As explained in our prior alert, the Department of Health and Human Services (HHS) is offering certain Medicare providers an additional opportunity to apply—by August 28, 2020—for Provider Relief Fund (PRF) distributions from its Phase 2 General Distribution (Phase 2).  

HHS’ original announcement had suggested that providers who experienced change of ownership (CHOW) challenges with receiving funding from the initial $50 billion Phase 1 General Distribution (Phase 1) would be eligible for Phase 2 payments. But revised guidance issued earlier this week (August 11 and 12, 2020) seems to indicate that CHOW-based funding may be limited to Medicare Part A providers who billed Medicare fee-for-service in 2019 and 2020.

To be clear, other Medicare providers—such as Medicare Part B providers—who have already received Phase 1 distributions are still eligible to apply for Phase 2 funding, but HHS has explained that their receipt of payments will be a function of whether their Phase 1 payments approximated 2% of their annual revenue from patient care.  

At this time, it is unclear how HHS might view the Phase 2 application of a non-Medicare Part A provider requesting additional relief in connection with a CHOW, if that provider has already received approximately 2% of its annual revenue through Phase 1 distributions. Still, based on information available as of August 14, it seems that the potential pool of recipients of CHOW-based funding from Phase 2 is not as broad as HHS’ original announcement suggested.

Also this week, HHS provided additional information regarding Phase 2 for Medicaid, Medicaid managed care, Children’s Health Insurance Program, and dental providers. We encourage you to contact your health care counsel to discuss your potential Phase 2 eligibility.