Since the start of the COVID-19 pandemic, the financial losses of businesses and employees in the service, retail, and entertainment industries have been the subject of a large amount of media attention. What many Americans would not expect is that health systems are also under major financial strain during this difficult time. Pediatricians can act now by writing their U.S. Representative or Senator to express the need for additional emergency funding for children’s health systems.
Children’s hospitals have experienced a 40-50% decrease in revenue and a 10% increase in operating costs since the start of the pandemic[1, 2]. These changes are the result of the postponement of all deferrable care and the extensive screening, monitoring, and protective programs put in place to protect patients and employees entering healthcare facilities. In addition, providers report that they are seeing only 20-30% of their typical case load since the start of stay-at-home regulations, despite offering telehealth visits. The expected collective financial losses for children’s hospitals across the US are expected to be $10 billion or greater.
Congress enacted the Coronavirus Aid, Relief, and Economic Security (CARES) Act to provide emergency assistance for individuals, families, and businesses affected by the coronavirus pandemic. The CARES Act established various forms of relief for US citizens and businesses, including individual stimulus payments, temporary suspension of student loan payments, and forgivable small business loans. In response to the needs of the healthcare industry, the law provides additional funding for COVID-19 related treatment, limits the liability of volunteer healthcare professionals, prioritizes FDA approval of drugs related to COVID-19 care, allows emergency use of non-FDA approved testing for COVID-19, expands insurance coverage for COVID-19 related care, and revises the regulations in areas such as medical supply chain and telehealth services.
The law allocates $100 billion in public health and social services emergency funding for hospitals and health care providers, with the goal of addressing the economic impact of postponing elective and deferrable care as well as the additional expenses incurred due to the pandemic. The U.S. Department of Health and Human Services (HHS) first distributed $30 billion of the $100 billion in funding to hospitals and providers based on their share of total Medicare fee-for-service reimbursements in 2019. Adult hospitals are also receiving advanced Medicare payments and a 20% increase in Medicare reimbursement.
This initial distribution of funds essentially left out pediatric hospitals and other systems that see few to no Medicare patients. Thankfully, the second tranche of funding ($20 billion) was distributed later in April and directed towards low-Medicare providers, including children’s hospitals. Funds were distributed so that providers would receive a proportionate amount of the original $50 billion allocation of funding and distribution was based on the provider’s share of 2018 net patient revenues.
Although children’s hospitals ultimately received a proportionate amount of public health and social services emergency funding, there is still a great need for emergency funding for children’s hospitals. Children’s hospitals will not benefit from increased Medicare reimbursements, and will continue to see revenue loss and increased operating expenses as a result of the COVID-19 pandemic.
In response to the continued needs of children’s hospitals, the Children’s Hospital Association is urging Congress to designate an additional $10 billion specifically to children’s hospitals for COVID-19 relief. Despite the pandemic, children’s hospitals continue to care for fragile, complex, and chronically ill children. Even as caseloads normalize and deferrable procedures and appointments are rescheduled, pediatric health systems can expect continued financial strain. It is anticipated that, as a result of the current economic downturn, more families will rely on Medicaid for their children’s healthcare and many independent healthcare practices may close permanently.
To help with this effort, you can write your U.S. Representative or Senator to share how support for children’s hospitals is critical to ensure kids have access to health care during this public health crisis, and recommend that Congress designate an additional $10 billion to children’s hospitals in any future COVID-19 relief allocations.
Learn more at: https://actnow.io/uDIG7gq
1. Wietecha, M., Letter to the House of Representatives. 2020, Children’s Hospital Association.
2. Korioth, T., Federal officials: Pediatric practices will receive funding through CARES Act, in American Academy of Pediatrics. 2020, American Academy of Pediatrics: Online.
3. Ray, G., Trump Administration Pledges Relief to Children’s Hospitals in COVID-19 Fight. 2020, Children’s Hospital Association: childrenshospitals.org.
4. McConnell, M., CARES Act, U.S. Senate, Editor. 2020: Online.
5. Office, H.P., HHS Announces Additional Allocations of CARES Act Provider Relief Fund. 2020, Department of Health and Human Services: Online.
Averi Wilson, MD