Biden administration releases $7.5 billion for rural healthcare

Healthcare organizations can use the money for salaries, equipment and other costs tied to the COVID-19 pandemic. Providers in all 50 states are receiving funds.

President Joe Biden’s administration has released $7.5 billion to help rural healthcare providers deal with the COVID-19 pandemic.

The U.S. Department of Health and Human Services said Tuesday it has begun distributing the American Rescue Plan rural payments. The government is sending the money to rural providers who serve Medicaid, Medicare and Children’s Health Insurance Program beneficiaries.

More than 40,000 providers in all 50 states are receiving rural payments from federal coronavirus relief funds. (Here’s a state-by-state breakdown of payments.)

The average payment announced is around $170,000. Payments ranged from $500 to $43 million.

“Health care providers in rural communities have been hit hard by the COVID-19 pandemic, and they continue to experience significant financial hardships,” Health and Human Services Secretary Xavier Becerra said in a statement. “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.”

Healthcare providers were invited to apply for rural relief funds Sept. 29 and had to submit their applications by Nov. 3. The health and human services department said it has processed nearly 96% of the more than 55,000 applications for aid.

Recipients can use the federal funds in a host of ways, the health department said.

Providers can use the money for salaries, including recruiting and retaining workers. They can also utilize the money to buy personal protective equipment, ventilators or better filtration systems. And providers can also invest it in other ways to prepare or respond to any influx of new COVID-19 patients.

Rural healthcare organizations serve a disproportionate number of Medicaid and CHIP patients with challenging medical needs, the administration said in its announcement of the funds.

The health department touted the money as essential in helping some rural providers keep afloat. The agency said 47% of rural healthcare providers were operating in the red before the emergence of COVID-19 and some providers have said the pandemic has only exacerbated their financial woes.

Rural healthcare providers are also still eligible for financial assistance through the Provider Relief Fund, another element of the COVID-19 relief package from the Biden administration. The Biden administration said it plans to announce the first recipients of Phase 4 of that fund in the coming weeks.

Earlier this week, the Biden administration announced it is investing $1.5 billion to expand and diversify the ranks of America's doctors.