Resources

Client Alerts, News Articles, Blog Posts, & Multimedia

Everything you need to know about BMD and the industry.

Important Updates, Deadlines, and Clarifications for the HHS Provider Relief Funds

Client Alert

HHS Provider Relief Fund Recap

On May 20, 2020, HHS made important updates and clarifications regarding the General Distribution payments to providers.  Between April 10, 2020 and April 24, 2020, HHS distributed an initial $30 billion to providers based on the provider’s 2019 Medicare fee-for-service receipts. These funds were distributed automatically and providers did not need to submit an application in order to receive these funds. The funds were originally touted as a “no strings attached” stimulus payment reserved for healthcare providers. But HHS issued a 10-page Terms and Conditions and required that providers sign an attestation confirming receipt of the funds and agreeing to the Terms and Conditions. For more information on eligibility and the Terms and Conditions, please click here.  

Providers had 30 days from the date of receipt to attest to receipt of these funds. HHS then extended this time frame an additional 45 days. Provider received the funds between April 10, 2020 and April 24, 2020. Thus, providers that received their funds on April 10, 2020 must attest by May 25, 2020. Providers that received their funds on April 24, 2020 must attest by June 8, 2020. However, that date is now June 3, 2020 as further explained below.  

HHS also allocated an additional $20 billion to be distributed as General Distribution payments as Round 2 payments.  Providers must apply for Round 2 payments, which will be distributed based on the provider’s entire net patient revenue and for purposes of offsetting the provider’s lost revenue due to the COVID-19 pandemic. Providers that received and attested to Round 1 payments are eligible to apply for Round 2 payments. Providers that desire to apply for Round 2 payments must submit tax information and financial data supporting lost revenue for March 2020 and April 2020. The deadline to submit this information and apply for Round 2 funds is June 3, 2020. Providers applying for Round 2 funds must agree to an 11-page Terms and Conditions that is very similar to the Terms and Conditions for Round 1 payments.

Here are some key takeaways as we near the deadlines:

  1. Providers should immediately attest to Round 1 or refund the monies.
  2. Providers should review lost revenue calculations (from March 2020 and April 2020 as well as projected ongoing lost revenue) to evaluate whether to apply for Round 2.
  3. Providers should work with their accountant to apply for Round 2 funds by submitting the required tax forms and financial statements.
  4. Providers should maintain COVID-related expenses and updated lost revenue calculations in accordance with their HHS Fund Policy. Lost revenue calculations and financial information should be updated monthly.  

Is there a repayment obligation?

No. These funds are federal grants that do not need to be repaid. However, these federal grants are governed by federal regulations and must be used in accordance with their intended purpose, as outlined in the Terms and Conditions. Pursuant to 45 CFR §75.302, all healthcare providers that received payments from HHS under the CARES Act Provider Relief Fund must have a policy that outlines proper use of the funds and accounting. 

Should I attest to Round 1? If I do not fill out the attestation and do not return the funds, aren’t I “deemed” to have attested?

We recommend that providers affirmatively attest and not be “deemed” to attest. First, providers must confirm the amount received through the attestation portal. This will proactively notify HHS the amount the provider received. If the provider received more than intended, HHS will likely take action earlier to work with the provider in refunding any excess. Second, providers may not apply for Round 2 funds until the provider affirmatively attests to the Round 1 distributions.  

I underwent a change of ownership in 2019.  Am I eligible to attest to Round 1?

If you underwent a change of ownership, purchase, sale, merger, or other change in ownership or information, you may not be eligible to attest to the funds. HHS issued new FAQs regarding these specific factual scenarios. As these are fact-intensive determinations; we recommend scheduling a consultation. 

What if I already attested to Round 1 (initial $30 billion of Provider Relief Funds)? Must I submit additional financial information?

Despite some misleading statements on the HHS website, we confirmed with the Provider Relief Hotline that there is no obligation to submit tax documents or financial statements evidencing lost revenue if the provider is only attesting to receipt of the Round 1 funds and does not desire to apply for additional funding. 

Should I apply for Round 2 funds?

