•Press Release COVID-19 Health and Social Programs United States
Washington DC — The pandemic’s early stress on the health care system tested the government’s readiness to mitigate harm during a public health crisis. Emergency federal aid to health care providers and hospitals is a prime example of how well-intentioned policies can be derailed in implementation. The CARES Act provides several lessons for distributing future emergency federal aid equitably.
A report published today by the Center for Economic and Policy Research (CEPR) reveals hidden inequities built into the initial CARES Act. Curbing Inequities in the Distribution of Emergency Relief: Lessons from the CARES Act in Health Care, by CEPR’s Eileen Appelbaum and Cornell University’s Rosemary Batt, examines the inequities within the initial CARES Act allocation formulas, how the rules evolved, and offers lessons to craft equitable emergency aid policies in the future.
Specifically, one of the report’s recommendations is to audit financial statements of hospitals and other health care providers with gross revenues above a threshold so regulators can better identify fraudulent use of bailout funds.
The timeliness of the report’s recommendations was made clear in yesterday’s State of the Union address. President Biden announced plans to expand the Department of Justice’s COVID-19 Fraud Enforcement Task Force by appointing a Chief Prosecutor to lead teams of specialized prosecutors and agents focusing on major targets of pandemic fraud.
It is unclear whether hospitals or providers used CARES Act funds inappropriately. But the lack of adequate monitoring and auditing provisions in the initial CARES Act made it difficult for regulators to identify fraud.
“The CARES Act was an important and appropriate response to help health care providers maintain financial stability during the COVID-19 crisis,” said Appelbaum. “It was the initial implementation of the law that failed to fulfill the legislative intent.”
“By adopting the recommendations gleaned from this report, future emergency relief programs could avoid misallocation of funds and fraud,” added Batt.
In addition to the auditing recommendation, the report outlines these additional recommendations: