HHS Secretary Xavier Becerra
HHS Secretary Xavier Becerra Credit: Photo by Greg Nash- Pool/Getty Images

The Department of Health and Human Services is finally releasing a portion of the additional $25.5 billion in COVID-19 Provider Relief Fund Phase 4 payments to healthcare providers, the agency announced on Tuesday. 

HHS, through the Health and Resources and Services Administration, later this week will start distributing approximately $9 billion to providers that have experienced revenue loss and or increased expenses related to the pandemic. The agency first announced the $25.5 billion in relief funding in September and providers had expected payments to begin rolling out later that same month.

More than 69,000 providers will be receiving payments. The average payment being made to small providers is $58,000; for medium providers it is $289,000; and for large providers it is $1.7 million, according to HHS. 

A LeadingAge spokeswoman on Tuesday said providers and advocates have been anxiously awaiting the arrival of these funds, while also calling for the release of more money. She added that providers’ needs are significant and they continue to grow as the public health emergency continues and new COVID variants emerge.

“After nearly two years of shouldering significant COVID-related costs, aging services providers, who operate on narrow margins in the best of times, need assistance. Many are weighed down by losses and ongoing expenses for PPE, resident and staff testing, and support to retain staff,” she said in a statement to McKnight’s Long-Term Care News

LeadingAge called Tuesday’s distribution announcement “good news” and the organization hopes the remaining funds will soon follow. 

This funding phase, widely believed to be the last, includes $8.5 billion in American Rescue Plan resources for providers who serve rural Medicaid, Children’s Health Insurance Program or Medicare patients, and an additional $17 billion for Provider Relief Fund Phase 4 for providers who can document revenue loss and expenses associated with the pandemic.

Approximately 75% of Phase 4 funding is being distributed based on expenses and decreased revenues from July 1, 2020 to March 31, 2021. HRSA is also reimbursing a higher percentage of losses and expenses for smaller providers.

HRSA is also distributing 25% of Phase 4 funding as “bonus” payments based on the amount and type of services provided to Medicare, Medicaid or CHIP patients.

“Overall, our greatest disappointment is in the inadequacy of the total amount of Provider Relief Funds allocated by Congress and made available for distribution in light of the enormous outstanding need,” the spokeswoman said. “Because of this, HRSA was only able to cover 45% of small provider’s lost revenues and coronavirus expenses between July 1, 2020, and March 31, 2021; for medium-size providers, a mere 25% was covered; and for large providers, 20%.” 

She added that some nursing homes, assisted living, home care and community-based service providers have been pushed to the financial brink.

“If those providers close, consider the consequences: not only the loss to a community of a business and the jobs they provide and help support in other sectors, but heart-wrenching and potentially dangerous disruptions for older adults and families who must scramble to find a new care provider,” she added.