HHS Announces $175 Million in Grant Opportunities for States to Assist Health Care Providers in the Gulf Coast Region

Thursday, Jan. 18, 2007 - HHS Secretary Mike Leavitt has announced the availability of $175 million in grant funds to help hospitals and health care providers that are suffering economic pressure as a result of Hurricane Katrina. These funds are being made available to the states of Alabama, Louisiana and Mississippi, for acute care hospitals and skilled nursing facilities (SNFs) which face financial pressures as a result of changing wage rates that have not yet been reflected or adjusted for in Medicare payment methodologies.

“Since Hurricane Katrina, providers’ in the Gulf Coast have experienced difficulty hiring and retaining staff,” Secretary Leavitt said. “Changing wage rates have impacted health care provider’s ability to attract potential workers. These grants will help hospitals and skilled nursing facilities respond to that pressure, and strengthen access to health care services in the Gulf Coast region.”

Of the total amount, $160 million is available to acute care hospitals and SNFs in the three states. Based on each eligible hospital and SNF’s share of total Medicare payments under a prospective payment system for inpatient care, the Centers for Medicare & Medicaid Services (CMS) will allocate funds in the following proportions and amounts: 45 percent, $71.6 million for Louisiana facilities; 38 percent, $60.5 million for Mississippi facilities; and 17 percent, $27.8 million for Alabama facilities. Funding is available to hospitals and SNFs in counties/parishes designated by the Federal Emergency Management Agency to receive both individual and public assistance. As part of the grant process, the three states must submit applications to CMS.

In addition, the Secretary established a $15 million grant for the State of Louisiana to use for the greater New Orleans area to help the region attract doctors and other health care providers. According to the Louisiana Health Care Redesign Collaborative, approximately 50 percent of the physicians who worked in the region before Katrina are no longer practicing there, leaving a shortage of doctors. The $15 million grant can be used to recruit physicians, dentists, psychiatrists, registered nurses and licensed professional health care staff. Louisiana has flexibility in determining the type and scope of recruitment activities, but these efforts can include income guarantees, annual medical malpractice payment relief, loan repayments and incentive payments, such as relocation expenses and sign-on bonuses.

The Deficit Reduction Act of 2005 provided funding for the restoration of health care in Hurricane Katrina impacted communities.

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