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CARES Act Funding for Rural Hospital Coronavirus Responses

May 8, 2020

The Coronavirus Aid, Relief and Economic Security Act (CARES Act) appropriated funding to the Health Resources and Services Administration’s (HRSA) Federal Office of Rural Health Policy to assist rural hospitals with their responses to the COVID-19 pandemic.  This funding will be administered and provided through the Small Rural Hospital Improvement Program (SHIP) in the form of grants.  In Michigan, the Michigan Center for Rural Health administers these grants, which are available to qualifying hospitals. Hospitals previously eligible to receive SHIP funding are also eligible for these additional funds, which may be used to help rural hospitals prevent, prepare for, and respond to the COVID-19 pandemic. 

Most hospitals receiving these additional funds will likely receive around $70,000.  HRSA is requiring State Offices of Rural Health administering these funds (in Michigan, this is the Michigan Center for Rural Health) to submit a work plan, including a list of hospitals receiving the funding and an amount per hospital, by May 22, 2020.  Hospitals currently receiving SHIP funding receive these funds automatically.  In Michigan, hospitals should contact the Michigan Center for Rural Health with any questions on fund distribution.

Hospitals may use this special one-time allocated SHIP funding to pay various costs associated with their COVID-19 responses.  These costs may include the costs of purchasing personal protective equipment, paying for laboratory testing and purchasing equipment for COVID-19 testing, setting up or modifying existing patient in-take areas to address the need for patient isolation, and purchasing equipment to provide existing services via telehealth. 

Hospitals may also use this funding to pay personnel hazard pay for treating COVID-19 patients as long as the hazard pay is consistent with the hospital’s policies for unexpected or extraordinary circumstances when the hospital receives external funding.  Notably, hospitals cannot use this funding for new construction that expands a facility’s square feet, external building improvements, installing permanent modular expansions, or paying for food costs other than meals provided to hospital patients as part of a treatment plan. 

Hospitals must maintain records of how they spend this additional funding to demonstrate that it was spent consistent with the funding’s guidelines.  These documentation requirements are the same as existing SHIP grant recipient requirements, and may be satisfied by invoices, receipts, and financial records.  Hospitals may seek funding for costs related to COVID-19 responses retroactive to January 20, 2020.  However, all retroactive costs are still subject to the same documentation requirements.