Peters: Trump administration has not distributed 41% of COVID-19 hospital funding

Sarah Rahal
The Detroit News

U.S. Sen. Gary Peters unveiled a report Tuesday detailing delays by the Trump administration in distributing $175 billion in coronavirus relief funds to hospitals.

The delays, Peters said, has led to layoffs and furloughs of healthcare workers during the pandemic.

The CARES Act was signed into law on March 27 by President Trump with bipartisan support. It provides more than $2 trillion in economic relief during the pandemic.

Nearly three months later, about $72 billion, or 41%, of the funding approved by Congress to support hospitals has still not been distributed, the report issued by Peters found.

Sen. Gary Peters speaks to a member of his staff during a news conference after a tour of the alternate care facility for COVID-19 patients at the TCF Center in Detroit on Wednesday, April 22, 2020.

The delays have contributed to the health care industry’s financial crisis, which has led at least 260 hospitals nationwide to temporarily furlough or permanently lay off health care workers, the report says.

The reason for the holdup is a mystery, Peters said during a press conference on Tuesday.

"The Trump administration is simply not sending it out," Peters said. "There is no fair reason. The money was appropriated. Congress had very specific instructions to get it out as quickly as possible and these are delays within the administration. 

"As they move slowly, that has increased number of people who are laid off or are on furloughs and is digging a deeper hole in the financial picture for hospitals and other health providers across the country. And I'm particularly concerned about our rural hospitals. Tthankshey don't have a cushion some of our larger systems have financially."

The White House and the U.S. Department of Health and Human Services did not immediately respond for comment Tuesday.

Michigan received $1.5 billion in relief funding, but it was not enough, Peters said.

In April, Michigan’s largest health care provider, Beaumont Health with 38,000 employees and eight hospitals, announced it would temporarily lay off 2,475 workers, permanently eliminate 450 positions and cut executive pay by 45%. Beaumont CEO John Fox said he expected, “economic pressures on Beaumont and the health care industry to continue well after the COVID-19 initial surge subsides.”

Trinity Health also temporarily furloughed 2,500 employees, about 10% of its staff, across eight hospitals. Henry Ford Health System followed suit, temporarily furloughing about 2,800 employees across six hospitals. Michigan Medicine announced in May it laid off or furloughed 1,400 health care workers to cope with $230 million in lost revenue during the COVID-19 crisis.

Peters called for immediate action to distribute the remaining $72 billion in funds and prioritize funds for hospitals in COVID-19 hot spots, like Michigan, along with rural and low-income areas, which are at higher risk of closure, he said.

"The amount of how reimbursements were made were not necessarily correlated to hot spots as to where hospitals were really taking in a lot of COVID patients that had the most significant financial impact," Peters said. " ... You have some hospitals that received more money than they needed and others were in a shortage situation." 

A 2019 analysis prior to the pandemic found that in Michigan, 18 rural hospitals

were at high risk of closing, accounting for about one-fourth of rural hospitals in the state, according to the report.

Dickinson County Memorial Hospital in the Upper Peninsula was highlighted as one of the at-risk hospitals. In 2018, Dickinson was able to avoid filing for bankruptcy only by cutting its workforce by more than 100 employees and streamlining operations. Now, the hospital has few options for revenue with no COVID-19 patients and no outpatient procedures, according to the report.

The American Hospital Association estimates a total financial impact of more than $200

billion in losses for hospitals and health systems over a four-month period due to the

COVID-19 pandemic.

Peters promoted passing the additional $100 billion in the HEROES Act, which has been passed by the House of Representatives and awaits Senate consideration, for the CARES Act Provider Relief Fund.

As of Tuesday, Michigan's death toll stands at 6,109 and 68,197 cases of coronavirus. Wayne County, which includes Detroit, has the fifth-highest COVID-19 death rate in the country, according to tracking by Johns Hopkins University.

As of June 19, 49,290 people have recovered from the virus, according to state data.

"Places like Detroit did not receive the funds despite being hit very hard and that's simply unacceptable," Peters said. "And we can't continue doing that. With this money that's remaining there should be a consideration from the administration as to those places that were hit hardest to make sure that those health systems get the additional support that they need."

Twitter: @SarahRahal_