CARES Act Provider Relief Fund

Co-authored by Marc Levy

The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was approved on March 27, 2020, and included a $100 billion distribution from the Public Health and Social Services Emergency Fund (Fund) to prevent, prepare for, and respond to COVID-19. These funds are to reimburse eligible health care providers for expenses or lost revenues that are attributable to COVID-19.

First Round of Funding – $30 Billion:

On Tuesday, April 7, 2020, the Centers for Medicare & Medicaid Services (CMS) Administrator Seema Verma announced that CMS will release an initial $30 billion from the $100 billion Fund. The following specifics were provided:

  • These are payments, not loans, to healthcare providers that will not need to be repaid.
  • The money will go to healthcare providers who serve Medicare patients, and will be apportioned based on Medicare revenue.
  • There is no application process. The funds will automatically be direct deposited into hospital accounts.
  • This is not a first-come, first-serve basis as CMS is basing this on each provider’s Medicare revenue.
  • A provider can estimate their payment by dividing their 2019 Medicare fee for service (not including Medicare Advantage) payments they received by $484 billion, and multiplying that ratio by $430 billion. Providers can obtain their 2019 Medicare FFS billings from their organization’s revenue management system.
  • For providers who receive the majority of their revenue from Medicaid, private payors or some other non-Medicare source (children’s hospitals, nursing homes and certain physician groups), those entities will get priority in the next round of funding.
  • Within 30 days of receiving the payment, providers must sign an attestation confirming receipt of the funds, and agreeing to the terms and conditions of payment. Among these terms and conditions are the following:
    • The recipient certifies that it currently provides diagnoses, testing or care for individuals with possible or actual cases of COVID-19
    • The recipient certifies that the payment will only be used to prevent, prepare for and respond to coronavirus, and shall reimburse the recipient only for healthcare-related expenses or lost revenues that are attributable to COVID-19
    • The recipient certifies 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 recipient must agree to not seek collection of out-of-pocket payments from COVID-19 patients that are greater than what the patient would have otherwise been required to pay if the care had been provided by an in-network provider
    • None of the funds shall be used to pay the salary of an individual at a rate “in excess of Executive Level II” (currently $197,300)
  • The portal for signing the attestation will be open the week of April 13, 2020.

It should be noted that the U.S. Department of Health & Human Services broadly views every patient as a possible case of COVID-19.  In addition, most healthcare providers have experienced lost revenues as a result of the current crisis.

Second Round of Funding (Estimated at an Additional $30 Billion):

  • CMS Administrator Seema Verma said April 15 that the next slice of funding “will address all providers, as well as address hot spots”
  • This second round of funding will be distributed in two pieces (NOTE: These amounts are preliminary as of April 22, 2020):
    • Approximately $20 billion will be distributed based on a hospital’s proportion of total revenue, including money from private insurers and Medicaid
    • The remaining $10 billion will be distributed to hospitals with large numbers of COVID-19 patients
  • Facilities are being asked to provide the following information through an authentication portal established by the HHS vendor TeleTracking:
    • For each facility with a Medicare Tax Identification Number (TIN):
      1. Total number of Intensive Care Unit beds as of April 10, 2020
      2. Total number of admissions with a positive diagnosis for COVID-19 from January 1 to April 10, 2020
      3. National Provider Identifier
    • HHS has indicated that hospitals will be able to submit this data via data entry either as an individual hospital, entering multiple hospitals at one time, or a batch upload of data of multiple hospitals via a designated individual or third party entity
    • This website was originally used for facilities to submit information relative to daily data reports on testing, capacity and utilization, and the patient flows to facilitate the public health response to COVID-19. HHS is going to utilize this website to accumulate the requested data above in order to facilitate part of the next round of funding
    • HHS has indicated that submitting this data “will inform the decision-making on targeted Relief Fund payments and is a prerequisite to payment, but is not a guarantee of eligibility for any amount”
  • An email was sent on April 12, 2020 to your Site Administrator with instructions and a link to register for this portal (if you are not sure whom within your organization received this notification, or if you have questions about the registration process, contact TeleTracking Technical Support at 877-570-6903)
  • The Due Date for submission of this information is 11:59 p.m. PT, Thursday April 23, 2020

Resources:

FOR MORE INFORMATION, PLEASE CONTACT THE FOLLOWING MEMBERS OF OUR HEALTHCARE ADVISORY GROUP:

Eric Wetherell, CPA: Principal and Healthcare Advisory Group Lead

Denis Houle: Senior Manager

Marc Levy: Senior Manager

Disclaimer of Liability: This publication is intended to provide general information to our clients and friends. It does not constitute accounting, tax, investment, or legal advice; nor is it intended to convey a thorough treatment of the subject matter.

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