Provider Relief Fund: The Formula That Paid Medicare First

Congress put $178 billion into the PRF to support health care providers facing COVID expenses, lost revenue, uninsured testing and treatment, and related pandemic needs.¹

CRS describes the first general distribution plainly. Phase One went to providers that billed Medicare fee-for-service because the government already had the payment relationship and could get funds out quickly. The first $30 billion was allocated based on Medicare fee-for-service payments; another $20 billion took account of gross receipts. CRS also notes the tradeoff: providers serving Medicaid and uninsured populations were either ineligible for that first allocation or received lower amounts because of the methodology.²

The formula was administratively rational and substantively skewed.

Large Medicare-heavy systems received money early because they had billed Medicare long before the pandemic. Safety-net providers, pediatric practices, and Medicaid-heavy providers were harder to reach through Medicare billing.

HHS and HRSA later tried to correct and target distributions, but the first move matters in an emergency. Early cash stabilizes payroll, vendors, debt, and executive decisions. Late cash arrives after the damage has already been triaged.

HHS-OIG found that HRSA's PRF controls could be improved and reviewed billions in Phase 1 payments.³ GAO later focused on HRSA's continuing efforts to recover remaining payments due from providers.⁴ Those oversight reports are the back end of the same design: once money moves by formula, the government has to spend years verifying whether the right providers received the right amounts and used them correctly.

The PRF's scandal is quieter than the ones with stolen identities and Lamborghini complaints.

Notes

HHS-OIG, PRF controls report, Source document; GAO, PRF recovery report, Source document. ↩
CRS, The Provider Relief Fund: Frequently Asked Questions, Source document. ↩
HHS-OIG, HHS's and HRSA's Controls Related to Selected Provider Relief Fund Program Requirements Could Be Improved, Source document. ↩
GAO, COVID-19 Provider Relief Fund: HRSA Continues to Recover Remaining Payments Due from Providers, GAO-23-106083, Source document. ↩