Panel approves $6.3M in pandemic relief for rural Arkansas hospitals, totaling 13 aided facilities

Three more rural Arkansas hospitals are set to receive a total of more than $6.3 million in federal COVID-19 relief funds after state lawmakers gave preliminary approval Tuesday.

The full Arkansas Legislative Council on Friday will vote on whether to disburse the funds from the American Rescue Plan Act (ARPA) of 2021, aimed at covering costs incurred during the pandemic. Arkansas received an initial pot of more than $1.5 billion for lawmakers to distribute, and $60 million was set aside in August 2022 as emergency relief for struggling rural hospitals.

The Legislative Council’s Performance Evaluation and Expenditure Review subcommittee approved the following awards on Tuesday with no dissent or discussion:

• $1,549,573 to DeWitt Hospital and Nursing Home
• $3,441,839 to Chicot Memorial Medical Center in Lake Village
• $1,368,582 to North Arkansas Regional Medical Center in Harrison

The three hospitals are among 18 that the consulting firm Alvarez and Marsal evaluated to determine whether they are eligible for ARPA funds. The state hired the firm to help legislators decide how to prioritize hospitals’ requests for the dwindling supply of federal pandemic relief funds.

North Arkansas Regional cited changes to its workforce as a reason for requesting financial aid. The hospital reduced its contract labor by 40% per hour, but it has still seen a net increase in supply and labor costs and a net decrease in revenue and reimbursement, according to the consultant evaluations provided to lawmakers.

Alvarez and Marsal evaluated North Arkansas Regional’s finances from September 2022 to February 2023 and saw a 9% decrease in operating revenues in the span of a year, according to evaluation documents.

Meanwhile, Chicot Memorial Medical Center “has had to make substantial investments in maintaining and attracting staff” since most of its employees do not live in Lake Village, and the declining population of the Delta region has decreased the hospital’s patient volume and associated revenues, according to its evaluation.

DeWitt Hospital had 52 days of cash on hand in February and is also facing low patient volumes while struggling to recruit and retain staff, according to its evaluation. The hospitals in both Lake Village and DeWitt also need major physical repairs.

Past awards

If the three requests are approved Friday, the state will have distributed roughly $46 million of the $60 million in ARPA funds set aside in August 2022, and the number of aided rural hospitals will reach 13 of the 18 evaluated.

In September 2022, the Legislative Council referred North Arkansas Regional Medical Center’s first request for ARPA funds back to the PEER subcommittee. Lawmakers said they did not believe that the hospital’s financial situation was dire enough to warrant the requested $10 million in federal aid, according to the Arkansas Democrat-Gazette.

At the same meeting, the Legislative Council directed $6 million to Ouachita County Medical Center, the first hospital to receive a portion of the reserved $60 million. Administrators said the Camden hospital had roughly five days of cash on hand at the time.

Southwest Arkansas hospital set to face audit over its use of American Rescue Plan funds

Drew Memorial Health System in Monticello received $5 million in June of this year, and eight more hospitals have since received ARPA funds, four in October and four in November.

Additionally, Sevier County Medical Center received $6.5 million in December 2022, shortly before it opened in De Queen, from a different subset of ARPA funds. It was not one of the 18 hospitals Alvarez and Marsal evaluated.

Last week, lawmakers authorized an audit into the hospital’s use of ARPA funds after Sen. Jimmy Hickey, R-Texarkana, whose district includes Sevier County, said he had heard concerns that the hospital has been “delinquent” in some of its non-ARPA financial responsibilities.