Billions in Pandemic Relief Sent to Hospitals That Didn’t Need Funding: Report

By Bryan Jung
Bryan Jung
Bryan Jung
Bryan S. Jung is a native and resident of New York City with a background in politics and the legal industry. He graduated from Binghamton University.
December 7, 2022Updated: December 7, 2022

Billions of dollars in federal pandemic relief were sent to hospitals throughout the United States that did not need the funding, while other hospitals failed to meet their needs, according to The Wall Street Journal.

Washington distributed pandemic aid by using average hospital revenue as a proxy for size in order to calculate need, while not relying on COVID-19 caseloads, the outlet reported on Dec. 6.

The Provider Relief Fund, which was created by Congress in 2020, was designed to assist hospitals during the pandemic, but facilities ended up filled with patients who were sick from the virus, while refusing non-life-threatening surgeries that normally provided revenue.

Congress stated that the fund was meant to help health care providers pay for “health care-related expenses or lost revenues” stemming from COVID-19, but they were also required to return any funding not related to those categories.

Congress allocated more than $175 billion in aid to various health care providers, including hospitals, doctors, dentists, clinics, nursing homes, and other facilities, mostly between April 2020 and September 2021.

The Department of Health and Human Services (HHS), which was in charge of distributing the aid, spent nearly $75 billion in the first three months of the program, with a mandate to spend all of the allocated funds by June 30, 2021.

Billions in Aid Failed to Help Hospitals Most in Need

Profitable hospitals with large endowments that did not need the massive influx of funds received it anyway, while medical institutions that were overwhelmed with sick patients and needed additional funds received the same amount of cash, according to The Wall Street Journal’s review of financial disclosure reports.

A total of 1,257 hospitals that got federal pandemic aid and were already profitable received a total of $16.7 billion, with $53.6 billion in profits from patient care, not including aid taken in during the pandemic.

Some of these larger, wealthier hospitals were well off enough to put some of the excess money into investment funds, while others spent it on new facilities and expanded campuses.

The 783 hospitals that got $10 billion in aid moved from operating at a loss toward being profitable.

The 1,644 hospitals receiving $35 billion in aid reported a loss of $129.1 billion during the pandemic, not including the additional funds.

Many of the poorer hospitals were actually forced to lay off nurses and make other cuts because of the lack of aid, including those serving areas with the highest reported COVID-19 death rates.

“It’s a bit like your low-lying house is about to be flooded, and the National Guard shows up and drops off some sandbags for you, but also brings a bunch to the homes on higher ground that are not particularly at risk,” William Schpero, a health economist at Weill Cornell Medicine, told The Wall Street Journal.

Government Officials Attempt to Explain Waste

Federal officials have now admitted that they knew of the problems with calculations regarding federal aid distribution, but they said they ignored the flaws to get the money out quickly to make the June deadline.
Officials at HHS under President Joe Biden have tried to assign responsibility for the mix-up to the Trump administration, which handed out about 90 percent of the relief funds before Jan. 20, 2021.

HHS said that many of the key problems were fixed after Biden took office, with the remaining 10 percent of the funds being allocated under his watch.

However, the scandal is one among many regarding the misallocation of pandemic relief funds since 2021.

Under Biden, billions of dollars in federal COVID-19 assistance was sent to state governments under his American Rescue Plan, even though many states did not need it owing to a quick recovery, according to The Associated Press.

Some of the billions sent to the states were instead spent on state infrastructure projects, reported Fox News.

The White House has since moved from delivering pandemic aid toward pushing Americans into taking COVID-19 vaccines and boosters.

Meanwhile, the Secret Service has accused hackers linked to the Chinese Communist Party of stealing at least $20 million in federal pandemic relief funds, including some meant for Small Business Administration loans and unemployment insurance funds in more than a dozen states, reported NBC News.

The Associated Press contributed to this report.

Bryan S. Jung is a native and resident of New York City with a background in politics and the legal industry. He graduated from Binghamton University.