HHS will redistribute provider grant funds that insurers and other entities have returned to the department in future funding tranches, an agency spokesperson said.

Several insurers have said they received and chose to return unsolicited payments from the $30 billion that the HHS sent out based on Medicare fee-for-service reimbursement. The widespread reduction in doctors’ visits and elective procedures amid the COVID-19 pandemic has drained providers of revenue but has so far benefited insurers’ bottom lines. Large, publicly traded insurers don’t expect the pandemic to negatively impact their 2020 earnings.

It’s unclear how much total money has been returned to HHS.

UnitedHealth Group told Modern Healthcare it received and returned $49 million, while Cigna Corp. said in financial disclosures that it returned $41 million. CVS Health, which owns insurer Aetna, received and returned $43 million in a letter first reported by Business Insider.

Humana confirmed to Modern Healthcare that it received a “small amount” of provider relief grants but returned the funds. Centene Corp. also said it gave back all aid funds its provider organizations received, but did not disclose the amount.

The returned funds haven’t made their way back to providers yet, even though Medicaid providers including some pediatricians and OB-GYN practices haven’t gotten any of the funds.

“HHS is working to maximize the Provider Relief Fund to support healthcare providers fighting the COVID-19 pandemic and plans to re-disburse returned funds in future Provider Relief Fund distributions,” an HHS spokesperson said.

The two-part $50 billion distribution from the Coronavirus Aid, Relief, and Economic Security Act’s provider relief fund may have overpaid some providers, but HHS has indicated they won’t claw back the money as long as providers’ lost revenue and expenses are greater than the grant they received.

Healthcare policy observers have noted that the funds went out much faster than is regular practice in Washington. HHS’ Office of the Inspector General announced an audit of the $50 billion distribution.

As the distribution was a set amount of money, every dollar that went to a less-needy recipient was one that hasn’t yet gone to healthcare providers facing declining patient volume and revenue. RSM US Partner Richard Kes said many hospitals had strong balance sheets heading into the pandemic, but the grants helped hospitals weather the storm longer.

“The longer it takes for HHS to take money and redistribute it to traditional providers, the longer they have to wait in the wind to try to stay afloat,” Kes said.

Other entities have also returned funds. Some providers that are closed have worked with HHS to return funds. The department quietly clarified in guidance documents on Tuesday that closed providers must return grants they receive.

Walmart returned $12.6 million, Politico first reported, and DaVita CEO Javier Rodriguez said on a recent earnings call that the company would return $240 million to HHS. Some providers who do not wish to abide by the terms and conditions of the grants can choose to return the money, but they have to decide within 45 days of receiving the payment.

Post-acute care company Encompass Health also said at the UBS Virtual Global Healthcare Conference that it will return $237 million it received from distribution over compliance concerns with the terms and conditions.

HHS has begun publicly publishing the names of providers that have accepted grant funds.

Shelby Livingston contributed to this report.

Source: HHS will redistribute provider grant funds returned by insurers