Since the start of the COVID-19 pandemic, Congress has made approximately $300 billion in funding available to health care providers. The money was intended to help providers pay for costs related to treating COVID patients, as well as making up for revenue losses due to utilization declines. However, there was little accountability nor transparency on how these funds were to be distributed and used.
There is no doubt that health care providers need support to cope with the unexpected demands of a pandemic that is still very much with us in mid-2021. But not every hospital has the same level of need for federal support. In fact, many rural hospitals and safety-net providers treating primarily Medicaid and uninsured patients are facing significant financial challenges due to the pandemic, and should be prioritized to receive greater levels of COVID relief funds. At least 18 rural hospitals closed last year (adding to the more than 170 rural hospitals that have closed nationwide since 2005), and a number of inner-city hospitals have faced a similar fate.
Meanwhile, some of the nation’s richest hospitals and health systems that typically serve a large number of privately insured patients have gotten richer with large surpluses after accepting millions of federal dollars. This is because of the previous administration’s distribution formula, which largely rewarded hospitals with greater past revenue instead of prioritizing safety-net hospitals. It is also disconcerting that these same hospitals and health systems that received COVID relief funds have continued to sue patients even during the public health emergency –filing lawsuits, putting liens on homes and bank accounts, and garnishing wages – over unpaid medical bills.
For example, one study found that 55 hospitals in New York State had sued over 4,000 patients since the pandemic began in March of 2020, including the state’s largest health system (Northwell), which sued more than 2,500 patients during the pandemic. It was only after the lawsuits were exposed in the New York Times that Northwell announced it was rescinding all these lawsuits. A CNN investigation found that while many hospitals ceased filing such lawsuits, the Community Health Systems chain filed at least 19,000 lawsuits over allegedly unpaid medical bills since the pandemic began, despite generating $448M in profits and receiving COVID-19 relief funds.
Now that we are confronted with a new surge of infections brought on by the more contagious Delta variant, hospitals and health systems must proactively respond to the needs of the communities they serve. We call on institutions receiving federal relief funds to be accountable to U.S. taxpayers and immediately take the following three steps to ensure the communities they serve come out of this crisis healthily.
Firstly, stop pursuing predatory billing and collection practices that impoverish patients. Medical debt has already affected nearly 19 percent of people nationwide – nearly 28 percent of Black households and just under 22 percent of Hispanic households had medical debt in comparison to 17 percent of white non-Hispanic households. But now it has been growing at a faster pace during the past year as people lost their jobs and health insurance. Medical debt collection activities have a chilling effect on health care needs being met. People with bills in collection are likely not to seek testing or treatment for COVID-19 or other pressing medical conditions. Those who have survived the disease now face huge medical bills, and declaring bankruptcy might be their only option. It is long overdue for hospitals and health systems to treat all patients fairly and avoid inflicting, not only physical harms on their patients, but also unjustifiable financial harms.
Secondly, inform the communities they serve that the federal government covers hospital bills for COVID-19 patients who don’t have health insurance. The federal government has created the Health Resources & Services Administration (HRSA) funding for uninsured patients to access COVID-19 services, including testing, treatment, and vaccination at no cost. But not many people know about it. Most people without insurance avoid seeking care for COVID-19 because of the fear of high medical bills, even though they might qualify for the program. Health care providers must deploy every possible strategy to ensure that people are aware of the opportunity to access COVID care at no cost to themselves. Partnering with trusted community-based organizations and stakeholder organizations (such as community health workers, community health centers, navigators, enrollment assisters) is one of the best ways to get the message out.
Finally, address health inequities. Decades of market-driven hospital consolidation, downsizing and closings have abandoned the most vulnerable low-income neighborhoods and rural communities. People from historically excluded populations – those who are low-income, Black, Latinx, Asian, Pacific Islander, Indigenous, immigrants, refugees, people with disabilities, Medicaid-insured, uninsured or LGBTQ – have struggled to obtain COVID-19 testing and treatment in their communities. These are the same groups of people who have been disproportionately harmed by COVID-19. Hospitals and health systems must listen to community members and work with them on concrete and practical actions to address racism and injustice in all of its forms that exist in our current health care delivery system.
In addition, federal and state health officials must take steps to ensure that hospitals receiving public funds, including COVID relief funds, are serving the communities most in need of care and are working to advance racial justice and equity in health care. In a letter to HHS Secretary Xavier Becerra in August, Community Catalyst Executive Director Emily Stewart urged the Secretary to condition receipt of federal relief funds on hospitals taking concrete steps to address health inequities, and to improve the transparency of how the provider relief funds have been and continue to be distributed.
The COVID-19 public health crisis highlights our interdependence – we are all at risk when anyone is left behind. As anchor institutions in communities, hospitals and health systems are in a unique position to advance health justice, promote economic security and preserve access to care for all.