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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

The Provider Relief Funds have been fraught with uncertainty and frustration. Initially touted as a “no strings attached” relief payment, HHS quickly distributed the Phase 1 $20 billion in Provider Relief Funds (seemingly overnight) to providers that billed Medicare in 2019 without any initial application, proof of eligibility, or demonstration of need. While the funds came as an immediate relief to many providers, HHS required these providers to attest to receipt of the funds as well as a 10-page Terms and Conditions with multiple requirements. Notably, HHS required recipients to comply with certain HRSA grant requirements related to accounting of funds and record-keeping requirements. 

Following the initial $20 billion distribution, HHS then made available an additional $30 billion in funds, but only for those providers that received an initial distribution. This was an application-based distribution and providers that received an initial distribution were essentially capped at a maximum of 2% of gross receipts from 2019. Providers were also required to provide information on lost revenues in March and April 2020 to justify eligibility.  

HHS distributed additional funds through a Phase 2 general distribution to: those providers that were ineligible for Phase 1 distributions (e.g. Medicaid, CHIP, and dental providers); providers that did not receive funds equaling 2% of 2019 gross receipts; or providers that returned Phase 1 funds, but changed their mind and would like to receive Provider Relief Funds. Again, providers were required to submit an application for Phase 2 funds. Additionally, HHS capped Phase 2 distributions at 2% of 2019 total patient care revenues and required providers to attest to Terms and Conditions.

Now HHS has announced its Phase 3 general distribution, with an application deadline of November 6, 2020. HHS continually delayed the quarterly reporting requirements set forth in the original Terms and Conditions. However, HHS has continued to issue guidance notifying providers that they must be prepared to demonstrate (1) lost revenues, and (2) increased expenses attributable to COVID-19 in order to justify the receipt and use of these funds. On the heels of the Phase 3 general distribution, HHS recently issued clarifications on the Provider Relief Fund Reporting Requirements, which will begin on January 15, 2021. 

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.

With the deadline for Phase 3 looming and the recent reporting clarifications, here are some important considerations for providers that are determining whether to apply for Phase 3 funds:

  • Per the IRS, providers must include all Provider Relief Funds in gross income. As such, providers must calculate increased tax liability due to the receipt of the Provider Relief Funds. Additionally, if the provider received a PPP loan, the provider may also have increased tax liability due to the use of the PPP funds and the nondeducibility of certain expenses paid for with PPP monies.
  • The new reporting obligations will no longer focus on just April and May 2020. HHS now requires the provider to review year-over-year data comparing 2019 to 2020 in order to calculate changes in increased expenses and lost revenue attributable to COVID-19.
  • When calculating increased expenses and determining lost revenues, providers must calculate and report other income and grants received such as PPP funds, EIDL, FEMA monies, grants from state and local governments, etc. Additionally, a provider’s lost revenue calculation will look at operating revenues from patient care services; the calculation cannot include shareholder or partnership payments.
  • The Provider Relief Funds cannot be used to repay Medicare Accelerated/Advance Payments.
  • HHS has made clear that providers that do not have or do not anticipate that they will have eligible expenses or lost revenue in excess of the Provider Relief Funds must return the funds. Providers must carefully calculate increased expenses attributable to COVID-19 and lost revenue due to COVID-19 in accordance with the new guidance issued by HHS. 
    • HHS has the right to audit providers’ use of the funds and calculation of increased expenses and lost revenue through a 3-year statutory lookback period.
  • If the Provider Relief Funds were held in an interest-bearing account, the interest must be reported as “Other Assistance” and used towards a reportable use of funds. If the provider does not use the funds towards a reportable use, HHS requires the provider to return the unexpended earned interest.  
    • If the provider must return any unused portion of the Provider Relief Funds, the provider must also return any earned interest on the funds.

For more information on the HHS Provider Relief Fund Reporting Requirements, please visit our website at www.bmdllc.com. For more information on the HHS Provider Relief Funds, please contact Amanda Waesch at alwaesch@bmdllc.com or 330-253-9185.

 

The Masks Are Back: New OSHA Regulations for Healthcare Employers

Employment Law After Hours is back with a News Break Episode. Yesterday, OSHA published new rules for healthcare facilities, including hospitals, home health employers, nursing homes, ambulance companies, and assisted living facilities. These new rules are very cumbersome, requiring mask wearing for all employees, even those that are vaccinated. The only exception is for fully vaccinated employees (2 weeks post final dose) who are in a "well-defined" area where there is no reasonable expectation that any person with suspected or confirmed COVID-19 will be present.

New OSHA Guidance for Workplaces Not Covered by the Healthcare Emergency Temporary Standard

On June 10, 2021, OSHA issued an Emergency Temporary Standard (ETS) for occupational exposure to COVID-19, but it applies only to healthcare and healthcare support service workers. For a detailed summary of the ETS applicable to the healthcare industry, please visit https://youtu.be/vPyXmKwOzsk. All employers not subject to the ETS should review OSHA’s contemporaneously released, updated Guidance on Mitigating and Preventing the Spread of COVID-19 in the Workplace. The new Guidance essentially leaves intact OSHA’s earlier guidance, but only for unvaccinated and otherwise at-risk workers (“at-risk” meaning vaccinated or unvaccinated workers with immunocompromising conditions). For fully vaccinated workers, OSHA defers to CDC Guidance for Fully Vaccinated People, which advises that most fully vaccinated people can resume activities without wearing masks or physically distancing, except where required by federal, state, or local laws or individual business policies.

Employer Liability for COVID-19 Vaccine Side Effects

As employers encourage or require employees to obtain a COVID-19 vaccine, they should be aware of OSHA recording obligations and potential workers’ compensation liability. Though OSHA has yet to revise its COVID-19 guidance in response to the latest CDC recommendations, OSHA has revised its position regarding the recording of injury or illness resulting from the vaccine. Until now, OSHA required an employer to record an adverse reaction when the vaccine was required for employees and the injury or illness otherwise met the recording criteria (work-related, a new case, and meets one or more of the general recording criteria). OSHA has reversed course and announced that it will not require recording adverse reactions until at least May 2022, irrespective of whether the employer requires the vaccine as a condition of employment. In its revised COVID-19 FAQs, OSHA states:

The New Rule 1.510 - Radical Change for Summary Judgement Procedure in Florida

In civil litigation, where both sides participate actively, trial is usually required at the end of a long, expensive case to determine a winner and a loser. In federal and most state courts, however, there are a few procedural shortcuts by which parties can seek to prevail in advance of trial, saving time, money and annoyance. The most common of these is the “motion for summary judgment”: a request to the court by one side for judgment before trial, generally on the basis that the evidence available reflects that a win for that party is legally inevitable and thus required. Effective May 1, 2021, summary judgment procedure in Florida has radically changed.

Vacating, Modifying or Correcting an Arbitration Award Under R.C. 2711.13: Three-Month Limitation Maximum; Not Guaranteed Amount of Time

In a recent decision, the Supreme Court of Ohio held that neither R.C. 2711.09 nor R.C. 2711.13 requires a court to wait three months after an arbitration award is issued before confirming the award. R.C. 2711.13 provides that “after an award in an arbitration proceeding is made, any party to the arbitration may file a motion in the court of common pleas for an order vacating, modifying, or correcting the award.” Any such motion to vacate, modify, or correct an award “must be served upon the adverse party or his attorney within three months after the award is delivered to the parties in interest.” In BST Ohio Corporation et al. v. Wolgang, the Court held the three-month period set forth in R.C. 2711.13 is not a guaranteed time period in which to file a motion to vacate, modify, or correct an arbitration award. 2021-Ohio-1785.