Limitations of the Program for Uninsured COVID-19 Patients Raise Concerns

In early April, the Department of Health and Human Services (HHS) stated that it would use money from the Coronavirus Aid, Relief, and Economic Security (CARES) Act Provider Relief Fund to reimburse providers for treating uninsured patients with COVID-19. Congress has allocated a total of $175 billion for that fund. More recently, HHS officials stated that they plan to use provider relief funds to pay for COVID-19 vaccine administration for uninsured individuals once a vaccine is available. However, as HHS continues to make grants available to providers using this fund, it is not clear how much is being reserved to reimburse providers who treat uninsured COVID-19 patients or to fund future vaccine administration. Because Congress has not appropriated any money specifically for this purpose, the only money available for covering uninsured COVID-19 patients’ costs is the amount allocated from the provider relief fund. This raises questions about whether enough money is available to finance this care and if additional policy options are needed to more fully protect people who are uninsured.

Of the total $175 billion originally in the provider relief fund, HHS has now announced allocations that total $118.4 billion, leaving $56.6 billion remaining in the fund (Figure 1). HHS is continuing to give grants to providers out of the fund, with $15 billion allocated to Medicaid providers and dentists and $10 billion allocated to safety net hospitals on June 9, 2020 and an additional $1.4 billion in grants to Children’s Hospitals announced on August 14, 2020. HHS has also announced it will allocate another $10 billion for hospitals that as of June 10, 2020 had seen a high number of COVID-19 inpatients. That $10 billion follows a previous allocation of $12 billion to hospitals that had 100 or more COVID-19 inpatients by April 10. With hospital admissions for COVID-19 continuing, hospitals that face a later influx of COVID-19 inpatients may seek additional grants from the provider relief fund.

Figure 1: Announced Provider Relief Allocations as of Aug. 19, 2020

According to HHS guidance, its program to reimburse providers for treating uninsured COVID-19 patients is “subject to available funding.” KFF has estimated that hospital costs alone for these patients could be between $13.9 billion to $41.8 billion. HHS’s program will reimburse for both hospital costs along with many other services including office visits (including telehealth), non-emergency transportation, and for post-acute care. Providers accepting reimbursement are paid at Medicare rates and are prohibited from billing patients. If this funding runs out, uninsured patients could face unexpected medical bills for care they thought would be covered through the fund or they may delay or forgo care, which could have serious consequences for both their health and efforts to control the pandemic.

HHS has made data publicly available on the amount it has paid out to providers who have requested reimbursement for treating uninsured COVID-19 patients. The most recent data available includes reimbursements to providers as of August 20, 2020 and includes a total of $470 million in payments. More provider reimbursements are likely waiting to be processed. It is also unclear how many uninsured COVID-19 patients are being billed for their care because their providers are unaware of this program or have chosen to not participate. While large hospitals are likely to be aware of the program, smaller providers may not be participating simply because they may not be aware of this source of funding. Other patients may not be eligible because the program is limited to patients for whom COVID-19 is the primary diagnosis. In some cases, patients with sepsis due to COVID-19 are coded as having sepsis as their primary diagnosis, according to coding protocols.

This policy approach of using a finite amount of funding to reimburse for COVID-19 treatment for uninsured patients has important limitations. As noted, using the provider relief grant funds means there is a risk that funding could unexpectedly run out; providers unable to receive funding would face higher uncompensated care costs than they anticipated or could decide to bill uninsured patients. In addition, eligibility for reimbursement is narrow and contingent upon a primary diagnosis of COVID-19, making it much less comprehensive than traditional health insurance. Finally, providers are not required to participate in the program, and patients do not have easy visibility into which providers participate. If providers choose to not participate or if the fund runs out of money, they may bill uninsured patients directly. When uninsured patients pay for their own care, their bills are often calculated using the undiscounted “list prices” for care, which are typically much higher than the Medicare rates providers are paid through this HHS program.

A policy approach that was instead focused on promoting access to affordable health coverage during this time could provide broader protections for people who are uninsured or at risk of becoming uninsured. Policy options that enable people to afford and enroll in comprehensive health insurance would help them access care for all their health care needs, including possible COVID-19 testing and treatment, while also likely increasing government spending to a greater extent. Such policies range from subsidizing COBRA so that people can afford to maintain employer sponsored coverage after a layoff, increasing Medicaid coverage, and creating a new open enrollment period for marketplace coverage and potentially increasing subsidies to make that coverage more affordable.

Providers who treat uninsured patients with COVID-19 are already receiving reimbursement through the provider relief fund. Meanwhile, the number of new cases of COVID-19 and COVID-19 hospitalizations are increasing in nearly all states, particularly in states with larger numbers of uninsured residents, including Florida and Texas. Given these trends, the limited funds available to pay for care for the uninsured raises concerns about whether more could be done to ensure people who are uninsured will be able to access and afford needed care of all kinds during this pandemic and economic crisis.

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