State panel OKs use of $60M in federal funds to aid hospitals at risk of closing

State panel OKs use of $60M in federal funds to aid hospitals at risk of closing

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  • August 31, 2022
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A state panel on Thursday endorsed the state Department of Human Services’ request to use $60 million in federal American Rescue Plan funds to assist hospitals in immediate jeopardy of closure as a result of the extraordinary circumstances caused by covid-19 public health emergency.

In a voice vote with no audible dissenters, Arkansas’ 15-member American Rescue Plan steering committee, appointed by Gov. Asa Hutchinson, recommended approval of the state Department of Human Services’ request.

In its written request, the department said hospitals continue to experience severe financial strains due to the economic impacts of the pandemic.

Increased costs and labor shortages have resulted in fewer revenues for the hospitals and this means that several hospitals across the state, particularly those that serve rural populations, are at immediate risk of closure, the department said.

In addition, the department said it is working with the Arkansas Hospital Association to undergo a rate review for Arkansas’ inpatient and outpatient hospital rates as well as to examine policies to help address the strains placed on hospitals through the pandemic.

In other action on health care-related requests for funds, the steering committee recommended approval of the Department of Human Services’ request for $10 million in federal American Rescue Plan funds for services to benefit rural hospitals through the Arkansas Rural Health Partnership.

The department said this assistance would allow rural hospitals to respond to the covid-19 public health emergency and its negative impacts by addressing critical needs within these facilities and strengthening their operations through initiatives that will ensure that they continue to provide needed healthcare services.

The steering committee also recommended approval of the state Department of Human Services’ request for $5 million in federal American Rescue Plan funds to support the training and certification of teams employed by behavioral health agencies in evidence-based models, including an assertive community treatment model for adults with the highest mental health needs and an intensive in-home support model to serve a similar population of children and youth in Arkansas who are involved with or at risk of involvement with the child welfare or juvenile justice system.

The next hurdle for these requests will be state lawmakers.

The Legislative Council must approve the department’s requests for authority to spend these American Rescue Plan funds.

In May of 2021, Hutchinson appointed the 15-member steering committee, made up of nine administration officials and six state lawmakers, to make recommendations on the use of $1.57 billion in State Fiscal Recovery Funds under the American Rescue Plan and $158 million in Capital Projects Funds under the American Rescue Plan.

Of the $1.57 billion in State Fiscal Recovery Funds, Department of Finance and Administration spokesman Scott Hardin said Tuesday that $876.4 million remains unallocated.

“However, if we subtract the total amount approved at last week’s meeting [$300 million for water/wastewater, etc], the unallocated amount is $567,377,245.28,” he added. The Legislative Council is expected to consider granting spending authority for using $300 million in federal American Rescue Plan funds for water, wastewater and irrigation projects next month.

In March of 2021, President Joe Biden signed the $1.9 trillion American Rescue Plan Act that’s designed to help the United States recover from the economic and health effects of the covid-19 pandemic.

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