This month, HHS released over twenty new and modified Frequently Asked Questions (FAQs) regarding payments distributed to providers via the CARES Act Provider Relief Fund. The FAQs cover a wide range of topics, including payments received in error, permissible uses of funds, calculating “expenses attributable to coronavirus not reimbursed by other sources,” and more.

The new FAQs broadly discuss the following general categories: (1) returning payments; (2) terms and conditions; (3) auditing and reporting requirements; (4) ownership structure and financial relationships; (5) use of funds; and (6) vaccine distribution and administration. Particularly significant is that the FAQs explain that if a provider received a greater payment than expected and believed it was made in error, the provider should contact the Provider Support Line and seek clarification. This is a change from HHS’ previous FAQ (modified on October 28, 2020) that stated: “if you believe you have received an overpayment and expect that you will have cumulative lost revenues and increased costs that are attributable to coronavirus during the COVID-19 public health emergency that exceed the intended calculated payment, then you may keep the payment.” Additionally, the FAQs explain that if a provider returns its payment to HHS, it must also return any accrued interest associated with the amount returned if the payments were held in an interest-bearing account.

The FAQs also provide additional clarity on the use of funds. Providers can use funds on expenses incurred to secure and maintain adequate personnel (e.g., hiring bonuses and retention payments, childcare, transportation, etc.) if these expenses were newly incurred after the Public Health Emergency declaration and they were necessary to secure and maintain adequate personnel. Additionally, the FAQs explain that funds can be used to pay taxes (except for Nursing Home Infection Control Distribution payments), and the funds can be used on outsourced or third-party vendor services that enable sustained access to healthcare services and daily operations (e.g., food and patient nutrition services, facilities management, etc.) if they are attributable to coronavirus.

Furthermore, HHS explains how providers should calculate “expenses attributable to coronavirus not reimbursed by other sources.” The FAQ states, in relevant part:

Providers can identify their healthcare related expenses, and then apply any amounts received through other sources, such as direct patient billing, commercial insurance, Medicare/Medicaid/Children’s Health Insurance Program (CHIP), or other funds received from the Federal Emergency Management Agency (FEMA), the Provider Relief Fund COVID-19 Claims Reimbursement to Health Care Providers and Facilities for Testing, Treatment, and Vaccine Administration for the Uninsured, and the Small Business Administration (SBA) and Department of Treasury’s Paycheck Protection Program (PPP) that offset the healthcare related expenses. Provider Relief Fund payments may be applied to the remaining expenses or costs, after netting the other funds received or obligated to be received which offset those expenses. The Provider Relief Fund permits reimbursement of marginal increased expenses related to coronavirus. For example, assume the following:

A $5 increase in expense or cost to provide an office visit is calculated by pre-pandemic cost vs. post-pandemic cost, regardless of reimbursement source:

• Pre-pandemic average expense or cost to provide an office visit = $80
• Post-pandemic average expense or cost to provide an office visit = $85

Examples of reimbursed amounts may include, but not be limited to:

• Example 1. Medicaid reimbursement: $70 (Report $85-$80 = $5 as expense attributable to coronavirus but unreimbursed by other sources)
• Example 2. Medicare reimbursement: $80 (Report $85-$80 = $5 as expense attributable to coronavirus but unreimbursed by other sources)
• Example 3. Commercial insurance reimbursement: $85 (Report $5, commercial insurer did not reimburse for $5 increased cost of post-pandemic office visit)
• Example 4. Commercial insurance reimbursement: $85 + $5 insurer supplemental coronavirus-related reimbursement (Report zero since insurer reimbursed for $5 increased cost of post-pandemic office visit)
• Example 5. COVID-19 Claims Reimbursement to Health Care Providers and Facilities for Testing, Treatment, and Vaccine Administration for the Uninsured: $80 (Report $5 as expense attributable to coronavirus but unreimbursed by other sources)

Finally, the FAQs explain that relief fund payments may be used to support expenses associated with the distribution of a COVID-19 vaccine licensed or approved by the FDA that have not been reimbursed from other sources or that other sources are not obligated to reimburse (which include, but is not limited to, Medicare, Medicaid, and CHIP). If reimbursement does not cover the full expense of administering vaccines, funds may be used to cover the remaining associated costs. Funds may also be used ahead of an FDA-licensed or approved vaccine becoming available–this may include using funds to purchase additional refrigerators, personnel costs to provide vaccinations, transportation costs not otherwise reimbursed.

The complete FAQ document is available here.