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HHS Begins Immediate Delivery of Initial $30 Billion of CARES Act Provider Relief Funding

4/14/20 – Dave Macke

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On Friday, April 10, 2020, the Department of Health and Human Services (HHS) began the delivery of the initial funding of the CARES Act Provider Relief Fund, in response to the COVID-19 crisis.  This $30 billion installment is the first allotment of the $100 Billion that was appropriated by the CARES Act.  The purpose of the funds is to support healthcare related expenses or lost revenues attributable to the coronavirus and ensure that Americans get the testing and treatments they need. 

This initial amount of funds was distributed on Friday, April 10.  As reported by Secretary of HHS, Alex Azar, via Twitter on Friday, $26 Billion of the $30 billion was direct deposited into provider bank accounts.  The initial $30 Billion basically goes to all providers, with the remaining $4 Billion of this first allotment being distributed over the next few weeks.  As reported by HHS, the remaining $70 billion will be targeted to providers in areas particularly impacted by 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. 

The amount of a provider share is based on 2019 Medicare FFS payments, excluding Medicare Advantage.  The total of Medicare FFS payments was $484,000,000,000 in 2019.  The individual provider share is based on the proportion of the provider payments as a percentage of the $484 Billion multiplied by $30 Billion.  For example, a provider with $121,000,000 payments in 2019:

$121,000,000 / $484,000,000,000 x $30,000,000,000  = $7,500,000

Another way to calculate your amount is to take your 2019 Medicare payments and multiply by 6.1983% ($30 Billion divided by $484 Billion).

The automatic payments will come to providers via Optum Bank with “HHSPAYMENT” as the description.

These are relief payments to providers and not loans to healthcare providers, and will not to be repaid.  This is where it is different from the CMS Accelerated and Advance Payment Program.    

Initially these funds appear to be a simple payment to providers with no strings attached.  However, upon further review of the Terms and Conditions, there are definite strings attached.  Providers will be required to sign and submit an attestation within 30 days of receiving the funds, agreeing to the Terms and Conditions.   If a provider does not want to comply with the Terms and Conditions, they must contact HHS within 30 days and return the funds. 

As part of the Terms and Conditions, a provider must do the following…

The Recipient certifies that it billed Medicare in 2019; currently provides diagnoses, testing, or care for individuals with possible or actual cases of COVID-19; is not currently terminated from participation in Medicare; is not currently excluded from participation in Medicare, Medicaid, and other Federal health care programs; and does not currently have Medicare billing privileges revoked.

The Recipient certifies that the Payment will only be used to prevent, prepare for, and respond to coronavirus, and shall reimburse the Recipient only for health care related expenses or lost revenues that are attributable to coronavirus.        

The Recipient certifies that it 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.

The Recipient shall submit reports as the Secretary determines are needed to ensure compliance with conditions that are imposed on this Payment, and such reports shall be in such form, with such content, as specified by the Secretary in future program instructions directed to all Recipients.

Accordingly, for all care for a possible or actual case of COVID-19, Recipient certifies that it will not seek to collect from the patient out-of-pocket expenses in an amount greater than what the patient would have otherwise been required to pay if the care had been provided by an in-network Recipient.

Providers will need to keep detailed accounting records on the uses of the funds for allowable purposes and submit a report quarterly to the Secretary of HHHS.  This applies if a provider received more than $150,000.  We recommend that providers set up a separate liability account in their financial statements called:  “CARES Act Provider Relief Fund”.  The funds should be recorded there until such time that they can be recognized as income.   HHS not has published detailed guidelines on these reporting requirements.

 

The following links offer additional information on the CARES Act Provider Relief Funding:

HHS to Begin Immediate Delivery of Initial $30 Billion of CARES Act Provider Relief Funding

https://www.hhs.gov/about/news/2020/04/10/hhs-to-begin-immediate-delivery-of-initial-30-billion-of-cares-act-provider-relief-funding.html

CARES Act Provider Relief Fund

https://www.hhs.gov/provider-relief/index.html

CARES Act Relief Fund Payment Terms and Conditions

https://www.hhs.gov/sites/default/files/relief-fund-payment-terms-and-conditions-04092020.pdf


For any questions related to the CARES Act Provider Relief Funding, or general guidance related to Medicare and Medicaid Cost Reporting or Reimbursement Services, please contact VonLehman’s Healthcare Reimbursement expert, Dave Macke, at dmacke@vlcpa.com or 800.887.0437.