Hospital Giant HCA To Return $6 Billion In CARES Act Money
Nashville headquarters of Hospital Corporation of America, one of the nation’s largest hospital … [+]
The large hospital operator HCA Healthcare Thursday said it will “return, or repay early” about $6 billion in federal stimulus money from the Coronavirus Aid, Relief, and Economic Security Act, known as CARES.
HCA, one of the nation’s biggest hospital operators, has been performing well financially and earlier this year reported a profit of more than $800 million in its second quarter thanks to CARES Act funds.
The CARES Act was designed to provide relief to providers of medical care who gain reimbursement even if patients have no health insurance coverage. Congress said the money can be used for costs related to treating Covid-19 patients or providers can use it to reimburse for lost revenue related to the pandemic.
In HCA’s case, the hospital operator said it received $1.6 billion in so-called “provider relief fund distributions” and another $4.4 billion in accelerated payments from the Medicare health insurance program for elderly Americans.
But HCA chief executive officer Sam Hazen said Thursday “the initial immediacy of the emergency has passed” so the operator of more than 180 hospitals is ready to give the money back to the government.
“With more information, and more experience managing our operations during the pandemic, we believe returning these taxpayer dollars is appropriate and the socially responsible thing to do,” Hazen said. “We greatly appreciate the CARES Act funding and the policymakers who fought hard to ensure hospitals would have the essential resources during the pandemic.”
HCA in July said it was seeing an increasing demand for elective surgeries that were cancelled or postponed as inpatient facilities across the country freed up space for patients infected with Covid-19. HCA owns and operates 185 hospitals and about 2,000 sites of care that includes surgery centers, free standing emergency rooms, urgent care centers and physician clinics in more than 20 U.S. states.
Because HCA is investor-owned and publicly-traded, it has to disclose its financials quarterly. Most hospitals are tax-exempt and considered nonprofit and therefore don’t regularly disclose their financials as regularly or in a predictable and timely fashion but analysts have said big hospital operators across the country are doing well and making money off of the CARES Act funds.
In its third quarter, HCA said it anticipates “income before income taxes” of $950 million compared to $979 million in the third quarter of last year. “Results for the third quarter of 2020 include a reversal of $822 million in government stimulus income recorded in the second quarter of 2020 related to general distribution funds received from the Provider Relief Fund established by the CARES Act,” HCA said.
HCA said third quarter revenues will be about $13.3 billion compared to $12.694 billion in the third quarter of 2019. HCA said it will report its “complete financial and operating results” for the third quarter on October 26.
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