A deadline, then a viral surge and Florida hospitals miss out on pandemic aid

TALLAHASSEE, Fla. — Federal rules governing coronavirus aid have shortchanged Florida hospitals, where cash reserves at two of the state’s biggest safety-net facilities were wiped out by the summer surge of Covid-19 cases, company executives said.

Top executives at Jackson Health System and the University of Florida Shands Hospital said only $4 billion of the $175 billion in CARES Act aid to health care providers has found its way to Florida, which has recorded the third-highest number of infections in the country.

“It’s going to be a miracle if we end up breaking even this year, but I think we will,” Jackson President and CEO Carlos Migoya said in an interview.

As the coronavirus resurges in parts of the country, the distribution of aid to hospitals that care for the neediest patients has proven lopsided. A deadline set by the U.S. Department of Health and Human Services directed more than $21.5 billion of the aid to states where the outbreak hit early, a decision that caught later hot spots, including Florida and Arizona, flat-footed.

Fears of a resurgent outbreak have hospitals clamoring for another shot of federal money before the end of the year. But with talks between the White House and House Speaker Nancy Pelosi stalled, another coronavirus relief package is unlikely until after the November election.

Florida, which has recorded nearly 745,000 infections, has received $3.97 billion from the Provider Relief Fund included in the CARES Act. By contrast, New York, including New York City, had two-thirds the number of infections but received more than twice as much money, $10.8 billion, according to HHS data.

On reason for the disparity is what HHS calls its high-impact distribution fund, which gave preference to hospitals that tended to the highest number of Covid-19 patients. But the fund included a cutoff date that didn’t help late-breaking hot spots. Hospitals that had admitted 100 or more Covid-19 patients between Jan. 1 and June 10 were offered $22 billion of the $175 billion Provider Relief Fund. Cases in Florida, Texas, Arizona and California surged days later.

New York received the biggest share of high-impact aid, at $5.8 billion. Florida, where Covid-19 infections didn’t peak until later in the summer, received $660.3 million, according to HHS data.

“My biggest, the single biggest, disconnect is the fact that the federal government chose to do hot spot rounds, and that they ended the hot spot designation on June 10,” Safety Net Hospital Alliance of Florida CEO Justin Senior said in an interview.

“If there’s another wave of this virus in Florida's hospitals, that is going to be an extremely difficult situation,” Senior said.

Florida’s caseload surged around the June cutoff date for the high-impact distribution. Between March and June 10, 2,801 people in the state had died from Covid-19 and 67,371 had tested positive for the virus, according to data from the Florida Department of Health.

Two months after the cutoff date, deaths had nearly tripled and the state was coping with an eightfold increase in cases.

Jackson and Shands are among 30 safety net hospitals designated to treat Florida’s poorest and typically uninsured residents. Combined, the hospitals have treated 60 percent of the state’s 46,693 hospitalized Covid-19 patients, but have received a sliver of the funding given to some states that saw fewer infections.

Gainesville-based Shands Hospital lost $160 million in revenue because of the pandemic and has received only $31.4 million in CARES Act aid. The shortfall forced Shands CEO Ed Jimenez to freeze employee raises indefinitely.

“Imagine you're a nurse, and you take care of Covid patients, and your boss just said you don't get a raise,” Jimenez said in an interview. “If Florida had gotten its fair share, if the safety nets had gotten their fair share, if my hospital had not been overlooked in the safety net tranche, things would be better.”

“They wouldn’t be great but they’d be better,” Jimenez said.

While Shands received $31.4 million from the Provider Relief Fund’s first phase of general distribution, it received no high-impact aid.

Jackson, which lost more than $78 million in revenue from the pandemic, said it received a combined $108 million from high-impact and general distributions. HHS data shows Jackson received $83.1 million from the high-impact fund.

And both Shands and Jackson got nothing from $14.4 billion set aside for safety net providers because, under HHS rules, both hospitals made too much money.

In Jackson’s case, the federal agency counted revenue from a tax levied by Miami-Dade County that funds the hospital. At Shands, Jimenez was unable to write off $68 million tied to the teaching hospital’s partnership with the University of Florida.

“After that, not a dime,” Jimenez said of the first phase of cash. Sens. Marco Rubio and Rick Scott heard his complaints, he said, but the Republican lawmakers told him there was little they could do.

“At the end of the day, it's HHS, which is not subject to the will of the Congress or Senate,” JImenez said.

Talks with HHS Deputy Secretary Eric Hargan about updating the distribution rules went nowhere, Migoya said.

“Deputy Secretary Hargan was talking to me about it, and trying to figure out how to help us,” Migoya said. “It still didn't happen.

“Obviously that was never the intent of the CARES money — that was to make up for lost revenues, but we’re not even close to that,” Migoya said.

When asked about the complaints from Jimenez and Migoya, a HHS spokesperson who would speak only on the condition of anonymity pointed to $20 billion set aside for Phase 3 of the general distribution, which opened for applications Oct. 5. Hospitals and other providers can apply for the funding until Nov. 6.

“HHS encourages hospitals to do so,” the spokesperson said.

Gov. Ron DeSantis, a Republican and staunch supporter of President Donald Trump, said the federal government misjudged the course of the pandemic when it distributed most of the health care aid in the first three months. But mitigation efforts led by the White House have battle-tested the state’s 300 hospitals for the next surge, DeSantis said.

“There's no question that that was something that was handled appropriately,” he said at a news conference at a Panhandle hospital last week.

Rachel Roubein contributed to this report.