Rural hospitals unsure about how to spend CARES Act money, and whether they'll have to return some of it

Rural hospitals have been allocated tens of billions of dollars from the $2 trillion Coronavirus Aid, Relief and Economic Security Act, but the aid has barely kept many rural hospitals afloat, and many are seeking guidance about how they're allowed to use the aid and whether they'll have to return some of it if they don't spend it quickly enough, Liz Carey reports for The Daily Yonder.

One problem is that many rural hospitals didn't see any covid-19 patients, so they're not sure how funds meant to help with covid-19 expenses can be spent and should be reported, and some rural hospital CEOs say the Department of Health and Human Services guidelines are unclear, Carey reports.

Rural hospitals got CARES Act funds n several ways; $10 billion was appropriated to help rural hospitals treat covid-19 patients and cover revenue shortfalls from canceling normal business such as elective surgery. Some rural hospitals also received funds allocated for providers with a higher historical share of revenue from Medicare compared to total net patient revenue from all sources.

Rural hospitals rely more on Medicaid and Medicare, but often get less funding because the formula Congress used to allocate the money ended up disproportionately helping providers that have many privately insured patients, the Kaiser Health Foundation reports. Rural hospitals are generally more vulnerable to Medicaid and Medicare reimbursement policy changes since they rely so much on it.

"For hospitals who received Paycheck Protection Program loans from the Small Business Administration, there are even more questions," Carey reports. "The biggest of these is whether hospitals that use the PPP program to pay for salaries will have to return some reimbursements from the Centers for Medicare and Medicaid Services."

Some new funding is coming, too: "On July 10, Health and Human Services Secretary Alex Azar said the federal government would be providing another $1 billion to some rural hospitals, as part of a larger $4 billion in funding to hospitals serving vulnerable populations," Carey reports. "The funding would go to 500 hospitals, health clinics and health centers in rural areas, as well as to some health-care facilities in urban areas that provide services to patients in rural areas. Payments will range from $100,000 to $4.5 million for rural designated providers and between $100,000 and $2 million for other providers."