HHS Awards $523 Million in Second Round of Value-Based COVID Relief for Nursing Homes

A smaller group of nursing facilities will split a larger pot of cash in the second round of the federal government’s four-part value-based competition for COVID-19 relief dollars.

The Department of Health and Human Services (HHS) on Monday announced the pending distribution of $523 million in performance-based stimulus payments to about 9,200 nursing homes that achieved specific coronavirus infection and death reduction benchmarks between September and October.

About 69% of the more than 13,000 eligible properties met the infection-control challenge, down from the 76% of properties that performed well enough to land an incentive payment during the first month of competition in September, with HHS doling out a total of $333 million.


“While less than the first cycle, the collective efforts of these nursing homes resulted in over 3,900 fewer infections relative to the rates seen in the communities where they exist,” HHS observed in a statement announcing the second round of awards.

On the mortality metric, 68% of facilities either met or exceeded the “expected” death rate as determined by HHS.

The payments will start to hit qualifying operators’ bank accounts on December 9.


“We find this is succeeding because even as nursing homes are facing increased challenges, as the rates of COVID-19 infections are on the rise across the country, many nursing homes in this program were able to maintain and in many instances improve the infection rates within their facilities,” a senior HHS official said on a Monday press call.

The federal relief efforts for nursing homes and other health care providers had been mostly an open firehose of cash prior to the incentive program, with Centers for Medicare & Medicaid Services (CMS) administrator Seema Verma describing the first round of $30 billion in Medicare relief as coming with “no strings attached” during an April press conference.

As deaths in nursing facilities mounted throughout the spring and summer, the direct federal aid received increasing scrutiny from resident advocates and the media; multiple outlets highlighted the checkered regulatory histories — and uneven COVID-19 performance — of some operators that had benefited from the CARES Act stimulus.

HHS finalized the value-based relief structure in September, dividing the overall $2 billion into four pots of $500 million apiece. Each month, operators would have a chance to receive a portion of that $500 million by lowering COVID-19 infection and mortality rates, adjusted to account for regional variations in community spread.

“The Trump administration has focused resources throughout our response on protecting the most vulnerable, including older Americans in nursing homes,” HHS secretary Alex Azar said in a statement at the time. “By tying these new funds for nursing homes to outcomes, while providing the support they need to improve quality and infection control, we will help support quality care, slow the spread of the virus, and save lives.”

Given the $523 million price tag for the second distribution, the senior HHS official on Monday clarified that the $500 million-per-month target was merely an average and not a specific cap — and that another month topping that figure could be on the way.

“We would be delighted if the the payments for the November period continue to exceed $500 million,” the official said.

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