I don’t know enough about Medicare specifically to give a super educated response, but my understanding is that hospitals receive standard Medicare payout amounts based on every billed part of the stay (room nightly cost, medicines, procedures, tests / diagnostics, and everything else). I imagine there may be regional variation on these payouts based on cost of living in a given area. I imagine a hospital stay in downtown San Francisco is a lot more than in Iuka, MS for just about any reason, just due to the higher cost of the hourly and salaried employees.
Anyway, the 20% / 40% of additional funding is based on the total roll-up cost from all those standard payouts. And I think hospitals are still losing money on every Medicare COVID patient regardless.