As part of the CARES Act's Public Health and Social Services Emergency Fund (Provider Relief Funds), $100 billion was to be made available to a wide array of providers ― including public entities, Medicare- or Medicaid-enrolled suppliers and providers and for-profit entities and not-for-profit entities deemed eligible by the Secretary of Health and Human Services ― that deliver diagnoses, testing or care to individuals with possible or actual cases of COVID–19. An initial distribution of $30 billion was made starting on April 10, 2020.
On April 22, 2020, HHS provided information regarding a second distribution of the Provider Relief Funds. Pursuant to this guidance, additional Provider Relief Funds will be allocated as follows:
Additional $20 Billion to Medicare Providers Based on 2018 Net Patient Revenue
HHS has determined that $50 billion of the Provider Relief Fund will be allocated for general distribution to Medicare facilities and providers impacted by COVID-19. As noted above, $30 billion of the $100 billion has already been distributed. An additional $20 billion has now been allocated based on eligible providers' 2018 net patient revenue. Information regarding the $20 billion distribution is as follows:
- Starting April 24, 2020, some providers will automatically receive funds.
- The distribution will be calculated based on revenue data from CMS Cost Reports.
- Providers will still need to submit revenue information for verification purposes.
- Providers without adequate cost report data on file will need to submit revenue information in order obtain any additional general distribution funds.
- Payments will go out on a rolling basis as information is validated.
- Providers will need to confirm receipt of funds and accept the Terms and Conditions associated with the funds. The Terms and Conditions are discussed in more detail in our earlier client alert.
- HHS stresses that it will conduct audits and investigations to identify any fraud or misuse of funds.
- Documentation will need to be provided to show Provider Relief Funds are used for healthcare-related expenses or lost revenue attributable to coronavirus.
- As it relates to the initial $30 billion distribution, HHS has stated that: “if you ceased operation as a result of the COVID-19 pandemic, you are still eligible to receive funds so long as you provided diagnoses, testing, or care for individuals with possible or actual cases of COVID-19. Care does not have to be specific to treating COVID-19. HHS broadly views every patient as a possible case of COVID-19.”
- This language is not repeated in discussion of the distribution of the $20 billion. Absent clarification, it is unclear if this interpretation of the terms of the CARES Act would also apply to the $20 billion distribution.
$10 Billion to Hospitals in Areas Hard Hit by the COVID-19 Outbreak
- Hospitals in areas that have been most impacted by COVID-19 will have access to an additional $10 billion.
- HHS has notified hospitals that are eligible for a portion of this allocation.
- Hospitals need to apply for the funds by providing certain information via an authentication portal before 3 pm PT, Saturday, April 25. Information to be provided is:
- Tax ID number
- National Provider Identification Number
- Total number of ICU beds as of April 10, 2020
- Total number of admissions with a positive diagnosis for COVID-19 from Jan. 2, 2020 – April 10, 2020
- In assessing the amount of the distribution, HHS will take into consideration a facility’s service to low-income patients by analyzing its Medicare Disproportionate Share Hospital (DSH) Adjustment.
$10 Billion for Rural Providers
- As early as next week, money will be distributed to rural facilities and clinics.
- Payments will be distributed proportionally on the basis of operating expenses.
$400 Million for Indian Health Service
- Money will be distributed to Indian Health Service facilities as early as next week on the basis of a facility’s operating expenses.
Funding for Treatment of the Uninsured
- Any health care provider that has provided treatment for uninsured COVID-19 patients on or after Feb. 4, 2020, can request claims reimbursement.
- Reimbursement will be received based on Medicare rates
- Providers will need to:
- enroll in a provider participant program
- document patient eligibility and benefits
- submit patient information and claims
- Payment will be received via direct deposit.
- Providers can register for the program beginning April 27, 2020.
- Claims can be submitted in early May 2020.
- Provider cannot “balance bill” any patient for COVID-19-related treatment.
Skilled Nursing Facilities, Dentists, Others
- Some providers will receive additional, separate funding.
- Identified providers include skilled nursing facilities, dentists and providers that solely take Medicaid.
- No details and no amounts provided.
Additional Provider Relief Funds: $75 Billion
- On April 24, 2020, as part of the next round of stimulus payments, an additional $75 billion was approved for eligible health care providers under the same terms and requirements governing the distribution of the original $100 billion including:
- Recipient will use the payment only to prevent, prepare for and respond to coronavirus and to reimburse the provider for health care-related expenses or lost revenues attributable to coronavirus.
- Recipient 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.
- Recipient shall submit reports and maintain documentation the Secretary determines are needed to ensure compliance with conditions imposed for such payments, and such resources
- HHS shall, on a rolling basis, review applications and make payments to eligible health care providers.
- While the bill specifically provides for “applications,” based on how the initial distributions have been handled it appears any application will be kept relatively simple. Recipients are being required to provide more detailed documentation after funds are received related to actual use of the funds.
- Provider Relief Funds shall be available for building or construction of temporary structures, leasing of properties, medical supplies and equipment including PPE and testing supplies, increased workforce and trainings, emergency operation centers, retrofitting facilities and surge capacity.
- The Inspector General and Comptroller General may conduct interim audits related to the distribution of the funds and will conduct a final audit and submit a report on the audit findings no later than 3 years after the final payments are made.
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