Federal Relief for Healthcare Providers
April 24, 2020
By: Willard L. Boyd III, Jason L. Giles, Dustin J. Miller
The Coronavirus Aid, Relief, and Economic Security (CARES) Act included an appropriation of $100 billion into the Public Health and Social Services Emergency Fund (the CARES Act Provider Relief Fund) for relief funding for healthcare providers, and the Paycheck Protection Program and Healthcare Enhancement Act passed on April 23rd included an additional $75 billion to this Emergency Fund.
The initial payments from the CARES Act Provider Relief Fund began April 10 and allocated $30 billion to healthcare providers based upon their 2019 Medicare reimbursements. A second payment is scheduled to begin April 24 that takes into account non-Medicare revenues for healthcare providers. The end result is that the cumulative $50 billion is allocated proportionately to 2018 revenue for healthcare providers. Both payments require healthcare providers to sign an attestation confirming that they have received the funds and agree to the Terms and Conditions for the program.
Healthcare providers should review the Terms and Conditions carefully to ensure that they are eligible for the funds and are spending the funds appropriately. We recommend taking care in tracking and allocating expenses to these payments, until further guidance comes from HHS. At some point, certain payments will be audited so usage should be documented and supported.
- Create a separate account for segregation of the payments so that expenditures are tracked. This includes keeping expenses related to the specific Taxpayer Identification Numbers (TIN) attributable to only authorized COVID-19 expenses for that TIN.
- If you are not currently providing services to cases of COVID-19, consider holding the funds until HHS provides additional guidance on their eligible uses.
- If you are providing services to cases of COVID-19, develop a system to track general and specific expenses for treatment of these patients.
- General: Develop a plan to allocate a reasonable percentage of general expenses, such as mortgage payments, based upon the percentage of COVID-19 cases against all patient care. It would be prudent to also segregate COVID-19 cases that are funded versus uninsured/unreimbursed.
- Specific: Track all specific increases in costs that are clearly tracked back to the COVID-19 pandemic. Examples could include personal protective equipment, staffing changes, physical location changes or outside consultants who provide guidance on addressing COVID-19.
- All Cases: Implement procedures to ensure that costs are allowed under HHS rules in order to demonstrate effective control over these payments. A provider must be able to provide accounting that they are utilized only for authorized purposes. This includes adopting financial management standards according to 45 CFR § 75.302 and written procedures for determining authorized costs in accordance with Title 45, Chapter A, Part 75, Subpart E “Cost Principles” of the CFR.
- Develop a system to track revenue losses attributable to COVID-19 operations and restrictions. Consider looking back to previous fiscal years to further justify these revenue losses.
These funds provide welcome relief, but impose conditions and raise additional questions about how to access the additional $125 billion. It is extremely important to understand the terms of these payments and to develop a system for their usage. We continue to monitor HHS’s guidance on these initial payments and future funding opportunities from the Emergency Fund.
Please contact your Nyemaster Goode attorney for the most up to date information on the CARES Act Provider Relief Find.
Additional CARES Act Coverage:
- CONGRESS INCREASES APPROPRIATIONS TO CARES ACT PROGRAMS
- CARES ACT ESTABLISHES PAYCHECK PROTECTION PROGRAM
- HOW TO APPLY FOR A PAYCHECK PROTECTION PROGRAM LOAN
- 7 FAQS ON UPDATED GUIDANCE TO PAYCHECK PROTECTION PROGRAM
- PPP LOAN FORGIVENESS: AN OVERVIEW
- BEST PRACTICES TO MAXIMIZE PAYCHECK PROTECTION PROGRAM LOAN FORGIVENESS
- FED LAUNCHES MAIN STREET LENDING PROGRAMS FOR SMALL AND MID-SIZED BUSINESSES
- EXPANSION OF OTHER LOANS PROGRAMS
- NEW AND MODIFIED TAX PROGRAMS UNDER CARES ACT
- CARES ACT: EMPLOYEE BENEFIT PROVISIONS
- WHAT CARES ACT MEANS FOR HIGHER EDUCATION INSTITUTIONS
- CARES ACT PROVIDER RELIEF FUND
- ADDITIONAL DISTRIBUTION FROM CARES ACT PROVIDER RELIEF FUND
- CARES ACT: MORE THAN STIMULUS MONEY
- CARES ACT PROVIDES INCREASED OPPORTUNITIES FOR INDIVIDUALS TO DEDUCT CHARITABLE CONTRIBUTIONS
- MEDICARE ACCELERATED AND ADVANCE PAYMENT PROGRAM