Biden-Harris Administration Begins Distributing American Rescue Plan Rural Funding to Support Providers Impacted by Pandemic

Today, the U.S. Department of Health and Human Services (HHS), through the Health Resources and Services Administration (HRSA), began distributing $7.5 billion in American Rescue Plan (ARP) Rural payments to providers and suppliers who serve rural Medicaid, Children's Health Insurance Program (CHIP), and Medicare beneficiaries. The Biden-Harris Administration is committed to providing much-needed relief to rural providers who historically operate on thin margins and have had their financial challenges further exacerbated during the pandemic. The average payment being announced today is approximately $170,700, with payments ranging from $500 to approximately $43 million. More than 40,000 providers in all 50 states, Washington, D.C., and six territories will receive ARP Rural payments.

“Health care providers in rural communities have been hit hard by the COVID-19 pandemic, and they continue to experience significant financial hardships,” said HHS Secretary Xavier Becerra. “The infusion of these funds will be critical to ensuring rural communities maintain access to high-quality health care and addressing urgent needs like workforce recruitment and retention.”

Rural providers play an integral role in the Administration’s focus on addressing health equity. Research has found that 47 percent of rural providers were operating in the red pre-pandemic, and this Administration has heard from providers on the ground that the pandemic worsened this reality. To help mitigate some of these pandemic-related financial losses, providers were invited to begin applying for this ARP Rural relief funding starting September 29, 2021 and asked to complete their applications by November 3, 2021. In just three weeks, HRSA processed nearly 96 percent of the more than 55,000 ARP Rural applications submitted. Many ARP Rural payment recipients will also be eligible for additional funding through the $17 billion Provider Relief Fund (PRF) Phase 4 opportunity that was also made available during the same time period. Providers could apply for both opportunities through a single application.

To streamline the application and payment process as much as possible, ARP Rural payments are based on Medicare, Medicaid, and CHIP claims for services to rural beneficiaries from January 1, 2019 through September 30, 2020. This period was chosen as it represents the most recent comprehensive data available to HHS and takes into account both pre-pandemic and pandemic operations. Rural providers serve a disproportionate number of Medicaid and CHIP patients who often have more complex medical needs. To provide equitable relief to these providers, ARP Rural payment calculations were generally based on Medicare reimbursement rates, regardless of whether the service was provided to a Medicare, Medicaid, or CHIP patient. Every eligible provider that serves at least one rural Medicare, Medicaid, or CHIP beneficiary will receive funding.

This funding will help health care providers keep their doors open, address workforce challenges, and make up for the lost revenues and increased expenses caused by the pandemic. Specifically, providers can use these funds for salaries, recruitment, or retention; supplies such as N95 or surgical masks; equipment like ventilators or improved filtration systems; capital investments; information technology; and other expenses related to prevent, prepare for, or respond to COVID-19. In the coming weeks, HHS plans to announce the first wave of PRF Phase 4 payments, and will continue processing the remaining ARP Rural applications, some of which require more extensive review to ensure program integrity.

"HRSA has a deep and longstanding commitment to supporting health providers in rural communities," said HRSA Acting Administrator Diana Espinosa. “The billions of dollars of funding we are distributing today will provide vital support to rural communities on the front lines of this pandemic.”

A state-by-state breakdown of the ARP Rural payments is available at: https://www.hrsa.gov/provider-relief/data/targeted-distribution/arp-rural

A public dataset of providers who have received ARP payments is available at: https://data.cdc.gov/dataset/American-Rescue-Plan-ARP-Rural-Payments/8v6a-z6zq

For additional information, visit https://www.hrsa.gov/provider-relief.