Rural Arkansas hospitals at risk of permanently closing their doors should get short-term relief with $60 million of the state’s American Rescue Plan Act funds, a state panel unanimously recommended Wednesday.
Hospitals statewide saw less revenue over the past two years as a result of the COVID-19 pandemic, and some are in “immediate jeopardy of closing,” Department of Human Services Secretary Cindy Gillespie told the state’s 15-member American Rescue Plan Steering Committee.
The committee, appointed by Gov. Asa Hutchinson in 2021, is made up of state legislators and department secretaries.
“Most of these hospitals are in rural or smaller areas of the state, counties of less than 50,000 [people], they are not connected to large systems, and they really had a very thin margin to be able to work with as we went into the pandemic,” said Gillespie, who is a member of the committee.
“For them, getting their footing back, being able to move toward long-term sustainability is very much an issue.”
These hospitals would be able to apply for the ARPA funds to cover up to three months of labor costs, as well as payroll and hiring costs up to July 2023, Gillespie said. The facilities would submit a “sustainability plan” to DHS, explaining how they could return to financial stability, within 90 days of receiving aid.
The Arkansas Legislative Council must approve the request in order for hospitals to receive the money.
More than 50% of hospitals’ expenses pertain to staffing, and the current shortage of healthcare professionals has increased labor costs, said Jodiane Tritt, executive vice president of the Arkansas Hospital Association.
Gillespie said $60 million is not much in the grand scheme of the hospital industry, but DHS proposed this “targeted” amount in order to make “piece by piece” efforts to save rural hospitals.
The money will go first to the hospitals that have the fewest resources at their disposal, and the first round of aid will total no more than $10 million, Gillespie said.
“For a hospital to come forward and say they are in immediate jeopardy is a very big statement,” she said.
Several Arkansas hospitals received advance payments in 2020 from the federal Centers for Medicare and Medicaid Services in order to stay afloat during the pandemic, and rural hospitals with limited resources now need help returning those payments to the federal government, Tritt said.
Arkansas received $1.57 billion from the American Rescue Plan Act in 2021, and $876 million has yet to be distributed.
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