HHS announced that it will begin to deliver the initial $30 billion of the $100 billion from the CARES Act Provider Relief Funding on April 10. Payments are being made via direct deposit to health care providers and suppliers (“Recipients”) in most cases. Several Recipients reported receiving the funds immediately after or even before the announcement was made. This initial distribution is based on 2019 Medicare fee-for-service (“FFS”) Part A & B payments and should be about 6% of what a Recipient’s payments were in 2019. Although HHS refers to the payments as grants and no advance request was needed, they are not without subsequent conditions. Recipients will need to:
- Submit an attestation within 30 days agreeing to 10 pages of Terms & Conditions.
- Submit quarterly reports on total amounts received for COVID-19 and use of funds.
- Agree to collect only in-network patient liability from out-of-network COVID-19 patients.
- Not use funds for certain purposes prohibited by federal statutes.
Key Takeaways
- Confirm your payment through each tax identification number (“TIN”). Also verify the payment amount is accurate based on your 2019 Medicare FFS payments.
- Review the Terms & Conditions and sign and submit the attestation.
- Establish procedures for subsequent compliance with expenditure restrictions and reporting obligations.
- Subsequent tranches of the $100B Fund are anticipated to address providers in hot spots, rural areas, and with low Medicare utilization (safety net, children’s hospitals, etc.).
How Much and How Are Funds Distributed?
Recipients are allotted a portion of the $30 billion based on their share of 2019 Medicare FFS reimbursements, which should be approximately 6.2% of each Recipient’s 2019 FFS payments. A Recipient can estimate the expected payment by multiplying its 2019 Medicare FFS payments (excluding Medicare Advantage) by 6.2%. For example, a Recipient that received $121 million in FFS payments should receive $7.5 million from this distribution.
HHS is working with UnitedHealth Group (“UHG”) to make these payments as quickly as possible by automated Clearing House accounts on file with UHG, UnitedHealthcare or Optum Bank or other accounts used for Medicare payments. The payment description should be identified as “HHSPAYMENT” and/or “US HHS Stimulus.” Recipients which normally receive payment by paper check should receive the payment within the next few weeks.
Who Will Receive a Payment?
This initial broad-based distribution of the relief funds will go to providers and suppliers that received Medicare FFS payments in 2019. This includes hospitals, physician groups, and other health care Medicare-enrolled providers (e.g., nursing homes, home health, etc.). The key in tracking the payment is identifying the TIN that is tied to Medicare payments. Large organizations and health systems will receive a payment for each TIN that bills Medicare.
Which entity will receive these payments for physicians will depend on where and how the physician services are billed and paid by Medicare. For employed physicians, the payment will go directly to the billing organization. For physicians that are in group practices, payments should go to the group practice as the billing organization. Solo practitioners should receive a payment directly.
What Else Do Recipients Need to Do?
HHS describes these payments as grants and not loans. Recipients do not need to apply for the distribution and the funds will not need to be repaid. Note that these payments are not part of the Medicare accelerated payment program funds many health care entities have received over the last two weeks.
The payments are not, however, without conditions. Recipients must sign an attestation within 30 days of payment agreeing to the 10 page terms and conditions found at this link hhs.gov/providerrelief. These terms and conditions should be carefully reviewed by Recipients. These conditions include:
- Recipients must submit a report after the end of each calendar quarter containing, among other things, total amounts received from the government related to COVID-19 and details of projects and activities for which the funds were used;
- Recipients must maintain appropriate records and submit such records to HHS upon request;
- Recipients must not seek to collect from patients out-of-pocket expenses in an amount greater than what a patient would have otherwise been required to pay if the care had been provided by an in-network Recipient; and
- Recipients cannot use funds for certain expenses, including certain executive pay, the promotion of gun control, lobbying, abortions, embryo research, promotion of legalization of controlled substances or funding the Association of Community Organizations for Reform Now or any of its affiliates.
Future Distributions of Remaining $70B?
HHS/CMS is working on the next distributions for health care providers, which will focus on providers in “hot spots,” rural areas and those with lower Medicare utilization (e.g., those that serve a high Medicaid population, such as children’s hospitals and safety net hospitals). The next distributions will also include payments for COVID-19 care for uninsured patients.
Visit hhs.gov/providerrelief for additional information.
Questions can be addressed to the following members of our COVID Funding Team or your regular Hall Render attorney.
- David Snow at (303) 801-3536 or dsnow@hallrender.com
- Lori Wink at (414) 721-0456 or lwink@hallrender.com
- Joseph Krause at (414) 721-0906 or jkrause@hallrender.com
- Elizabeth Elias at (317) 977-1468 or eelias@hallrender.com
- Benjamin Fee at (720) 282-2030 or bfee@hallrender.com
Hall Render’s attorneys and professionals continue to maintain the most up-to-date information and resources at our COVID-19 Resource page, through our 24/7 COVID‑19 Hotline at (317) 429-3900, or your regular Hall Render attorney.
Hall Render blog posts and articles are intended for informational purposes only. For ethical reasons, Hall Render attorneys cannot—outside of an attorney-client relationship—answer specific questions that would be legal advice.
