American Rescue Plan’s $ 8.5 Billion Rural Fund isn’t just for rural providers

Rural health providers welcomed the Department of Health and Human Services announcement earlier this month that they are channeling $ 8.5 billion in stimulus funding for COVID-19.

But large health systems with more than 100 hospitals and billions of dollars in revenues are also eligible for money as autonomous rural hospitals, and they intend to get their share.

The grants are part of the American Rescue Plan, a massive $ 1.9 trillion pandemic relief package approved by Congress earlier this year. HHS has combined its September 10 ARP Rural Grants Newsletter with an additional $ 17 billion in highly anticipated Provider Relief Fund grants, the fourth distribution under the package.

Right to Rural fund ARP depends on whether patients live in rural areas and not on providers. Health care providers must be in or care for patients who live in rural areas and are billed for Medicare, Medicaid, or Child Health Insurance between January 1, 2019 and September 30, 2020. hospices or long-term service providers are also eligible.

According to Brock Slabach, chief operating officer of the National Rural Health Association, a trade group for rural providers.

The NRHA would prefer the money be reserved specifically for rural providers rather than rural patients, although that is better than nothing, Slabah said.

“This does not mean that we are opposed to the city’s hospitals having access to these funds, but it just changes the dynamic in which this 8.5 billion dollars could be,” he said.

CommonSpirit Health, a 140 hospital system that generated more than $ 33 billion in revenue for the year ended June 30, is among the major systems that are planning to apply for the ARP Rural Fund. Dan Morissette, CFO of CommonSpirit, said during a phone call with investors last week that the Chicago system plans to apply for a portion of the rural ARP distribution “ASAP.” CommonSpirit will also apply for the fourth phase of PRF grants.

Morissette said CommonSpirit usually receives about 1% of all mailings. The nonprofit system has also received more than $ 110 million from a PRF allocation dedicated specifically to rural hospitals, a small fraction of the $ 1.5 billion total in total PRF grants recognized under the program.

CommonSpirit said Thursday it has 45 rural hospitals.

“The large system does not deny you the right to this rural allocation,” said Nathan Baugh, director of government affairs at the National Association of Rural Clinics. “This is not meant for small systems that are exclusively based in rural areas. I am sure that these systems would prefer that this funding be for them only, and not for everyone who serves rural patients. ”

HHS said the amount providers receive from ARP will depend on the amount of Medicaid, CHIP and / or Medicare services they provide to rural patients. Rural ARP payments are usually based on Medicare reimbursement rates.

“Funding will be shared with equity in mind so that providers serving our most vulnerable communities receive the support they need,” HHS Secretary Xavier Becerra said in a statement when the ARP Rural Fund was announced.

Rural Americans are more than twice as likely to die from COVID-19 as their urbanites, new data from the Rural Policy Research Institute show. Rural areas have been largely spared the initial outbreak of the pandemic, but this has changed in recent months with the introduction of the delta variant.

Applying to participate in the ARP Village Fund is simply a “yes” checkbox in the PRF Phase Four Application box, Baugh said. Because this is such a low threshold for entry, Baugh said he thinks almost every provider will agree.

“I suspect that many large systems, as they are applying for the fourth phase, will go ahead and check yes and allow the government to find out if they have enough patients to allow the government to pay them some of the funding from this rural bucket,” said he.

The ARP text includes a clause specifying that the rural provider is located in a metropolitan statistical area with a population of less than 500,000, but the Health Resources and Services Administration has taken a different approach to implementing the law, focusing on targeting the rural area to the patient rather than the provider.

“It should come as no surprise that large multi-hospital systems will turn to rural care funds,” said Gregory Etzel, a partner in the medical practice group at law firm Morgan Lewis.

“It appears that Congress has sought to make these funds broad enough to reach the rural communities served by these hospitals, whether or not the hospital itself is located in the countryside,” he said.

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