June 9 (Reuters) - The U.S. Department of Health and Human Services (HHS) said on Tuesday it would distribute about $25 billion to hospitals that have not previously received relief funds as they grapple with a rise in COVID-19 cases.
The agency said it would provide about $15 billion of the total to hospitals serving patients covered by federal Medicaid program for low-income individuals and children's health insurance program, and $10 billion to safety net hospitals that treat patients regardless of their insurance status.
The U.S. government has earmarked $175 billion for hospitals and medical providers to meet the increased expenses from rising COVID-19 cases and cover lost revenues due to suspension of medical procedures and routine visits.
The largest for-profit U.S. hospital chains such as HCA Healthcare Inc and Tenet Healthcare Corp appear to be benefiting disproportionately from the relief funds, while smaller hospitals struggle to stay afloat as they await aid, Reuters reported on Tuesday. (https://reut.rs/2ML12i4)
The latest funding would include hospitals that did not receive aid from the government's initial payout of $50 billion, the agency said.
"HHS is using funds from Congress, secured by President Trump, to provide new targeted help for America's safety-net providers and clinicians who treat millions of Medicaid beneficiaries," HHS Secretary Alex Azar said in a statement.
HHS has been under media scrutiny for its prior relief fund allocation and the bar has moved higher on the new distributions, wrote Stephens analyst Scott Fidel.
Safety net hospitals will receive between $5 million and $50 million, which will be sent directly to the hospitals via direct deposit. The fund distribution would occur this week, according to the agency.
(Reporting by Saumya Sibi Joseph in Bengaluru; Editing by Shinjini Ganguli)