The House Committee on Oversight and Accountability is investigating how the Department of Health and Human Services (HHS) allocated COVID-19 relief funds to hospitals. Lawmakers are concerned that highly profitable hospitals received billions of taxpayer dollars while rural hospitals struggled financially. The committee has requested all documents and communications related to HHS’s decision-making process. This investigation highlights concerns over the allocation of COVID-19 relief funds and whether hospitals and healthcare providers that needed the funds the most received adequate support.
The House Committee on Oversight and Accountability is investigating the allocation of COVID-19 relief funds to hospitals by the Department of Health and Human Services (HHS). The lawmakers are concerned that highly profitable hospitals have received billions of dollars in taxpayer funds while rural hospitals are struggling to stay afloat. The committee has requested all documents and communications related to HHS’s decision-making process regarding which hospitals and providers received COVID-19 relief funds.
According to a letter sent to HHS Secretary Xavier Beccera on April 11, the lawmakers claim that nearly $17 billion of COVID-19 relief funds went to hospitals with reported profits of over $53 billion, while $35 billion went to hospitals that reported a loss of almost $130 billion. They argue that it is crucial to understand how HHS distributed these funds to hospitals that did not need them, while hospitals in need received minimal benefits.
Congress appropriated $178 billion in COVID-19 relief funds to providers through the Coronavirus Aid, Relief, and Economic Security (CARES) Act, the Paycheck Protection and Health Care Enhancement Act, and the Consolidated Appropriations Act of 2021. However, the lawmakers claim that 1,257 “money-making” hospitals received $16.7 billion of those funds while reporting $53.6 billion in profits in aggregate. In contrast, 1,644 unprofitable hospitals received only $35 billion from the Provider Relief Fund (PRF), even though they reported a collective loss of $129.1 billion.
The lawmakers also called out hospitals that received substantial help from the PRF but still eliminated jobs despite reporting a profit in 2020 and 2021. A 2021 Health Affairs study found that the primary distribution method for the PRF may have put some hospitals and communities at a disadvantage, with hospitals serving a very high share of Hispanic residents or those in a medically underserved area receiving decreased funding. Researchers from Harvard University stated in the study that, lacking a broader array of measures to guide allocation decisions, hospitals serving vulnerable populations might not have received support commensurate with need.
HHS used a revenue-based allocation model to distribute PRF funds at first and later switched to more targeted allocation methods. The revenue-based method, however, relied on Medicare administrative data to determine a hospital’s eligibility for PRF assistance. The lawmakers have called for a list of all hospitals and other healthcare providers that received PRF funds and how much they received. They also requested HHS send over all documents and communications related to providers that received PRF funds and laid off staff during the pandemic, as well as how many claims related to the medical debt they made against patients.
Additionally, HHS is to send the Committee any documents and communications it had with the White House regarding the PRF and related to the recoupment of PRF money from healthcare providers who were not qualified to receive the financial assistance. The Committee on Oversight and Accountability has broad authority to investigate the matter of COVID-19 relief fund misallocation under House Rule X, the letter added.
The investigation by the House Committee on Oversight and Accountability highlights a growing concern over the allocation of COVID-19 relief funds to hospitals and healthcare providers. While the funds were intended to help healthcare providers respond to the pandemic and keep their doors open, the distribution of these funds may have favored highly profitable hospitals over those that are struggling to stay afloat. This investigation will shed light on how HHS distributed COVID-19 relief funds and whether hospitals and healthcare providers that needed the funds the most received adequate support.