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State panel backs funds for hospitals' virus costs

by Michael R. Wickline | June 4, 2020 at 7:24 a.m.
The Arkansas Department of Human Services at Donaghey Plaza in Little Rock is shown in this April 28, 2019 file photo.

A panel appointed by Gov. Asa Hutchinson to recommend the state's best uses of $1.25 billion in federal coronavirus relief funds on Wednesday endorsed the state Department of Human Services' request for $109.6 million to reimburse Arkansas hospitals for covid-19 expenses.

The CARES Act Steering Committee also recommended the Republican governor approve the state Department of Finance and Administration's request for $5 million to reimburse state agencies for their purchases of personal protective equipment and the Department of Corrections' request for $507,900 for incentive payments for workers caring for covid-19 inmates.

The committee also recommended setting aside $250 million in reserve funds to be used after Oct. 1.

The steering committee is made up of eight of Hutchinson's department directors and deputy chief of staff for external operations Bill Gossage, along with three senators and three representatives. The governor decides whether to implement the recommendations of the 15-member committee. The Legislative Council often has to sign off on granting additional spending authority for state agencies to spend these federal funds, so it has the power of the purse to influence how the money ultimately is spent.

[CORONAVIRUS: Click here for our complete coverage »]

At the outset of Wednesday's meeting, Finance and Administration Secretary Larry Walther, who serves on the committee, reported the committee already has committed $439 million in federal coronavirus relief funds to various projects so far.

Human Services Secretary Cindy Gillespie told fellow committee members that the department has worked with the Arkansas Hospital Association for several weeks to develop a proposal to tap federal coronavirus relief funds to reimburse Arkansas hospitals.

"We did not rush out of the gate with a proposal around the needs of hospitals in the state, related to being able to respond to the pandemic ... and also waited to see what would happen with federal monies that would come down to be able to deal with some of the activities that had to take place in the emergency," she said.

"The bottom line is, the way the federal government has wound up doing the formula allocations, Arkansas has been severely disadvantaged because our bed rate is low here, which is great, but at the same time it means that other states have gotten far more money than we have got," Gillespie said.


The department's request is a focused plan designed to address specific expenses that Arkansas hospitals incurred in responding to the first months of the coronavirus pandemic and essentially covers expenses incurred between March and June 30 that are not covered by other federal or state funding sources, she said.

"If there are other revenue sources that are used by a hospital, they cannot double dip and they have to use the other federal sources before they can use these sources," Gillespie said.

Hospitals "did a great deal of conversion in order to be able both to continue the safety of patients, safety of visitors where there were visitors allowed and safety of staff and that was ... shifting to doing a lot of initial triage outside of the four walls of the hospital, changing the patterns for entry," she said.

The federal funds under this proposal may be used for costs that are attributed to activities associated with the covid-19 pandemic, including safety of patients, visitors and staff; public health response; technology improvements; education and training; readiness and preparedness; and other related incremental direct and indirect costs, according to the Department of Human Services' proposal.

To provide funding for the six allowable activities, an allotment formula has been developed using certain factors, the department's proposal states.

These factors include that the department will provide an allotment of $50,000 for critical access and specialty hospitals such as rehabilitation, psychiatric and long-term care hospitals and an allotment of $10,182 per licensed bed to each acute care hospital, excluding critical access and specialty hospitals. The payments by bed size will be based upon the state Department of Health's determination of licensed Medicare beds for each facility.

That allotment creates for each hospital a capped amount that each hospital could request from the Department of Human Services, Gillespie said. The department estimated the cost of this proposal at up to $99.6 million.

"We have tried to stage this in a way that it gives the hospitals the reimbursement they need, but also insures CARES money comes back in time to be reused this fall if it actually is not needed or other federal sources come into play," she said.

In addition, the department proposed an additional cluster payment fund of up to $10 million to be available for distribution to the hospitals that cared for covid-19 patients from March 1-June 30, to offset costs that were not fully reimbursed.

The department will provide an allotment of $25,000 for critical access and specialty hospitals that cared for covid-19 positive inpatients and an allotment of $1,400 for each licensed bed in each acute care hospital caring for positive inpatients, excluding critical access and specialty hospitals, according to the department's proposal.


Before the committee approved the finance department's request for $5 million to reimburse state agencies for their purchases of personal protective equipment, Walther noted that the committee on April 29 approved a list of personal protective equipment that, if already purchased, state agencies and higher education institutions could be reimbursed for. The committee hasn't yet recommended allocating money to the finance department to process the reimbursement requests, he said.

The finance department has received reimbursement requests totaling $3.1 million from four state departments and the University of Arkansas for Medical Sciences, with UAMS requesting $3 million of that, Walther said in a memo to committee chairwoman Elizabeth Smith, who is secretary of the state Department of Inspector General.

Walther said he may get a reimbursement request from the Department of Human Services that purchased personal protective equipment on its own to protect its workers.

He said the $5 million request from the finance department is in addition to the Department of Transformation and Shared Services' request for $3.5 million to procure personal protective equipment for the 15 executive branch agencies' employees and visitors to their offices that the committee recommended last week.


The Department of Corrections' two-pronged total request for $507,900 includes a request for $301,500 for a $500 bonus to the department's staff at the three facilities where "we had covid-19 patients," said department Secretary Wendy Kelley.

The Central Arkansas Community Correction Center had 63 inmates and 27 staff that tested positive for covid-19 and "we actually lost a staff member," Kelley said.

At the Cummins Unit, "we have had to date 963 inmates and 65 staff [test positive] with eight deaths of inmates at that facility," she said. At the Randall L. Williams Unit, "we've had 227 inmates [and] 15 staff [test positive] and one inmate death," she said.

The second prong of the department's request is for $206,400 for "our health care provider Wellpath and it's for their staff that worked at those three facilities, including staff that we were sent to work at those facilities when we short or we were attempting to do the mass testing clinic," Kelley said.

In other business, Smith reported that the committee has received a request from the Arkansas Municipal League and Association of Arkansas Counties to set aside $150 million in federal coronavirus relief funds.

"We believe we will be getting a request from higher ed ... to reopen higher ed, so kids can go back to college, so we can cover testing and social distancing and how to deal with getting colleges back in the fall," she said.

"We do need to cover broadband," Smith said. "We don't have a specific proposal yet related to broadband."

But Walther said, "I had $25 million in [federal funds set aside] for broadband."

Sen. Missy Irvin, R-Mountain View, a committee member, asked whether that $25 million for broadband includes $2 million for the rural ID broadband program or another funding source has been identified to provide $2 million for that program.

Gossage, the deputy chief of staff, said, "I think that number includes that request for $2 million."

He said $5.7 million in state funds has been set aside for broadband, "so it's really about $19.3 million for Arkansas Rural Connect, so that leaves us the additional funds."

A Section on 06/04/2020


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