Children's Hospitals Welcome Essential COVID-19 Relief from HHS Allocation

WASHINGTON, D.C. — On April 24, the Department of Health and Human Services (HHS) released a second tranche of Coronavirus Aid, Relief and Economic Security (CARES) Act funding for providers, including allocations to those who were effectively excluded in tranche 1 such as children’s hospitals. We are grateful HHS, supported by congressional advocates, broadened the relief effort to recognize the negative financial impact of the COVID-19 surge response on all providers.

CARES tranche 1 relief allocations were based on Medicare revenues for purposes of expediency and reach. Children's hospitals were not supported from this distribution as they do not serve Medicare patients (65 years and older). However, children's hospitals are among the highest Medicaid providers in the country, with Medicaid accounting for over 50% of their patients. In basing tranche 2 allocations on total revenues, HHS advanced the congressional intent of the legislation to provide COVID-19 surge relief across the nation's provider system.

While children's hospitals represent only 2% of all the nation's hospitals, they serve as a foundation for the health care of all the nation’s nearly 80 million children – nearly 25% of the U.S. population. In standing with America's national COVID-19 surge response, children's hospitals deferred pediatric care and experienced significant drops in volumes related to local and federal stay-at-home guidance. As a result, patient care revenues have fallen upwards of 40%-50%, generating operating losses in excess of $2 billion monthly across the nation’s children’s hospitals. Combined with higher costs to screen, test and protect health care staff, patients and families, the COVID-19 pandemic has created catastrophic financial damage threatening the essential role children's hospitals play in the future of our country.

The COVID-19 relief allocations provided by HHS this past week to children's hospitals have mitigated only a fraction of this damage. While an essential start, continued relief is needed to offset the growing damage of COVID-19 on children's hospital operations including personnel cuts and possible reduction of essential clinical and community programs serving children and families. As the administration and Congress work to address the COVID-19 crisis across all sectors of the national economy, continued relief from the remaining tens of billions of dollars in the CARES relief program is an essential step in preserving the health of our children and the health of the children’s hospitals caring for them.