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Client Alerts, News Articles, Blog Posts, & Multimedia

Everything you need to know about BMD and the industry.

Did You Receive More than $750,000 in Provider Relief Funds?

The Provider Relief Funds (“PRF”) - authorized under the CARES Act - have been a vital tool for health care providers during the COVID-19 public health emergency. These funds have allowed providers to stay open and continue to offer care during these pressing times. While helpful, these funds do come with several important obligations. First, fund recipients are required to comply with certain record-keeping requirements as well as comply with certain balance billing prohibitions. See our Client Alert. Second, fund recipients are required to report their intent, use of funds, and other data elements, which helps promote transparency to the federal government. Please see our Client Alert on provider relief fund reporting requirements. Third, and perhaps a new concept for many providers, fund recipients of more than $750,000 must undergo a “single audit” to ensure program compliance and appropriate use of funds.

A single audit analyzes how an organization spends federal funds. Under the PRF, providers have two audit options: (1) a single audit on the financial statements of the entity; or (2) a program-specific single audit on just the revenue and expenditures related to PRF payments.

The federal government has an interest in certifying disbursed funds are properly used and put towards their intended purpose. Auditors review a wide range of criteria, including eligibility, cash management and engaging in allowable expenses. Reviewers will examine all documentation related to the use of PRF dollars, including, but not limited to, invoices, contracts, balance sheets, and other accounting records. To help expedite the audit process, providers are encouraged to keep organized and detailed documentation and track every cent of spending. Providers should be ready to connect an expense to the intended purpose of the funding. BMD has created a Provider Relief Fund Policy as well as a spreadsheet to assist providers in tracking expenses, revenues, and appropriate use of PRF.

A single audit is often due within 9 months after the end of the audit period. Since the PRF covers the 2020 calendar year, a single audit related to these funds should be completed by September 2021. Extensions may be granted on a case-by-case. Providers should anticipate an audit to take anywhere between 3-7 days.

Please contact BMD Healthcare and Hospital Law Member, Amanda Waesch at alwaesch@bmdllc.com or 330-253-9185 if you have any questions regarding PRF audits, which audit type might be best for your practice, or any other general CARES Act and PRF questions.

Explosive Growth in Pot of Gold Opportunity for Bank (and Other) Cannabis Lenders Driving Erosion of the Barriers

Our original article on bank lending to the cannabis industry anticipated that the convergence of interest between banks and the cannabis industry would draw more and larger banks to the industry. Banks were awash in liquidity with limited deployment options, while bankable cannabis businesses had rapidly growing needs for more and lower cost credit. Since then, the pot of gold opportunity for banks to lend into the cannabis industry has grown exponentially due to a combination of market constraints on equity causing a dramatic shift to debt and the ever-increasing capital needs of one of the country’s fastest growing industries. At the same time, hurdles to entry of new banks are being systematically cleared as the yellow brick road to the cannabis industry’s access to the financial markets is being paved, brick by brick, by the progressively increasing number and size of banks that are now entering the market.

2021 EEOC Charge Statistics: Retaliation & Impact of Remote Work

The U.S. Equal Employment Opportunity Commission (EEOC) released its detailed information on workplace discrimination charges it received in 2021. Unsurprisingly, for the second year in a row, the total number of charges decreased as COVID-19 either shut down workplaces or disconnected employees from each other. In 2021, the agency received a total of approximately 61,000 workplace discrimination charges - the fewest in 25 years by a wide margin. For reference, the agency received over 67,000 charges in 2020, and averaged almost 90,000 charges per year over the previous 10 years.

Ohio’s Managed Care Overhaul Delayed – New Implementation Timeline

At the direction of Governor Mike DeWine, the Ohio Department of Medicaid (ODM) launched the Medicaid Managed Care Procurement process in 2019. ODM’s stated vision for the procurement was to focus on people and not just the business of managed care. This is the first structural change to Ohio’s managed care system since the Centers for Medicare & Medicaid Services' (CMS) approval of Ohio’s Medicaid program in 2005. Initially, all of the new managed care programs were supposed to be implemented starting on July 1, 2022. However, ODM Director Maureen Corcoran recently confirmed that this date will be pushed back for several managed care-related programs.

Laboratory Specimen Collection Arrangements with Contract Hospitals - OIG Advisory Opinion 22-09

On April 28, 2022, the Department of Health and Human Services, Office of Inspector General (“OIG”) published an Advisory Opinion[1] in which it evaluated a proposed arrangement where a network of clinical laboratories (the “Requestor”) would compensate hospitals (each a “Contract Hospital”) for specimen collection, processing, and handling services (“Collection Services”) for laboratory tests furnished by the Requestor (the “Proposed Arrangement”). The OIG concluded that the Proposed Arrangement would generate prohibited remuneration under the federal Anti-Kickback Statute (“AKS”) if the requisite intent were present. This is due to both the possibility that the proposed per-patient-encounter fee would be used to induce or reward referrals to Requestor and the associated risk of improperly steering patients to Requestor.

Property Owner Protection from Tax Valuation Challenges

New legislation provides significant new protections for commercial property owners against challenges to valuation primarily by local school boards and prohibiting side agreements to avoid tax valuation changes. The Ohio Legislature has approved House Bill 126 which will go into effect July 2022 but will effectively apply to the 2023 tax valuation year.