On Friday, May 22, the U.S. Department of Health and Human Services (HHS) issued a press release announcing that it has begun distributing nearly $4.9 billion to skilled nursing facilities (SNFs) to “support nursing homes suffering from significant expenses or lost revenue attributable to COVID-19.” This targeted distribution to SNFs is the latest in a series of allocations from the $175 billion Public Health and Social Services Emergency Fund (PHSSEF) for eligible healthcare providers under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), as supplemented by the Paycheck Protection Program and Health Care Enhancement Act (Enhancement Act).

According to HHS, the distributions to SNFs will be based on both a fixed basis and a variable basis. Specifically, each SNF will receive a fixed distribution of $50,000 plus an additional $2,500 per bed. HHS states that all certified SNFs with six or more certified beds are eligible for this targeted distribution.

HHS acknowledges that the COVID-19 pandemic has affected the viability of SNFs in a number of ways. For example, SNFs have experienced up to a 6% decline in their patient population since the beginning of 2020. Further, many SNF patients and employees have been diagnosed with COVID-19. HHS states that these additional funds may help SNFs address critical needs such as increased labor, expanded testing capacity, acquisition of personal protective equipment, and a range of other expenses directly linked to the COVID-19 pandemic.

A state-by-state breakdown of the nearly $4.9 billion distribution to SNFs may be found here.

HHS reminds that recipients must attest that they will only use the PHSSEF payments for permissible purposes, as set forth in the Terms and Conditions, and agree to comply with future government audit and reporting requirements.

The principal terms and conditions for the distributions to SNFs largely mirror those for other distributions of CARES Act provider relief funds, including those principal terms and conditions related to certification, documentation, and detailed reporting requirements. However, the following notable changes apply:

1. Recipients who retain payment for 45 days (rather than the 30 days initially used for other distributions, which was subsequently extended) without contacting HHS regarding the remittance of the payment are deemed to have accepted the Terms and Conditions.
2. While HHS has always required recipients receiving more than $150,000 total in funds under the CARES Act and other legislation providing relief for COVID-19 response and related activities to submit quarterly reporting, HHS now adds that funds received from the Enhancement Act must be included in calculating that threshold.

Interested parties should review the Terms and Conditions in detail to ensure compliance.

The distributions to SNFs are part of HHS’s stated goal to make “additional allocations” for some other providers, including dentists and providers that solely take Medicaid. We are continuing to monitor for additional guidance from HHS regarding new CARES Act allocations and their terms and conditions.