April 16, 2020
The recently enacted Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) provides $100 billion in relief funds to support expenses or lost revenue attributable to COVID-19 and to ensure uninsured Americans receive testing and treatment for COVID-19. On April 10, 2020, the Department of Health and Human Services (“HHS”) began automatically distributing $30 billion to eligible healthcare providers via direct deposit. This initial distribution of funds is meant to provide relief to healthcare providers in areas affected by the COVID-19 pandemic and to providers who are struggling to keep their doors open due to healthy patients delaying care and cancelling elective surgeries. These distributions are not loans, meaning healthcare providers will not have to repay any money received from these funds. That being said, healthcare providers must accept certain terms as a condition to keep funds received from the provider relief fund.
Is the provider relief fund different than CMS’ accelerated and advance payment program?
Yes. In a previous update, we discussed the Centers for Medicare & Medicaid Services’ (“CMS”) accelerated and advance payment program. Payments received under CMS’ accelerated and advance payment program are designed to help providers and suppliers maintain adequate resources to combat the COVID-19 pandemic. As opposed to the provider relief fund, payments under CMS’ accelerated and advance payment program are loans that must be repaid. For more information, please refer to our accelerated and advance payment program update, available
here
.
Who is eligible to receive payments under the provider relief fund?
Any facility or provider that received Medicare fee-for-service reimbursements in 2019 is eligible to receive payments from the initial distribution. Providers and facilities whose operations ceased as a result of the COVID-19 pandemic are still eligible to receive funds so long as diagnoses, testing or care for individuals with possible or actual cases of COVID-19 was provided. HHS has noted that it broadly views every patient as a possible case of COVID-19.
How must payments be used?
Recipients must certify that payments received under the provider relief fund will only be used to prevent, prepare for, and respond to COVID-19. Recipients of payments shall be reimbursed only for health care related expenses or lost revenues that are attributable to COVID-19.
Are there any conditions on receiving payments?
Yes. To receive funds, eligible payment recipients must:
- Agree not to seek collection of out-of-pocket payments from a COVID-19 patient that are greater than what the patient would have been required to pay if the care was provided by an in-network provider;
- Certify that they will not use the payment to reimburse expenses or losses that have been reimbursed from other sources or that other sources are obligated to reimburse;
- Submit reports as the HHS Secretary determines necessary to ensure compliance with the conditions imposed on the payments; and
- Maintain appropriate records and cost documentation, including financial management and record retention and access documentation, and other information required by future program instructions to substantiate the reimbursement of costs under this award.
As with other federal funds, the payments may not be used for abortions, and they may not pay for the salary of an individual at a rate in excess of an Executive Level II. In 2020, the salary limitation for Executive Level II is $197,300.
The complete list of statutory provisions relating to the use of provider relief funds is accessible
here
.
How are payment distributions determined and where will payments be sent?
Eligible providers will be distributed a portion of the $30 billion based upon their share of the total Medicare fee-for-service reimbursements in 2019, which was approximately $484 billion.
HHS has partnered with UnitedHealth Group to provide the initial $30 billion distribution to eligible providers. Providers will be paid via Automated Clearing House account information on file with UnitedHealth Group or with CMS. These automatic payments will come to providers via Optum Bank with “HHSPAYMENT” as the payment description. Providers who normally receive a paper check for reimbursement from CMS will receive a paper check for this payment sometime in the next few weeks. Provider relief payments are being made to providers according to tax identification number. Payments to practices that are part of a larger medical group will be sent to the medical group’s central billing office.
What must be done after payment is received?
Within 30 days of receiving this payment, providers must sign an attestation confirming receipt of the funds and agreeing to the
terms and conditions
of payment. The portal for signing the attestation will be linked
here
. If a provider receives payment and does not wish to comply with the terms and conditions, the provider must contact HHS within 30 days of receipt of the payment and remit the full payment to HHS, as instructed. Not returning payment within 30 days of receipt will be viewed as acceptance of the terms and conditions.
How will payments for the remaining $70 billion be prioritized?
The remaining $70 billion will likely be used as targeted distributions that will focus on providers in areas particularly impacted by the COVID-19 outbreak, rural providers, providers of services with lower shares of Medicare reimbursement or who predominantly serve the Medicaid population and providers requesting reimbursement for the treatment of uninsured Americans.
More information about the provider relief fund is available
here
. The entirety of the CARES Act is available
here
.
