The Department of Health and Human Services (“HHS”) announced plans for additional allocations of the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act Provider Relief Fund on Wednesday, April 22, 2020. The CARES Act provided $100 billion to be distributed by HHS to healthcare providers. The initial tranche of $30 billion was distributed to providers on April 10 and April 17. More information on that initial distribution can be found here.
The newest payments from the $100 billion Provider Relief Fund can be largely broken down into 4 categories: (1) general allocation, (2) targeted allocations for hot spots, (3) rural provider allocation and (4) Indian Health Service allocation. Although the allocations are presented in an organized fashion on the HHS Provider Relief Fund website, the details are limited, especially in the general allocation category. The information below is current as of 11 a.m. Eastern Daylight Time, Friday, April 24, 2020 — but HHS is updating its information frequently. Despite these updates, many questions remain, and we will pass along further information as we receive answers to those questions.
1. General Allocation
“$50 billion of the Provider Relief Fund is allocated for general distribution to Medicare facilities and providers impacted by COVID-19, based on eligible providers' 2018 net patient revenue. The initial $30 billion was distributed between April 10 and April 17, and the remaining $20 billion is being distributed beginning Friday, April 24.”
- “To expedite providers getting money as quickly as possible, $30 billion was distributed immediately, proportionate to providers' share of Medicare fee-for-service reimbursements in 2019. On Friday, April 10, $26 billion was delivered to bank accounts. The remaining $4 billion of the expedited $30 billion distribution was sent on April 17. This simple formula used the data on-hand to get the money out the door as quickly as possible. The Administration was transparent and upfront additional funds would be going out quickly to help providers with a relatively small share of their revenue coming from Medicare fee-for-service, such as children's hospitals.”
- NMRS Commentary: A guide to this initial allocation can be found here.
- “HHS will begin distribution of the remaining $20 billion of the general distribution to these providers on April 24 to augment their allocation so that the whole $50 billion general distribution is allocated proportional to providers' share of 2018 net patient revenue.”
- NMRS Commentary: This statement indicates that $20 billion is forthcoming to providers, but it sparks many questions regarding how money will be distributed. HHS’s promise to “augment” providers’ allocations suggests that the additional monies will be going to those providers that received payments from the initial $30 billion. However, the statement that the intent is to make sure providers receive monies based on their 2018 net patient revenue is confusing. It’s unclear why HHS references 2018, as opposed to 2019, net patient revenue and what “net patient revenue” means. This could be calculated in any number of ways. Further, it’s unclear why a 2018 metric is referenced when the initial $30 billion was distributed based on 2019 metrics.
- “On April 24, a portion of providers will automatically be sent an advance payment based off the revenue data they submit in CMS cost reports. Providers without adequate cost report data on file will need to submit their revenue information to a portal opening this week [week of April 22] linked on this page for additional general distribution funds.”
- NMRS Commentary: This statement creates a host of questions. How will providers know if they have adequate cost report data on file? Should providers assume they do not have adequate data on file if they do not receive a payment on Friday, April 24? This statement suggests that providers that do not submit cost reports would be excluded from this $20 billion general allocation. However, non-cost report providers received monies from the initial $30 billion. It is not clear how to reconcile the language about “augmenting” these providers’ allocations with the fact that the initial allocations went to providers that do not submit cost reports.
- "Providers who receive their money automatically will still need to submit their revenue information so that it can be verified."
- NMRS Commentary: This statement suggests providers might receive money automatically without having adequate cost report data on file. If that is the case, it is unclear what method HHS will use to disburse money (e.g., by direct deposit or check). It also brings up more questions; for example, are providers that do not submit cost reports, like physician groups, going to receive any automatic payments? Should non-cost report providers submit revenue information via the portal once it is live? Will there be detailed instructions regarding exactly what revenue information will be required for verification?
- “Payments will go out weekly, on a rolling basis, as information is validated, with the first wave being delivered at the end of this week (April 24, 2020).”
- NMRS Commentary: For those providers that do not receive automatic payments and must submit revenue data via a portal for validation, it is unclear if there is a deadline for submission. It is also unclear if monies for this fund will be replenished assuming they run out at some point.
- “Providers who receive funds from the general distribution have to sign an attestation confirming receipt of funds and agree to the terms and conditions of payment and confirm the CMS cost report. Click here to sign the attestation and accept the Terms and Conditions.”
- NMRS Commentary: The above link is the same one that was made available for providers that received payments under the initial $30 billion tranche. We note that HHS has added a confirmation of CMS cost report to the attestation. The requirement to “confirm the CMS report” is vague and also raises a question about those providers who have pending cost report appeals. Could those providers still “confirm” their cost report through the attestation portal? Additionally, we note it is unclear if this attestation is also required for, or applies to, any monies providers might receive from the targeted allocations described below.
- “The Terms and Conditions - PDF also include other measures to help prevent fraud and misuse of the funds. All recipients will be required to submit documents sufficient to ensure that these funds were used for healthcare-related expenses or lost revenue attributable to coronavirus. There will be significant anti-fraud and auditing work done by HHS, including the work of the Office of the Inspector General.”
- NMRS Commentary: We underscore that the PDF Terms and Conditions contain significant record keeping and reporting requirements. Providers should prioritize compliance with these requirements, as HHS added the following statement to its webpage: “All recipients will be required to submit documents sufficient to ensure that these funds were used for healthcare-related expenses or lost revenue attributable to coronavirus.” This is a reminder that providers should keep records that comply with the PDF Terms and Conditions and other applicable laws and regulations. HHS updated the PDF Terms and Conditions on Thursday, April 23 to include the requirement that recipients submit general revenue data for calendar year 2018 when receiving payment from the $20 billion general distribution tranche. Additionally, updated Terms and Conditions indicate that there will be future program guidance directed to all recipients of monies regarding how, and in what form, to submit reports to the Secretary regarding compliance with Terms and Conditions.
HHS has also published statements regarding the significant enforcement work surrounding the issuance of these monies. The following statement was added to the Provider Relief Fund webpage on Wednesday, April 22: “There will be significant anti-fraud and auditing work done by HHS, including the work of the Office of the Inspector General.” Further, the Terms and Conditions were updated on Thursday, April 23 to indicate that “any deliberate omission, misrepresentation, or falsification of any information contained in this Payment application or future reports may be punishable by criminal, civil, or administrative penalties, including but not limited to revocation of Medicare billing privileges, exclusion from federal health care programs, and/or the imposition of fines, civil damages, and/or imprisonment.” We are likely to see more guidance regarding enforcement in the coming days and weeks.
- “President Trump is committed to ending surprise bills for patients. As part of this commitment, as a condition to receiving these funds, providers must agree not to seek collection of out-of-pocket payments from a presumptive or actual COVID-19 patient 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.”
- NMRS Commentary: This condition is also included in the Terms and Conditions PDF and attaches to monies providers received in the initial $30 billion disbursement.
2. Targeted Allocation for Hot Spots
“$10 billion will be allocated for a targeted distribution to hospitals in areas that have been particularly impacted by the COVID-19 outbreak. As an example, hospitals serving COVID-19 patients in New York, which has a high percentage of total confirmed COVID-19 cases, are expected to receive a large share of the funds.
- