Letter to Alex Azar, Secretary of the Dept. of Health and Human Services - Senators Markey and Warren Call on Trump Admin. to Meet Massachusetts' Needs and Ensure Equity, Transparency in Hospital and Health Care Provider Relief Funds

Letter

Dear Secretary Azar,
Massachusetts hospitals, health care facilities, and health care providers are experiencing serious
financial challenges during the novel coronavirus outbreak and require significant assistance
from the Department of Health and Human Services (HHS). The Coronavirus Aid, Relief, and
Economic Security (CARES) Act created a $100 billion Provider Relief Fund from which HHS
has already distributed $30 billion in initial funding to health care providers. But the manner in
which HHS has disbursed these funds to health care providers in hard-hit states such as
Massachusetts has not adequately addressed their needs. We call on HHS to recognize this
shortcoming and make needed adjustments to future Provider Relief Fund disbursements. These
adjustments are particularly important as Congress contemplates providing an additional $75
billion in provider relief funds through the Paycheck Protection Program and Health Care
Enhancement Act, which is awaiting action in the House.

The $841 million that HHS has distributed to Massachusetts health care providers in this first
round of funding is a tremendous help and a necessary first step. In particular, we appreciate
that HHS based the funding allocation for this initial disbursement on rigorous data, specifically
2019 fee-for-service Medicare reimbursements. This transparent funding allocation enabled
HHS to disburse these funds quickly, allowed health care providers to plan based on an expected
amount, and provided much-needed assurance that HHS would distribute the funds consistent
with objective data and evidence. This transparent methodology stands in contrast to the way the
Trump administration has administered much of the coronavirus pandemic response.

The methodology HHS used, however, does not adequately account for the burdens that many
medical providers in Massachusetts and across the country face. In particular, hospitals and
health care facilities that treat a large number of patients covered by Medicaid or Medicare
Advantage, or provider types that see fewer Medicare beneficiaries, such as children's hospitals
or obstetricians, receive a disproportionately small share of these funds. Facilities or providers
newly enrolled in Medicare would receive no funds, and providers experiencing disruptions to
services they provided in 2019 -- for example, due to planned renovations or natural disasters --
see reduced benefits under the current formula. HHS should take care to ensure disbursements
from the Provider Relief Fund meet the needs of these providers.
Moreover, the initial formula did not account for the extreme impact in coronavirus hot spots.
Although Massachusetts represents 4.7% of all U.S. COVID-19 cases and 3.6% of all U.S.
deaths (as of April 17, 2020), Massachusetts received only 2.8% of the $30 billion initially
distributed.5 And although the funding Massachusetts received amounted to $44,000 per reported
COVID-19 patient in the state, other states such as Minnesota, Nebraska, West Virginia, and
North Dakota received more than $300,000 per reported COVID-19 case.6 HHS has
acknowledged this deficiency, and suggested that that coronavirus hot spots would be a priority
for remaining funds.7

As HHS works to fully implement the Provider Relief Fund, we urge you to prioritize funds for
health care facilities, providers, and other medical workers not adequately accounted for in the
initial disbursement -- in particular, in states such as Massachusetts that have the most COVID19 cases per capita. Health care providers facing large numbers of COVID-19 cases need substantial assistance as they race to treat infections and keep their facilities financially afloat. We also call on HHS to account for providers with large Medicaid and Medicare advantage
populations, provider types for whom Medicare is a smaller portion of their revenue, and
providers and facilities for whom 2019 Medicare revenues do not represent normal patient
volumes. These providers are likely to see many COVID-19 patients and experience financial
repercussions from this pandemic, but they are not accounted for in the initial disbursement
formula.

Finally, we call on HHS to continue to rely on clearly defined and objective criteria as it
determines subsequent Provider Relief Fund payments. We are encouraged by HHS's
transparency in the initial round of disbursements. However, we worry that as subsequent
tranches focus on areas disproportionately impacted by coronavirus, HHS could return to its
previous practice of directing resources based on political motivations. Moving away from
objective criteria to distributing funds by political influence or electoral significance is
unacceptable.

In light of all the preceding, we request answers to the following questions by April 30, 2020:
1. How does HHS plan to allocate future Provider Relief Fund disbursements to hospitals,
health care facilities, and health care providers?
2. How does HHS plan to address the failure of the initial round of disbursements to
adequately account for providers with large numbers of Medicaid or Medicare Advantage
beneficiaries, provider types who provide services to few Medicare beneficiaries, or
providers or facilities whose 2019 Medicare reimbursements do not accurately represent
their normal patient volume?
3. HHS has indicated that it will consider fund distribution to "hot spots" facing the largest
outbreaks in coronavirus pandemic. How does HHS intend to identify these "hot spots"?
What formula, methodology, or data will HHS use to make these determinations?
4. In assessing whether a locality is a hot spot and targeting funding, how does HHS intend
to account for disparities in:
a. testing capacity and data collection,; and
b. COVID-19 prevalence and outcomes based on race, ethnicity, gender, or income?
5. How does HHS intend to examine whether the Provider Relief Fund is meeting the needs
of hospitals, health care facilities, health care providers, and other medical workers
employed at those facilities?
6. What are HHS' plans for transparency in future Provider Relief Fund disbursements,
including those envisioned by the Paycheck Protection Program and Health Care
Enhancement Act? Does HHS plan to make public the methodology for its funding
allocations, or to provide that information to state and local governments, hospitals, other
health care facilities, and health care providers? If not, why not? If so, please describe the
expected timeline for providing this information.

Thank you for your attention to this matter. Please contact Adam Axler with Senator Markey
(adam_axler@markey.senate.gov) or Susannah Savage with Senator Warren
(susannah_savage@warren.senate.gov) with any questions.

Sincerely

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