US Federal Payments to Hospitals For Treating Uninsured COVID-19 Patients
The economic costs of treating COVID-19 patients are overwhelming the hospital system. The American Hospital Association reported to Congress in March that due to the expenses of treating COVID-19 patients, “hospitals are currently losing up to $1 million per day” with losses expected to grow over time. These economic strains exist independent of the substantial costs associated with treating the estimated 28 million uninsured individuals in the US.
Given the size of the uninsured population, many stakeholders advocated for the Trump administration to open a special enrollment window for ACA policies sold on the federal exchanges (covering thirty-eight 38 states). This would permit uninsured individuals to access ACA coverage and subsidies. The Trump administration did not elect this option (although individuals who recently lost employer-sponsored coverage may apply to purchase an ACA policy under existing law). Eleven of the 17 states that operate their own exchanges, and the District of Columbia, have opened special enrollment windows. These states are: New York, Vermont, Massachusetts, Rhode Island, Connecticut, Maryland, California, Washington, Nevada, Colorado and Minnesota.
Rather than creating a special enrollment window, the Trump administration announced on Friday April 3, 2020 that the federal government would compensate hospitals and other providers treating uninsured COVID-19 patients at Medicare rates. Health and Human Services Secretary Azar said:
“Under the President’s direction, we will use a portion of that funding [CARES Act] to cover providers’ costs of delivering COVID-19 care for the uninsured, sending the money to providers through the same mechanism used for testing.”
Not surprisingly, Secretary Azar also said that as a condition of receiving funds under this program, providers would be forbidden to balance bill the patients. He also said that hospitals will be reimbursed at Medicare rates. The administration did not state whether hospitals or other providers would be compensated for treating undocumented individuals for COVID-19 care.
Secretary Azar said that regulations would be forthcoming, but as of yet no additional guidance has been issued. Many questions remain, for example: Will these federal payments cover care provided in all settings (hospitals, clinics, hospice facilities, home healthcare) or simply the more traditional settings? How will Medicare and its payment contractors treat a diagnoses that could relate to COVID-19 or other similar conditions (i.e., is kidney failure a pre-existing co-morbidity or a COVID-19 condition)? Will Medicare cover transportation expenses, mortuary expenses? And finally, can hospitals and other providers afford to treat a substantial number of new patients at Medicare rates, given the economic environment in which they now exist, with the virtual elimination of more well-compensated elective care?
These questions will likely be answered in the next few weeks.
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