Published April 8, 2020

Feds Commit “Marshall Plan” Funds to Reimburse Providers for Treating Uninsured COVID-19 Patients

The CARES Act, the $2 trillion COVID-19 relief package signed into law March 27, appropriates $100 billion to the Public Health and Social Services Emergency Fund “to reimburse, through grants or other mechanisms, eligible health care providers for health care related expenses or lost revenues that are attributable to coronavirus.” This funding has been referred to as the “Marshall Plan” for healthcare providers.

What Happened?

On April 3, HHS Secretary Alex Azar announced “a portion of that funding [will be used] to cover providers’ costs of delivering COVID-19 care for the uninsured.” Secretary Azar noted HHS is “already rolling out $1 billion in funding from the Families First Coronavirus Response Act to cover providers’ expenses for testing and diagnosing the uninsured,” and that funding for treatment would be distributed “through the same mechanism used for testing.”

According to Secretary Azar, “[p]roviders will be reimbursed at Medicare rates” for services provided to uninsured individuals.” Keep in mind Medicare will increase hospital payments by 20% for COVID-19 inpatients. To receive these funds, a provider must agree not to balance bill these individuals for the cost of their care.

Secretary Azar did not state what percent of the Marshall Plan funding would be used to cover the costs of treating the uninsured. He promised to “soon have more specifics on how the rest of the $100 billion will go to providers” and that HHS is “working to ensure that this funding is distributed in a way that is fast, fair, simple, and transparent.”

An analysis published by KFF April 7 “estimate[s] total payments to hospitals for treating uninsured patients under the Trump administration policy would range from $13.9 billion to $41.8 billion.”

What’s It Mean? 

Leaving aside any controversy surrounding the decision to use Marshall Plan funding to pay for care for the uninsured, let’s consider the mechanics by which providers will receive these payments.

The specific mechanism by which providers will submit claims and receive payment for treating uninsured individuals remains unclear. The $1 billion for testing, to which Secretary Azar referred, was appropriated to the Public Health and Social Service Emergency Fund, the same fund to which Congress appropriated the $100 billion Marshall Plan funding. Prior to these appropriations, the FY2020 budget for the Emergency Fund, which is administered by the HHS Assistant Secretary for Preparedness and Response (ASPR), was approximately $2.6 billion.

Under Title V of the Families First Coronavirus Response Act, the $1 billion for testing is to be used “for activities authorized under section 2812 of the Public Health Service Act…to pay the claims of providers for reimbursement, as described in subsection (a)(3)(D) of such section 2812….”

The referenced section of the Public Health Service Act establishes the National Disaster Medical System (NDMS). Under this authority, HHS may reimburse providers for “health services, health-related social services, other appropriate human services, and appropriate auxiliary services to respond to the needs of victims of a public health emergency….”

To this end, HHS created the NDMS Definitive Care Reimbursement Program. Subject to the availability of funds, this program “reimburse[s] institutions and practitioners that provide Definitive Medical Care to NDMS patients” generally at Medicare rates. According to the NDMS website, “[g]iven the relatively infrequent occurrence of public health emergencies requiring NDMS Definitive Care, all claims must be submitted to Apprio [NDMS’ contracted vendor] in hard-copy format using pre-printed claim forms.”

Despite Secretary Azar’s claim that HHS is “already rolling out” payments for COVID-19 diagnosis and testing for uninsured, no formal process for submission or payment of these claims has been announced, even though funding was appropriated nearly three weeks ago.

It remains to be seen whether HHS will utilize the existing NDMS Definitive Care Reimbursement Program or stand up new processes to pay providers for COVID-19 services for the uninsured. As the number of unemployed continues to grow and, consequently, the number of uninsured, providers should be capturing charges for these services in preparation for claims submission. Although not providing immediate financial relief, any future payments will be critical for providers in re-establishing their operations post-pandemic. Also, stay tuned for future announcements regarding HHS’ plans for the remaining Marshall Plan funds.

If you have any questions about reimbursement for treating uninsured COVID-19 patients, or would like additional COVID-19 guidance, visit PYA’s COVID-19 hub, or contact one of our PYA executives below at (800) 270-9629.

Disclaimer: To the best of our knowledge, this information was correct at the time of publication. Given the fluid situation, and with rapidly changing new guidance issued daily, be aware that some or all of this information may no longer apply. Please visit our COVID-19 Hub frequently for the latest updates, as we are working diligently to put forth the most relevant helpful guidance as it becomes available.

Executive Contacts

Interested in Learning More?

Sign Up for Our Latest Thought Leadership!

    Select Your Subscriptions