Cash Conservation Mode
It is becoming increasingly more important in 2020 for hospitals and healthcare centers to conserve cash as uncertainty continues to impact bottom lines and strain cash flow. In 2020, Med One Group has supported our customers’ cash conservation needs by offering customized financing, deferral & rental solutions during these unpreceded times. As we look to the next 12 months, there are several variables which may affect hospitals’ liquidity:
Liquidity Positives:
$ Resurgence of elective procedures
$ Additional CARES Act Provider Relief Fund support
$ Increasing volumes/revenues with reduced COVID-19 case levels
Liquidity Negatives:
$ Repayment of Medicare advances
$ Weakening payor mixes (potentially a higher uninsured population)
$ Revenue declines & reduced margins
$ Increased spending in PPE
There is no doubt that cash conservation is impacting providers at all levels. What does the remainder of 2020 look like for the economy and the healthcare industry? Will there be a vaccine soon? Not having a crystal ball, I believe that these liquidity variables should be considered by hospitals and their respective impacts measured. In the meantime, as hospitals need essential use medical equipment, Med One Group is “open for business” and here to provide meaningful solutions making medical equipment available for patient care.
Also worth mentioning is the unprecedented relief funding provided through the CARES Act. To date through August 2020, the CARES Act Provider Relief Fund has provided approximately $175 billion in relief distributions. Below I have included the distribution timeline and specifics since the support provided through this Act is substantial, interesting, and comprehensive.
CARES Act Provider Relief Fund Distribution Timeline
April 10 - April 17 (General Distribution: First Round)
$30 billion distributed to nearly 320,000 Medicare Fee-For-Service (MFFS) billing providers based on their portion of 2019 MFFS payments.
April 24 (General Distribution: Second Round)
$9.1 billion to almost 15,000 Medicare Fee-For-Service billing providers based on revenues from CMS cost report data.
Starting April 24 (General Distribution: Second Round)
$10.9 billion available to Medicare Fee-For-Service billing providers based on revenue submissions to the provider portal. ($2.4 billion distributed as of 6/15)
May 6 (Rural Distribution)
$10 billion to almost 4,000 rural health care providers including hospitals, health clinics, and health centers.
May 7 (High-Impact Distribution)
$12 billion to 395 hospitals that had 100 or more COVID-19 admissions between Jan 1 and Apr 10.
May 22 (Allocation for Skilled Nursing Facilities)
$4.9 billion to over 13,000 certified Skilled Nursing Facilities.
May 29 (Allocation for Tribal Hospitals, Clinics, and Urban Health Centers)
$500 million to approximately 300 IHS programs.
June 3 (General Distribution)
Deadline for providers to submit revenue information and apply for a portion of the additional $20 billion General Distribution funding.
June 8 (High-Impact Distribution: Second Round)
To be considered for a second round of funding, hospitals are allowed to update their number of COVID-19 positive inpatient admissions between January 1, 2020 and June 10, 2020. Deadline for submissions: June 15, 2020.
June 9 (Medicaid & CHIP & Safety Net Hospitals Distribution)
HHS expects to distribute approximately $15 billion to eligible providers that participate in state Medicaid and CHIP programs and have not received a payment from the Provider Relief Fund General Distribution and $10 billion to safety-net hospitals.
July 10 (Safety Net Acute Care Hospitals, Certain Specialty Rural Providers)
HHS announces approximately $3 billion in funding to hospitals serving a large percentage of vulnerable populations on thin margins and approximately $1 billion to specialty rural hospitals, urban hospitals with certain rural Medicare designations, and hospitals in small metropolitan areas.
July 17 (Second Round of COVID-19 High-Impact Distribution)
$10 billion to hospitals with over 161 COVID-19 admissions between January 1 and June 10, 2020, one admission per day, or a disproportionate intensity of COVID admissions.
August 7 (Allocation for Nursing Homes)
$2.5 billion to nursing homes mid-August to support increased testing, staffing, and PPE needs. This will be followed by additional performance-based distributions throughout the fall.
August 14 (Distribution to Certain Children's Hospitals)
HHS to begin distributing $1.4 billion to 80 free-standing children's hospitals.