Letter to the Hon. Alex Azar, Secretary of the Dept. of Health and Human Services - Schumer reveals: As pandemic leaves CNY hospitals strapped for cash & layoffs on the horizon, they miss out on federal recovery $$$ due to bureaucratic guidelines; Schumer calls on Feds to immediately give financially-devastated NY hospitals -- like Crouse & St. Joe's -- their fair share

Letter

Dear Honorable Sec. Azar,

I write to request that the Department of Health and Human Services develop and distribute a new tranche from the Public Health Services and Support Emergency Fund (PHSSEF) for providers that would support those hospitals in New York State that were not aided by the previous specialized tranches targeted at hospitals in COVID-19 hotspot areas, rural hospitals and safety net hospitals with all due speed.

As you know, New York State has and continues to suffer enormously during the coronavirus pandemic. For months, New York was the global epicenter of the crisis with new cases hitting over 10,000 a day at one point. Though making large strides onto the road to recovery, New York still has the highest recorded number of coronavirus cases at over 400,000 and it's over 30,000 COVID-related deaths over double the number of any other state (NYT Cite). As a result of this incredible suffering, New York now faces one of the most challenging public health and economic crises in recent history.

In April 2020, Congress included $100 billion in the Coronavirus Aid, Relief, and Economic Security (CARES Act) and an additional $75 billion in the Paycheck Protection Program and Health Care Enactment Act for the PHSSEF to support providers throughout the country during the COVID-19 pandemic. This appropriation in both pieces of legislation was intended to reimburse providers for "health care related expenses or lost revenues that are attributable to coronavirus."

To date your Department has distributed $92 billion across five separate tranches. The Department employed a formula to allocate the first $50 billion to Medicare providers based on available data of the providers' previous year revenue. In this first distribution New York State's hospitals received over $1.45 billion dollars. Your Department then delivered subsequent tranches that delivered money to hospitals with eligibility and funding levels based on whether they were located in areas with high levels of COVID-19 cases, rural designations and whether they had safety-net status. In all, 182 hospitals across New York State, hospitals in the state hardest hit by the coronavirus pandemic, received additional support through these targeted tranches from the provider fund.

However, these distribution formulas and eligibility standards excluded roughly two dozen hospitals across New York State that suffered enormous financial losses. These hospitals complied with all federal and state protocols and recommendations by forgoing elective procedures and investing heavily in preparation for the COVID-19 pandemic. These sacrifices and proactive measures resulted in tens of millions of dollars in lost revenue and high coronavirus-related expenses. While these losses mirror those incurred by the 182 hospitals captured by the specialized distributions from the provider fund, the two dozen hospitals left out of these distributions suffered these losses without further assistance from the fund.

For example, Crouse Hospital in Syracuse, New York is expected to lose nearly $20 million dollars by December 2020 and currently only has 43 days cash on hand. In addition to the impact on cash, COVID-19 has significantly decreased Crouse's income and debt service coverage ratio, which could cause the hospital to be in default on its debt, including significant penalties. To this date, Crouse has received $8M from the PHSSEF, leaving over a $10 million budget hole remaining. Similarly, St. Joseph's Hospital in Syracuse is projecting a $40 million loss through the year and has already announced layoffs and permanent facility closures, but has received $11 million dollars from the PHSSEF.

I ask that your Department craft a new distribution formula from the PHSSEF provider fund that captures Crouse and St. Joseph's Hospital and the other 23 hospitals that have not been adequately supported by the Department amid this crisis.

I thank you and your Department for your service during this crisis.

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