Trump administration skimps on coronavirus aid for Medicaid providers


The Trump administration’s program to aid hospitals and doctors on the front lines of the coronavirus crisis is leaving behind the nation’s Medicaid safety net — the pediatricians, mental health providers and hospitals that serve the poorest patients.

That result is likely to deepen inequalities in America’s healthcare system as tens of billions of dollars of federal assistance go primarily to large medical systems that serve higher-income patients with Medicare or private health insurance.

State leaders — Republicans and Democrats alike — are expressing alarm, warning that the federal coronavirus response is critically weakening Medicaid. The threat — which follows three years of largely unsuccessful efforts by President Trump and his congressional allies to slash the healthcare safety net — comes at the very moment that tens of millions of Americans are losing jobs and will probably need the government health plan.


“States have spent years building networks of providers to serve the very complex needs of patients who rely on Medicaid,” said former Arizona Medicaid director Tom Betlach, who is currently helping the state’s Republican governor run Arizona’s swamped social service programs.

“Now, states are struggling to figure out how they can keep these providers afloat without more assistance,” Betlach added. “There’s a lot of concern out there.”

Medicaid, the half-century-old health insurance program for the poor, together with the related Children’s Health Insurance Program, provide coverage to more than 70 million Americans, including nearly half of the nation’s children.

State Medicaid directors this week warned Health and Human Services Secretary Alex Azar that his department’s coronavirus response is inadequate, and called for more aid “in the next two weeks” to avoid widespread disruptions.

“This engagement with states must occur as soon as possible,” wrote Florida Medicaid director Beth Kidder and Arizona Medicaid director Jami Snyder, the president and president-elect, respectively, of the National Assn. of Medicaid Directors.

A coalition of leading mental health advocacy groups, including the National Alliance on Mental Illness and the National Council for Behavioral Health, sent Azar a similar warning, telling him that more than 60% of mental health providers have already been forced to close one or more programs.


And the American Academy of Family Physicians, the American Academy of Pediatrics and the American College of Obstetricians and Gynecologists pleaded with Azar this week for assistance. “If our member physicians cannot access urgently needed financial relief, their practices may close and patients will lose access to critical care,” the groups warned.

There is growing evidence this is already happening.

In South Carolina, Spartanburg Pediatric Health Center — one of the only pediatricians’ offices in the area that doesn’t restrict how many poor patients with Medicaid coverage it takes — is set to close in July. Dr. Shana Egge, one of the center’s pediatricians, said the health system that owns it concluded it could no longer afford to keep it open.

“I don’t know what will happen to the kids we care for,” Egge said. More than 70% of the clinic’s patients come from low-income families.

Hospitals, clinics and physicians’ offices across the country have seen a steep drop-off in business during the coronavirus outbreak as medical centers limit nonessential procedures and patients stay away, fearful of getting ill.

That prompted Congress to earmark $100 billion in emergency assistance for medical providers in the most recent aid package. But it left the distribution of this funding to the Department of Health and Human Services.

The department initially allocated money based on providers’ Medicare revenues, a calculation that favored hospitals and physicians that care for large numbers of elderly patients.


Last week, Azar announced yet another formula, which would allot additional aid largely based on medical providers’ total revenues. This tipped the scales even more toward hospitals, physicians and other providers that care for patients with commercial health insurance, which typically pays them much higher rates than either Medicare or Medicaid, the two main government health plans.

Particularly disadvantaged are medical providers that focus on poor patients. These practices, medical centers, nursing homes, mental health providers and other home- and community-based providers typically have lower revenues and fewer reserves to weather crises like a pandemic.

“The bigger your Medicaid business, the worse you do,” said North Carolina health Secretary Mandy Cohen. She said state leaders there are particularly concerned about rural hospitals and physicians’ offices that may not make it without immediate relief.

A spokesperson for the U.S. Department of Health and Human Services said the agency is trying to distribute money fairly. “There are some providers who will receive further, separate funding, including skilled nursing facilities, dentists and providers that solely take Medicaid,” the spokesperson said.

But in doctors’ offices and medical centers across the country, clinicians working with poor patients say they are running out of time.

Dr. Jennifer Sanderford, a pediatrician in Crested Butte, Colo., hasn’t paid herself in a month and was forced to put vaccines she ordered for her patients on a credit card. “There is just money being hemorrhaged with nothing coming in,” she said. Nearly a third of her patients are on Medicaid.


Cambridge Health Alliance, a large safety-net provider in Massachusetts, has been caring for hundreds of low-income workers in the Boston area diagnosed with COVID-19, the illness caused by the coronavirus. It has projected $90 million in losses this year, said Dr. Assaad Sayah, the chief executive, yet anticipates receiving only $6.7 million in new aid from the federal government.

Some of Cambridge Health Alliance’s work — such as helping to establish a shelter for homeless patients with the coronavirus — won’t even be factored into the aid formula, Sayah said.

“I don’t want to point fingers, but it seems like it’s the big players who are the ones who got listened to,” he said.

“Who is sitting at the table when decisions are being made? I know it’s not me. It’s not organizations like us.”