Hannah Norman/KHN illustration via Getty Images
Drops in revenue and higher costs incurred to deal with the COVID-19 pandemic continue to place a fiscal strain on metro Richmond health care providers.
A federal pandemic relief effort, the CARES Act, has helped to alleviate some of those costs, providing millions of dollars to Richmond’s major medical systems and to individual practices alike. According to federal reports, Richmond area health care providers received about $176 million in federal provider relief fund money.
The bulk of the funds went to the major providers: Bon Secours, HCA and VCU Health, which combined received about $122 million.
VCU Health reports it has received about $90 million in COVID-19 relief money through August. That has helped mitigate some of its pandemic-related costs, which total $172 million through August. VCU Health received $74 million through the CARES Act and $16 million funneled through the state via the CARES Act’s Coronavirus Relief Fund (CRF).
“The loss of revenues were substantial,” says Melinda Hancock, chief administrative and financial officer for VCU Health.
Bon Secours in metro Richmond received about $58.5 million in provider relief fund payments. In an email response, Bon Secours said that “the impact of the pandemic on health systems across the U.S., including Bon Secours, has been unprecedented,” but notes that it is well positioned in the market, and that patient volumes are slowly improving.
CARES Act funding also includes $15.4 million to Chippenham & Johnston-Willis Hospitals Inc. and $11.5 million to HCA Health Services of Virginia Inc. HCA declined to comment on its financials or its CARES Act funding.
Total federal money to health care providers nationally stands at $175 billion. America’s health care providers are facing billions in lost revenue as people delayed seeking medical attention because of the pandemic, even as providers faced additional costs for investing in protective gear and treating people with COVID-19. The American Hospital Association estimates that through the end of the year, health care providers across the nation will incur $323.1 billion in COVID-19-related losses.
Federal guidelines called for the money to be spent on COVID-19-related expenses, to “reimburse the recipient only for health care related expenses or lost revenues that are attributable to the coronavirus.” The number of coronavirus patient admissions at a facility was a determinant in CARES Act funding. That was determined by diagnostic coding and supporting evidence, such as a positive test for the novel coronavirus.
A Bon Secours representative in an email explained that the federal money covered “only a small part” of its costs in caring for people with COVID-19. The not-for-profit, faith-based health care system notes that it doesn’t bill COVID-19 patients for the care, though it submits claims to their insurance providers. “We are appreciative of any potential relief that may be offered to support our ministry, especially our rural hospitals, that allow us to remain focused on our mission of delivering high-quality, compassionate health care to all.”
As with other providers, revenues dropped from people postponing elective surgery and from costs incurred in providing protective gear and enacting safety protocols and precautions.
VCU Health says it redeployed about 600 people during the early months of the pandemic. CARES Act funds helped offset the pandemic-related drop in revenue and kept workers on the job. As conditions improved, patients who had delayed care began to return, and VCU had its staff on hand to shift back to regular duties. “We returned to pre-COVID levels pretty quickly,” Hancock says.
VCU Health operates on dynamic forecasting for its budget and readjusts its outlook quarterly. The third quarter ended in September, and Hancock says services have rebounded, so the budget will be tweaked accordingly. “Overall, we are back to where we were [pre-pandemic],” she says.
Where the Money Goes
Federal CARES Act funding to select metro Richmond health care providers
