American Rescue Funds Soon to be Available to Struggling Hospitals

September 14, 2022

By Amie K. Wilcox

Arkansas hospitals will soon have the opportunity to apply for additional funding to offset the continued financial strain caused by the Covid-19 pandemic.  Arkansas’ American Rescue Plan steering committee recently approved the Arkansas Department of Human Services’ proposal to use $60 million in federal American Rescue Plan funds as a lifeline for hospitals in immediate jeopardy of closure. Industry leaders are hopeful these funds will assist the most vulnerable struggling hospitals in danger of closing who continue to face increased costs and labor shortage.  

The Department does still need approval from the state Legislative Council to spend these federal funds. If ultimately approved, applicant hospitals must meet the following eligibility criteria:

  • Be deemed in immediate jeopardy of closure by showing insufficient assets cover liabilities;
  • Show less than 90 days of cash on hand or an operating margin of less than minus 10% in the first quarter or second quarter of calendar year 2022;
  • Be licensed as a general hospital and participate in the Arkansas Medicaid program;
  • Be an independent hospital (not part of a hospital system, whether for profit or nonprofit); and
  • Be located in a county with a population of less than 50,000 people. 

Eligible hospitals would be able to apply for up to three months’ worth of payroll expenses and contract labor not to exceed $10 million per hospital, which will need to be supported by three months’ worth of expense documentation. Any awarded funds would be required to be used to recruit or retain health care staff and contract labor, and not used for indirect costs for administrative, management and financial management personnel. Notably, Critical Access Hospitals have been excluded from this funding.

The Department will process and grant applications in the order they are received until the funding is expended. Hospitals who meet eligibility criteria should prepare their materials in order to submit their applications as soon as possible after the Department begins receiving applications, at a date not yet announced. 

We will continue to monitor this program for developments.