Mansur Shaheen | Mar 3, 2021

Hospital officials in Illinois are calling for hospital funding to be included in the $1.9 trillion federal COVID-19 relief package being discussed by the federal government. This funding is among other changes they believe are necessary to support them. Without relief, some hospitals may be in financial ruin by the end of the year.

The Illinois Hospital Association (IHA), which represents 200 hospitals in nearly 40 health systems across the state of Illinois, believes that three actions need to be taken in order for them to stay financially afloat in 2021. The first is providing additional funding for the Provider Relief Fund.

Danny Chun, a representative from the IHA, told State of Reform:

“There’s no specific relief for hospitals which are still sustaining huge losses from COVID and dealing with the pandemic for the past year. So for example, we are asking for an additional $35 billion being added to the Provider Relief Fund.”

The relief fund is money set aside by the federal government to support hospitals and health clinics who have struggled during the COVID-19 pandemic. It was reported earlier this week that the Trump administration had diverted $10 billion in funding from the fund towards Operation Warp Speed. Chun says hospital officials currently do not know if those funds will be replaced under the Biden administration.

The IHA is also calling for the suspension of the 2% Medicare sequestration payment adjustment to be extended. The initial suspension was a part of the CARES Act, which passed last March, and went into effect in May. It will expire on March 31.

The 2% sequestration adjustment went into effect in 2012. It reduces all Medicare payments by 2% in an effort for the federal government to control the national debt.

With President Joe Biden extending the pandemic national emergency for at least another year, Chun and the IHA are hopeful that many policies that went under effect in the last emergency – like the sequestration suspension – will be extended along with it.

The third federal policy they are looking for is the senate to delay repayment – or potentially even forgive – loans taken out through the Medicare accelerated and advanced payment program. Under the program, many hospitals were given loans or advanced Medicare payments in order to help them during a time of financial precarity.

Some of the repayments on those loans will be due soon, though some hospitals are still in the same precarious position now that they were in when the program was first instituted last year.

A report by the American Hospital Association finds that hospital revenue could be down between $53 billion to $122 billion in 2021 compared to the average pre-pandemic year. Revenue decreases come from hospitals no longer being able to perform elective surgeries as often during the pandemic and some other patients who would otherwise visit a hospital choosing not to do so due to fear of the virus.

The decreases in revenue also come along with increased costs for drugs, purchased services, labor and supplies like Personal Protective Equipment during the pandemic.  

Chun said that without changes being made at the federal level, local legislators will not be able to do much to protect hospitals during these times. What the hospitals need is funding and local legislators need the federal government to sign off on giving that funding first.