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Hospitals describe steep revenue losses and uneven CARES Act distributions
Summary
Hospital association leaders told the committee hospitals spent millions on PPE and testing and recorded steep revenue declines after elective procedures were halted; CARES Act funds reached some Arkansas hospitals but distribution formulas left gaps for medium and rural providers.
Beau Ryle, president and CEO of the Arkansas Hospital Association, told the committee that hospitals across the state have incurred large expenses to respond to the pandemic and have seen sharp drops in patient volume.
Ryle said hospitals spent about $34 million in the first six weeks on PPE, testing supplies and testing sites, and estimated a revenue loss of about $270 million across that early period. He also described CARES Act distributions: so far, 70 Arkansas hospitals had received about $281 million, but he said the federal methodology rewarded larger providers and left medium and rural hospitals with inequitable support. The state'level CARES steering committee later approved $110 million for hospital COVID-related expenses.
Hospital witnesses told legislators that elective-procedure suspensions, while necessary for safety and capacity planning, removed a major revenue stream and that additional costs such as pre-procedure testing are generally not reimbursed under existing DRG arrangements for many payers. Committee members asked for more granular financial data on per-patient PPE and testing expenditures and for breakdowns of federal and state assistance by hospital size.
What's next: Hospital leaders said they will share publicly available DFA data on UAMS losses and asked the committee to consider funding gaps that remain for smaller and mid-sized hospitals.
