capabilities
  • Increasing bed volume to provide surge capacity using temporary structures
  • Covering the increased costs associated with higher staffing levels to meet demand

Hospitals face supply concerns

Among U.S. hospitals and health systems, 86% are concerned about their supplies of face masks and other PPE due to coronavirus-related strains on the supply chain, according to a survey of about 300 hospitals by Premier, a hospital partnership.

Hospitals and health systems typically buy 22 million N95 face masks per year, according to Premier’s purchasing data. However, in January and February, demand for N95s increased by as much as 585%.

“The levels of demand suggest a minimum consumption rate of 56 million masks in 2020, nearly a three-fold increase in demand when compared to a typical year,” a Premier release stated. “Domestic and near-shore suppliers of PPE have increased production and are on track to produce an estimated 60 million masks this year. However, reaching that production level will take between 30 and 60 days.”

The federal funding package is expected to include money for the purchase of 300 million N95 masks.

Other survey findings included:

  • 36% are preparing for broad-scale PPE shortages
  • 54% have initiated PPE conservation protocols to stretch the supplies on hand
  • 46% are worried about how long current supplies will last

Hospitals in Florida “are watching their supplies closely,” Justin Senior, CEO of the Safety Net Hospital Alliance of Florida, said in an interview. Among those hospitals, some with Chinese PPE supply sources have switched to domestic sources.

Hospitals are maintaining close contact with their local health agencies, monitoring updates from the Centers for Disease Control and Prevention, training personnel and testing isolation rooms with negative air pressure, Senior said. They also have started posting signs for incoming patients with coronavirus symptoms to self-identify for immediate care.

“You can’t have someone with coronavirus sitting next to someone for 38 minutes in your waiting room hacking and coughing,” Senior said. Through such steps, hospitals aim to “identify quickly and bring that person through in a way that you get them to that airborne isolation room.”



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