New US hospitals face financial crisis over COVID relief money

About 420,000 health care providers across the country are already receiving $178 billion in bailouts from the bank, so the government isn’t covering 100% of the losses for anyone, said Chris Lundquist, a spokesman for the U.S. Health Resources and Services Administration, which oversees the program.

“HRSA has been committed to providing maximum support to as many hospitals as possible within the limits of law and funding,” he said. The agency said it used trusted financial information for hospitals that opened in 2019 or 2020 to create a fair payment system.

“They all got funding,” Lundqvist said.

While virtually all aid money is being discussed, Lundqvist said hospitals that need more help can go through an appeals process. Hospitals may also request additional appropriations or funding in coming fiscal years, he said. All three hospitals say they deserve more.

Officials in Thomasville are trying to use the influence of Congress. Mayor Sheldon Day made several trips to Washington, D.C. to speak with members of the state’s congressional delegation and health officials, and Alabama Hospital Association President Dr. Don Williamson contacted the White House for help.

“They were assured that they would be taken care of. But the thing is, when you’re dealing with government agencies, you don’t have money until you have it,” Williamson said.

Located in southwest Alabama, Thomasville is in a poor area called the Black Belt. About 70% of Black Belt residents are eligible for Medicare or Medicaid, and health care has been limited for generations.

The last hospital in Thomasville closed over a decade ago, leaving only hospitals that offer fewer services in the surrounding region. Officials have been working for years to secure the new hospital so residents don’t have to travel 90 minutes for high-tech services like digital imaging, full surgical options, echocardiograms, 3D mammograms and more.

Through a partnership between the city and municipal health authority, Thomasville Regional received federal funding from the Department of Agriculture and opened on March 3, 2020, before cases of COVID-19 broke out in the rural South.

“We thought we were off to a good start,” said James, chief executive. “And then everything closed.”

Patients stopped showing up for scans, elective surgeries, mammograms and other lucrative services due to the shutdown of the pandemic, and financial reports that looked promising turned dangerous in a few weeks.

Recognizing that new hospitals cannot calculate COVID-19 losses because they cannot compare 2020 numbers with previous years, the Department of Health and Human Services has allowed hospitals to use budget figures rather than previous financial statements for calculations. According to James, this is how the hospital determined it was missing more than $7 million in care.

While the hospital is still awaiting this assistance, he said, the government has agreed to provide $1 million in aid, which has gone to all other hospitals.

“It was normal, but other hospitals in our region received $8 million, $9 million,” he said.

The Birmingham-based Medical Properties Trust recently awarded the hospital $2 million, and James said executives are confident the Thomasville region will eventually receive more federal assistance. “But that will take time,” he said.

Like Thomasville Regional, Kansas’s Rock Regional saw revenue decline shortly after opening, Beus, CEO, said. He says he is still understaffed by the pandemic and forced to pay a premium for traveling nurses working shifts in departments while working with consultants and members of Congress just trying to stay afloat.

“It was a little annoying,” he said.

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