$100 Billion Emergency Fund for Providers Under the CARES Act: New Guidance and Terms & Conditions of Acceptance
On April 10, 2020, the U.S. Department of Health and Human Services (“HHS”) provided additional details regarding its plan to provide billions in relief to providers in an effort to off-set healthcare-related expenses resulting from the Coronavirus (“COVID-19”) outbreak.
Passed into law on March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act, also called the “CARES Act”, provided $100 billion in funding for the Public Health and Social Services Emergency Fund (the “Fund”). The Fund is a pre-existing resource overseen by the Office of Financial Planning & Analysis within HHS. The $100 billion added via the CARES Act was made available to qualifying healthcare providers to reimburse them for “health care related expenses or lost revenues that are attributable to [COVID-19]”. The CARES Act stipulated that the $100 billion would be made available to public entities, Medicare or Medicaid enrolled suppliers and providers and other entities as may be further specified in regulations or guidance, provided that any such provider must “provide diagnoses, testing or care for individuals with possible or actual cases of COVID-19”. Monies received from the Fund may not be used to cover expenses that have already been reimbursed through other sources or that other sources are obligated to reimburse. Little other detail regarding the funding or mechanism for disbursal was provided in the CARES Act itself.
In a new issuance on its website, found here, HHS provided additional details on the program. HHS noted that $30 billion out of the appropriated $100 billion will be distributed immediately via direct deposit, starting April 10, 2020. Further, HHS clarified that the money is “payment” and not a loan, and thus will not need to be repaid. The initial $30 billion tranche is being made available only to providers that received Medicare fee-for-service payments in 2019. The payments are being distributed according to the Taxpayer Identification Number (TIN) of the billing organization.
This initial $30 billion is being distributed based on the provider’s share of total Medicare fee-for-service reimbursements in 2019, which amounted to about $484 billion. HHS provided the following formula for providers to estimate their emergency distribution:
Divide 2019 Medicare fee-for-service (not including Medicare Advantage) payments received by $484,000,000,000, and then multiply that ratio by $30,000,000,000.
Thus, importantly, this initial $30 billion is being distributed by HHS without regard to the fact that certain areas or providers have been more financially affected by COVID-19 than others.
HHS partnered with UnitedHealth Group to distribute the funds, and the payments will come via Automated Clearing House, based on information on file with UnitedHealth Group or the Centers for Medicare & Medicaid Services (“CMS”). However, if a provider normally receives a paper check for reimbursement from CMS, the payments will be sent in the following weeks.
Importantly, as a condition to accepting the money, providers must sign an attestation agreeing to abide by the terms and conditions of the payment (the “Terms and Conditions”). A copy of the Terms and Conditions is found here. The attestation will be made available the week of April 13, 2020 and must be signed within thirty (30) days of receiving the payment.
Included in the Terms and Conditions is a requirement that the provider must not balance bill out-of-network patients “for all care for a possible or actual case of COVID-19”. Rather, out-of-network patients may only be billed at the same rates as if the care had been provided to them on an in-network basis. Additionally per the Terms and Conditions, providers must certify that payments will only be used to “prevent, prepare for, and respond” to COVID-19 and to reimburse facilities and providers only for health care related expenses or lost revenues that are attributable to COVID-19 as well as a certification that reports will be submitted (as to be determined) to ensure compliance.
For the remaining $70 billion in funding, further details are being worked out to distribute the money with a focus on providers heavily impacted by the COVID-19 outbreak, rural providers, and providers of services with lower shares of Medicare reimbursement or who predominantly serve the Medicaid population. HHS further noted that this supplemental funding would also be used to reimburse providers for COVID-19 care for uninsured Americans.
As any guidance on COVID-19 and financial assistance thereunder is rapidly evolving, please reach out to your attorney to obtain the current state of affairs.