Did hospitals receive higher per-patient payments or new grants specifically for COVID-19 under CARES Act provisions?
Executive summary
The CARES Act delivered substantial, mostly grant-based financial support to hospitals and health-care providers—most prominently the Provider Relief Fund and other emergency distributions—rather than a universal, per-patient payment model; there were, however, specific Medicare payment changes that temporarily raised Medicare reimbursement for certain COVID inpatients and expedited cash via accelerated payment programs [1] [2] [3]. HHS administered large grant pools with broad discretion, sending many payments based on prior patient revenue or other formulas rather than a straightforward “per COVID patient” tariff, though targeted buckets did direct extra dollars to hospitals with high COVID caseloads [2] [4] [5].
1. CARES created large grant funds for providers, not a single per-patient tariff
Congress set aside emergency funding that was funneled into the Provider Relief Fund and related HHS programs—amounts reported as roughly $100–178 billion initially and a total of about $175 billion distributed through various phases and targeted disbursements—making these payments grants intended to offset lost revenue and COVID-related expenses rather than fee-for-service per-patient rates [6] [7] [1].
2. HHS distribution mechanics favored revenue-based and targeted grants over per-case payments
The first tranche of CARES Act funding was distributed by HHS using formulas tied to patient revenue and prior billing, with the initial $50 billion allocation notably based on hospitals’ patient revenue, not on per-COVID-case reimbursements; later distributions included Phase 2/3 general distributions and targeted payments to providers in need [4] [5] [1]. That revenue-based approach meant larger health systems often received bigger checks up front, a dynamic critics flagged as privileging scale over pandemic burden.
3. There were specific Medicare payment changes that raised reimbursement for COVID inpatients
In addition to grants, Medicare rules were temporarily amended: Congress and CMS created a Medicare “add-on” that increased Medicare payment rates by 20% for inpatients diagnosed with COVID-19 during the public health emergency and expanded accelerated Medicare hospital payments and interim payment mechanisms to push cash quickly to providers [2] [3]. Those changes are distinct from PRF grants because they altered Medicare reimbursement per qualifying inpatient claim rather than giving unrestricted grant dollars.
4. Targeted top-ups for high-COVID hospitals existed, but most support remained grant-oriented
The CARES distribution strategy included targeted allocations—such as a reported $22 billion set aside for hospitals with a high number of confirmed COVID inpatient admissions—yet these top-ups were delivered from the overall Provider Relief Fund and administered as grants or targeted distributions rather than a standardized per-patient price paid at point of service [5]. HHS’s broad statutory discretion under the CARES appropriation meant the agency could use grants, targeted payouts, or other mechanisms to address COVID-related expenses and lost revenue [2].
5. Why the distinction matters: grants vs. per-patient payments change incentives and transparency
Grants that offset lost revenue or reimburse broad categories of COVID expenses (PPE, testing, lost elective revenue) are administratively flexible but can blur transparency about exactly how much was paid per COVID case, whereas explicit per-patient fees would tie dollars directly to documented clinical encounters; CARES generally pursued the former approach while supplementing it with a narrowly targeted Medicare add‑on and expedited payment options [1] [2]. Observers and some providers argued the grant-heavy model was necessary for speed and breadth, while critics noted that revenue-based formulas and large general distributions advantaged bigger systems [4] [5].
6. Limits of reporting and outstanding changes
Congressional language and HHS implementation gave the secretary wide authority to distribute funds “through grants or otherwise,” and reporting shows HHS used many different distribution streams and formulas, but available sources do not fully reconcile every payment to a precise per-patient dollar figure across all programs; therefore, while it is clear hospitals received large grants and some increased Medicare per-patient rates for COVID inpatients, comprehensive micro-level per-case accounting across all CARES mechanisms is not fully documented in the cited sources [2] [7] [1].