Trump administration to distribute $25 billion to Medicaid providers after delay

The Trump administration announced Tuesday it would distribute $25 billion to health providers caring for Medicaid patients following weeks of pressure from lawmakers and advocates.

The Department of Health and Human Services (HHS) had come under fire for its slow pace in sending out billions of dollars in coronavirus relief funds to providers in the safety net program, even as clinics and hospitals cut back services, lay off staff or shut down altogether. 

HHS announced Tuesday $15 billion would go to providers in state Medicaid and Children’s Health Insurance Program (CHIP); another $10 billion will go to safety-net hospitals that serve high volumes of Medicaid patients.

“Healthcare providers who focus on treating the most vulnerable Americans, including low-income and minority patients, are absolutely essential to our fight against COVID-19,” HHS Secretary Alex Azar said in a statement. 

“HHS is using funds from Congress, secured by President Trump, to provide new targeted help for America’s safety-net providers and clinicians who treat millions of Medicaid beneficiaries,” he added. 

Bipartisan members of Congress including Senate Finance Committee Chairman Chuck Grassley (R-Iowa) wrote HHS last week urging it to distribute emergency COVID-19 funding to Medicaid providers as soon as possible, noting their “serious concerns” with the delay.

While Congress appropriated funding more than two months ago to help health care providers weather the COVID-19 crisis, little of that assistance has gone to those who serve low-income patients, children, and people with disabilities.

“Many of these providers are safety net providers that operate on thin profit margins, if at all. The COVID-19 pandemic has strained their already scarce resources, threatening their ability to keep their doors open in the midst of a declared public health emergency,” the lawmakers wrote. 

The Trump administration has distributed billions in funding to help health providers through COVID-19, but most of that money has gone to providers in the Medicare program, the federal health insurance program for the elderly.

The problem largely lies in the complicated structure of the safety net program. It is easier for HHS to quickly send out funding to Medicare providers because it is a federally funded program. Medicaid programs are managed by states and providers are paid directly by state governments, which are reimbursed by the federal government at various rates.

HHS announced Tuesday it launched a “portal” that allows Medicaid and CHIP providers to report their annual patient revenue, which will be used to determine how much aid they will get.

The funding announced Tuesday is intended to benefit providers that don’t serve many Medicare patients, like pediatricians, substance use and mental health care providers, disability services providers and dentists.

Updated at 12:40 p.m.