You should only apply for Round 2 funds if your overall lost revenues and COVID-related increased expense exceed the amount of funding you received in Round 1. To apply for Round 2 payments, you will need the following information:

  • TIN (that received Round 1 funds and submitted an attestation)
  • TINs of any subsidiary organizations (that do not file separate tax returns)
  • Estimate of lost revenue for March 2020 and April 2020 (using a reasonable accounting methodology)
  • Copy of most recent tax filing (2017, 2018, or 2019) 

Further, if your Round 1 payment was equal to or more than 2% of your 2018 patient revenue, you will not be eligible for additional funds.  

It is important to note that eligibility for Round 2 is determined by HHS based on the information submitted by the provider.  HHS will review the provider’s submission and make a final determination as to eligibility. Thus, if the Round 1 payment was not sufficient to cover lost revenue, the provider should apply for Round 2. 

If I receive HHS Provider Relief Funds, am I eligible for other loans, stimulus payments, grants, or similar programs?

Yes. The HHS Provider Relief Funds are part of a $100 billion fund established through the CARES Act that is specifically designed to provide reimbursement to healthcare providers for healthcare-related expenses and lost revenue attributable to COVID-19. The Terms and Conditions contemplate that the provider may also receive funding, loans, and payments from other sources such as the EIDL, PPP, and CMS Accelerated/Advance Payment Program. To be clear, a provider cannot use HHS Funds for expenses or lost revenue that is reimbursement or allocated to another funding source or loan program.

Is the information I submit public record?

HHS has posted a list of providers and the amount of Provider Relief Funds distributed to them; however, financial data will not be publicly available. 

For more information, please contact Amanda L. Waesch at alwaesch@bmdllc.com or 330-253-1985.


Valley National Bank/Trulieve Loan: A Big Step Out of the Shadows

In a late December press release, Trulieve announced that it had secured a $71.5 million commercial bank loan. In addition to the amount of the loan, which may be the largest commercial bank loan to date to a cannabis company, the release prominently identified Valley Bank and featured both a quote from Valley’s Senior Vice President, John Myers, and a description of the Bank’s service platform and commitment to the cannabis industry.

The End of Non-Competes? The Impact It Will Have on the Healthcare Industry

On January 5, 2023, the Federal Trade Commission (“FTC”) announced a proposed rule that, if enacted, will ban employers from entering into non-compete clauses with workers (the “Rule”), and the Rule would void existing non-compete agreements. In their Notice, the FTC stated that if the Rule were to go into effect, they estimate the overall earnings of employees in the United States could increase by $250 billion to $296 billion per year. The Rule would also require employers to rescind non-competes that they had already entered into with their workers. For purposes of the Rule, the FTC has defined “worker” to also include any employees, interns, volunteers, and contractors.”

2022 Healthcare Recap and 2023 Healthcare Check-Up

As the country begins to return to a new “normal” following the COVID-19 pandemic, there are many healthcare rules changing on both the federal and state levels as a result. Thus, it is important for healthcare providers and their employers to be aware of these changing rules, and any implications they may have on their practice. Look back on healthcare in 2022 and find a checklist for 2023.

Direct Support Professional Retention Payments

On December 15, the Ohio Senate and House passed House Bill 45, which authorizes the Department of Developmental Disabilities (DODD), in conjunction with the county boards of developmental disabilities, to launch their initiative to issue retention payments to Direct Support Professionals (DSPs). These retention payments will be distributed quarterly to participating home and community-based waiver providers to address the workforce crisis in the direct provider sector. Governor DeWine needs to sign the Bill to begin the payments, but he is expected to do so by the end of 2022.

Real Estate Investors Position for 2023 Opportunities

Real estate investors weathered another year in a post-pandemic world, with the year closing with yet another interest rate increase coupled with both uncertainty and heightened interest carrying into 2023. Just last Wednesday, the Federal Reserve raised its benchmark interest rate 0.50 percentage points, shifting the target range to 4.25% to 4.50%. The new level is the highest the fed funds rate has been since December 2007 and marks the seventh rate hike this year. So what does this mean to investors, brokers, lenders, and others in the real estate world? Read a few perspectives below from stakeholders familiar with our BMD clients and the markets in which they do business.