The NCSL Blog

24

By Noah Cruz

The COVID-19 pandemic has seen health care facilities around the country pushed to their limits. To ensure health systems have the capacity needed to treat an influx of COVID-19 patients, both the federal government and state legislatures are working to provide financial aid.

Credit: Commonwealth FundOn March 27, Congress enacted the Coronavirus Aid, Relief and Economic Security (CARES) Act, which distributed over $100 billion to providers across the country.

In addition to allocating $50 billion in relief to Medicaid service providers, the act allocated another $50 billion for distribution to providers in areas particularly impacted by the COVID-19 outbreak—$12 billion to 395 hospitals in high-impact areas, $10 billion for almost 4,000 rural providers, $4.9 billion for over 13,000 skilled nursing facilities and $500 million for around 300 Indian Health Service facilities.

However, many providers and stakeholders contend the federal funding methodology and delayed disbursement have negatively affected certain providers with large shares of low-income, Medicaid or uninsured patients.

As of early June 2020, many of these safety net providers, who already operate on thin profit margins and depend on Medicaid for a large source of their payments, had not yet received an allocation. The COVID-19 pandemic has strained their already scarce resources, threatening access to essential care for many vulnerable Americans in the short and long-term.

States are stepping up to supplement federal funds for health care facilities through their own appropriations.

  • Legislation enacted in Minnesota established a health care response fund and provider grant loan program that can be used by health facilities to construct and operate testing sites, pay staff overtime, hire and train new staff, and purchase personal protective equipment.
  • Kentucky enacted legislation creating a loan program to support rural hospitals.
  • A bill in Georgia increased funding for the state’s existing Rural Hospital Stabilization Grants program. 

Despite actions to support facilities treating COVID-19 patients, many health care providers remain under financial pressure.

Health care providers have deferred elective and preventive visits to decrease the risk of transmitting the virus, while patients also avoided visits to reduce their own risk and adhere to stay-at-home orders.

As a result, health care providers are losing billable income and, according to a recent survey of primary care providers, less than half said they think they have enough patient volume (46%) or enough cash on hand (47%) to stay open for the next month. Additionally, three-fourths of all dental practices in the U.S. are only seeing emergency patients and dental care spending is not predicted to return to pre-coronavirus levels until late 2021.

In response, federal agencies have expanded benefits and issued guidance to help alleviate some of the financial pressure resulting from fewer in-person visits. On March 6, the Trump administration expanded telehealth benefits for Medicare beneficiaries and, as of May 10, there had been a 12% increase in the telehealth visits. The Centers for Disease Control and Prevention also created a framework for health care systems providing non-COVID-19 services, as well as guidance for dental care providers specifically.

States are also expanding telehealth coverage for more types of providers and extending the duration in which the services will be covered. For example, Vermont requires state insurance plans cover dental health services, such as diagnosis, consultation and treatment through live interactive audio and video, delivered via telehealth to the same extent the plans would cover in-person services.

The complexities of the COVID-19 pandemic response have challenged both the surge capacity and financial solvency of health care facilities and providers. Data from the states on what effects additional funding and flexibilities have done for facilities amid the re-opening of states’ economies could help inform the future response from federal and state policymakers in support of health care facilities across the U.S.

For more information about state action, please visit NCSL’s new COVID-19 State Legislation Database, which provides up-to-date, real-time information on COVID-19 legislation introduced in the 50 states, the District of Columbia and U.S. territories. To date, the database includes more than 1,850 bills relating to COVID-19 across all policy domains including budgets and financing, health, elections, continuity of government, human services, employment and labor, and more.

Noah Cruz is a research analyst in NCSL’s health program.

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Posted in: Health, COVID-19
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About the NCSL Blog

This blog offers updates on the National Conference of State Legislatures' research and training, the latest on federalism and the state legislative institution, and posts about state legislators and legislative staff. The blog is edited by NCSL staff and written primarily by NCSL's experts on public policy and the state legislative institution.