The CARES Act Provider Relief Fund: What We Know So Far…Client Alert
The CARES Act that was signed into law on March 27, 2020 provides for the Provider Relief Fund, which set aside $100 billion in relief funds for healthcare providers with expenses or lost revenue attributable to COVID-19. On April 9, 2020, the Department of Health and Human Services (“HHS”) released the first round of $30 billion of funding. All healthcare providers that received Medicare fee-for-service reimbursements in 2019 should have received a distribution. Payments will be made via electronic payment. Providers that do not receive electronic payment will receive paper checks over the next few weeks.
Providers have 30 days to accept the funds and agree to the Terms and Conditions associated with the payment through electronic attestation. We recommend that that our provider clients wait to sign the attestation and use the funds until additional guidance and commentary is released on the Terms and Conditions. There are many gray areas that require additional guidance and clarification.
Terms and Conditions:
- The provider must certify that it has billed Medicare in 2019 and currently provides diagnoses, testing, or care for individuals with possible or actual cases of COVID-19; is not currently terminated from participation in Medicare; is not currently excluded from participation in Medicare; is not currently excluded from participation in Medicare, Medicaid, or other Federal health care programs; and does not currently have Medicare billing privileges revoked.
- The provider must certify that the payment will only be used to prevent, prepare for, and respond to COVID-19, and be used to reimburse the provider only for healthcare related expenses or lost revenues that are attributable to COVID-19.
- The provider must certify that it will not use the payment to reimburse expenses or losses that have been reimbursed from other sources or that other sources are obligated to reimburse.
- The provider must submit reports to HHS to ensure compliance with these requirements.
- If the provider must submit a report to HHS if the provider has also received more than $150,000 in total funds under the Coronavirus Aid, Relief, and Economics Security Act (P.L. 116-136), the Coronavirus Preparedness and Response Supplemental Appropriations Act (P.L. 116-123), the Families First Coronavirus Response Act (P.L. 116-127), or any other Act providing COVID-19-related funding. This would include loans such as the Economic Injury Disaster Loan (EIDL) and Paycheck Protection Program (PPP). This report shall contain: the total amount of funds received from HHS under these programs; the amount of funds received that were expended or obligated for reach project or activity; a detailed list of all projects or activities for which large covered funds were expended or obligated, including: the name and description of the project or activity, and the estimated number of jobs created or retained by the project or activity, where applicable; and detailed information on any level of sub-contracts or subgrants awarded by the covered recipient or its subcontractors or subgrantees, to include the data elements required to comply with the Federal Funding Accountability and Transparency Act of 2006 allowing aggregate reporting on awards below $50,000 or to individuals, as prescribed by the Director of the Office of Management and Budget.
- The provider must maintain appropriate records and cost documentation, including, documentation required by 45 CFR §75.302 (financial management) and 45 CFR §75.361-75.365 (record retention and access), and other information required by future program instructions to substantiate the reimbursement of costs. The reports may be submitted to HHS and subject to audit and inspection.
- Providers cannot “balance bill” patients for any COVID-related treatment. All providers must bill patients as if the provider is an in-network provider even if the provider is out-of-network. Under the FFCRA and the CARES Act, private insurance plans are required to waive patient co-sharing payment requirements.
Like with the implementation of the FFCRA and DOL guidance as well as the CARES Act and guidance from the SBA, we anticipate that HHS will release additional guidance to assist providers in determining compliance with the attestation and clarify the Terms and Conditions. We recommend that providers take a wait-and-see approach to evaluate this guidance and determine whether to accept the funds subject to the Terms and Conditions.
CMS Accelerated and Advance Payment Program
In response to the COVID-19 pandemic, CMS expanded its Accelerated and Advance Payment Program. This program is separate from the payments through the CARES Act Provider Relief Fund. These expedited payments are typically offered to providers struggling with claim submission or claim processing due to hurricanes, tornadoes, or other natural disasters and act as short term loans that must be repaid. During the first week of April 2020, CMS distributed $34 billion to healthcare providers as part of the Accelerated/Advance Payment Program. Important facts:
- The payments are available to both Part A and Part B providers. Providers can apply for accelerated payment via their MAC. To locate your MAC, click here.
- Generally, providers can request up to 100% of the Medicare payment amount for a 3-month period. Certain Part A providers can request up to 6 months.
- Providers should be approved and funded within 7 days of submission of a complete request.
- The CARES Act extended the repayment timeframe for these accelerated payments. Certain Part A providers and all Part B suppliers will have 210 days from the date of disbursement to repay the balance. Inpatient acute care hospitals, children’s hospitals, certain cancer hospitals, and CAHs will have up to 1 year to repay the payments.
- Repayment obligations will begin 120 days after payments are made. The payments will be paid through recoupment efforts by the MAC against Medicare claims submitted by the provider. If the funds are repaid within the 210 day period, the funds act as an interest-free short term loan. However, after 210 days, the MAC will issue a demand letter and interest will start to accrue.
- Interest is set 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.
Providers may have already applied for and received accelerated payments through this program. In such an instance, providers will still be eligible to receive the payments under the CARES Act Provider Relief Fund. However, providers must be aware of the repayment obligations associated with the accelerated funds. Further, it is unclear whether the CARES Act Provider Relief Funds may be used to repay the accelerated payments.