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Important Update and FAQs: HHS Tweaks Guidance on The CARES Act Provider Relief Fund Terms and Conditions

On April 10, 2020, many providers awoke to find electronic payment deposits from the Department of Health and Human Services (HHS) in their bank accounts. This was the first round of $30 billion of payments from the HHS Provider Relief Fund as a result of the CARES Act, which was signed into law on March 27, 2020. All healthcare providers that received Medicare fee-for-service payments in 2019 should have received a payment.  

Providers have 30 days to accept the funds and agree to the Terms and Conditions associated with the payment through electronic attestation. Providers must sign the Attestation and accept the Terms and Conditions to payment via HHS’s online portal.   

I am a provider that received payment (or I expect to receive a paper check), should I attest and agree to the Terms and Conditions? 

On April 16, 2020, HHS updated its guidance regarding the Terms and Conditions for acceptance of the payment and use of the funds. CMS made clear that if a provider ceased operations as a result of the COVID-19 pandemic, the provider is still eligible to receive funds so long as the provider provided diagnoses, testing, or care for individuals with possible or actual cases of COVID-19. HHS clarified that care does not have to be specific to treating COVID-19. HHS broadly views every patient as a possible case of COVID-19. This clarification will make it much easier for providers to attest to the Terms and Conditions. See our April 10 alert for more details on Terms and Conditions.  

Providers must attest via HHS’s online portal within 30 days of receipt of the payment, which in most instances will be May 10, 2020. Providers that do not desire to keep the payment must contact HHS within 30 days of receipt of payment and remit the payment to HHS in accordance with HHS’s instructions. If a provider fails to attest to the Terms and Conditions and does not remit payment back to HHS, the provider will be deemed to accept the Terms and Conditions and must still be in compliance. 

Providers that accept the payments and attest to the Terms and Conditions must establish a policy and plan for record-keeping evidencing compliance with the Terms and Conditions. We anticipate that HHS will conduct audits to ensure providers’ compliance.  

What if I did not receive a payment?

Some providers did not receive an electronic payment on April 10, 2020, but still received Medicare fee-for-service payments in 2019. If you did not receive an electronic payment, but believe you are entitled to payment through the Provider Relief Fund, you may be receiving a paper check over the next few weeks. HHS partnered with UnitedHealth Group and Optum to made the payments. Therefore, providers that are out-of-network with UHC or do  not receive electronic payments from UHC may likely receive paper checks. 

Also, individual providers who billed through a group practice entity, either as an employee or independent contractor will not receive a payment. In such an instance, HHS will make payment to the billing provider, which is the billing entity.  

What if I also received payments under the CMS Accelerated/Advance Payment Program?

The CMS Accelerated/Advance Payment Program is separate from the payments through the CARES Act Provider Relief Fund. As such, providers can receive funding through both programs. It is important to note that the CARES Act Provider Relief Fund payments do not need to be repaid so long as the provider accepts the payments and attests to the Terms and Conditions through the online portal. Payments through the CMS Accelerated/Advance Payment Program are loans that must be repaid. A provider’s repayment obligation begins 120 days after the payment is made and must be repaid through recoupment efforts by the MAC. If the funds are not repaid within 210 days after issuance, the MAC will issue a Demand Letter and the outstanding balance will begin to accrue interest at the statutory rate (as set by the Department of Treasury), which is currently at 10.25%. Interest is assessed every 30 days until the debt is fully paid. 

Thus, providers must carefully consider whether to apply for the Accelerated/Advance Payment Program. Factors to consider are cash flow concerns with recoupment efforts beginning on Day 120 and whether the entire balance can be repaid within 210 days to avoid interest.

What about the remaining $70 billion?

HHS has stated that the remaining $70 billion will be distributed by HHS in accordance with a targeted distribution plan that will focus on: (1) providers in areas particularly impacted by the COVID-19 pandemic, (2) providers in rural areas, (3) providers of services with lower shares of Medicare reimbursement or who predominantly serve the Medicaid population, and (4) providers that treat uninsured populations. 

Providers may schedule a consultation session with Attorney Amanda Waesch at a discounted rate of $250. For more information, please contact Amanda Waesch at alwaesch@bmdllc.com or 330-253-9185.   

Lessons Learned: Five Tips for Buying or Selling a Practice

If you are anticipating buying or selling a practice during the coming months, you are not alone. The healthcare industry is experiencing a wave of integration. In fact, it has been occurring for several years. Many transactional healthcare attorneys have negotiated and closed dozens of these transactions for clients. They have negotiated on behalf of the sellers in some cases and the buyers in others.

Ramping Up – A Quick Guide to Pressing COVID-19 Employment Law Issues

As the country continues to grapple with a global pandemic that now seems to be never-ending, businesses everywhere are waking up to realize that the calming of the COVID-19 employment issues over the summer has come to an end. As cases rise exponentially in all 50 states as we head into the winter months, the number of employment issues related to COVID-19 will also increase dramatically. For these reasons, it is important that we return to the employment law basics that were covered this prior spring, while highlighting the many lessons we have learned along the way. As COVID-19 matters and concerns continue to hinder the working environment of every business, it is important that you reference this review to guide you through these tough issues and questions.

Your Workplace Under Biden

This is my favorite recurring post – Predictions of How a New Administration Will Affect Your Workplace. Four years ago, we accurately called the emasculation of the 2016 proposed FLSA Overtime Rules (the salary exemption threshold was set at $35,568 in 2019, rather than $47,476 as proposed), we forecasted a conservative shift of the NLRB and its results (a roll-back of employee rights, social media policy evaluations, and joint employer rules), and we nailed the likelihood of multiple conservative appointments to the United States Supreme Court and its long-term effects (although I completely failed to predict that my ND classmate Amy Coney Barrett would fill the final vacancy during the Trump administration). This time, the L+E Practice of BMD has decided to make it a group effort at predicting what will happen, what probably happen, and what might happen under President Biden. As always, please save this in your important files and pull it out four (or eight) years from now to judge our accuracy.

HHS Provider Relief Funds Reporting Requirements: Important Updates Every Provider Should Know

HHS continues to revise its reporting requirements for the use of the Provider Relief Funds. Providers with more than $10,000 in Provider Relief Fund payments must report on the use of the funds through December 31, 2020. The reporting window will begin on January 15, 2021 and providers must complete reporting obligations for FY 2020 by February 15, 2021 through a portal designed by HHS. However, providers that have unexpended funds as of December 31, 2020, will have an additional 6 months to use the remaining funds through June 30, 2021. These providers must submit a second and final report no later than July 31, 2021.

Should I Apply for Phase 3 Funds? Important Considerations Every Provider Should Know

On October 1, 2020, the Department of Health and Human Services (“HHS”) announced an additional $20 billion in new funding for providers through a Phase 3 distribution. Importantly, providers that previously received HHS Provider Relief Funds or already received payments of approximately 2% of annual revenue from patient care are eligible to apply. Eligible providers have until November 6, 2020 to apply for these Phase 3 Funds. However, the question from providers continues to be: Should I Apply for Phase 3 Funds?