CNBCHHS threatens to withhold federal funding from hospitals that fail to report coronavirus data

October 6, 20200

The Department of Health and Human Services is threatening to withhold U.S. funding from hospitals that fail to comply with federal requirements on reporting data about Covid-19 and influenza patients, Centers for Medicare and Medicaid Services Administrator Seema Verma announced Tuesday.

Verma said on a conference call with reporters that hospitals will be given 14 weeks to comply with the requirements before enforcement is implemented. She said federal officials will work with hospitals over that time to help bring them into compliance.

“Because this requirement is in the Medicare conditions of participation, non-compliance could result in termination from both Medicare and Medicaid, meaning the hospital would not receive reimbursement from these programs,” Verma said. “We’re going to do everything that we can to facilitate reporting.”

The withholding of Medicare and Medicaid funding would be a major blow to almost any hospital. But Dr. Deborah Birx, the White House coronavirus task force coordinator, emphasized that the data is “really critical” to guide the U.S. response to the pandemic.

Among the data requested from hospitals, is the number of Covid-19 patients in each hospital and availability of medical equipment like ventilators and protective gowns for employees. Birx announced Tuesday that HHS will now begin requiring new data from hospitals in order to better track seasonal influenza patients across the country. 

The federal government uses the data to guide potentially life-saving policy responses to the pandemic such as how best to distribute scarce supplies of the antiviral drug remdesivir, which is one of the few treatments for Covid-19.

Nancy Foster, vice president for quality and patient safety policy at the American Hospital Association, said in a phone interview with CNBC last week that withholding Medicare and Medicaid funding would be “too severe a penalty on a community.”

But she added that it’s likely just a strategy to scare hospitals into compliance, a way of “holding the hospitals’ feet to the fire, but not immediately booting them out of the Medicare and Medicaid program.”

“Losing your ability to participate in Medicare and Medicaid is a really big hammer,” said Foster, who serves on a working group of national hospital representatives that have been advising HHS’ effort to ramp up federal data collection. “It doesn’t just affect the hospitals,” she added. “It takes away that option of going to that particular hospital for Medicare and Medicaid patients.”

Verma said on the call Tuesday that CMS will send out multiple notices to hospitals that are out of compliance before making any threat of enforcement. She said there are just over 6,000 hospitals in the agency’s system that will receive notices beginning Wednesday, telling them how well they’re complying with the data reporting requirements. 

Birx said on the call that about 86% of hospitals are reporting daily through the system and about 98% are reporting at least weekly. It’s unclear what portion of hospitals are in compliance, but Dr. Janis Orlowski, chief health care officer at the Association of American Medical Colleges, estimates about 96% are reporting their Covid-19 data.

“We do have most of our hospitals that are reporting generally,” Verma said. “Not all of them are going to daily reporting so this is really to encourage them to report on a daily basis their data.”

Orlowski, who also serves on the working group, said the addition of seasonal influenza data to the reporting requirements could be a real burden on some hospitals that are already struggling to meet the requirements. She added that the rate of compliance is already high, so to make complying with the requirements a condition of participation in Medicare and Medicaid is drastic. 

“We got 96% of people reporting, and you guys are going to slap on a really draconian” measure, Orlowski said in a phone interview last week. She added, however, that hopefully HHS would include a long enforcement period before action was taken. Nonetheless, she said she and other hospital representatives have voiced opposition to the move. 

“We have had conversations with the administration, basically saying, ‘you got to be kidding me. You know, we’re working with you collaboratively and you guys are going to slap a condition of participation on?'” she said.

Birx’s working group of national hospital representatives, which typically meets every Thursday, has not met in about three weeks, Orlowski and Foster said.

In late July, hospitals across the country were left scrambling after HHS abruptly told them to stop reporting their data to the U.S. Centers for Disease Control and Prevention’s long-standing National Healthcare Safety Network. Instead, hospitals were instructed to report the information to HHS through a new portal. 

At the time, HHS tied hospitals’ cooperation with the reporting to the distribution of remdesivir, but the decision left many rural hospitals in the dark since they relied on the CDC to assemble and share that information since their states don’t collect the data themselves. 

One of the most difficult requirements for some, especially smaller, hospitals is that they are required to report data every day, including the weekend. However, the new guidance from HHS says that hospitals that don’t have weekend staffing can submit their weekend data by end of day Monday. 

“At the end of the day this is about patients,” Verma told reporters on the call. “We want to make sure the hospitals have supplies that they need, so all of this reporting just ensures that frontline health-care workers and patients have the supplies and the treatments that they need.” 

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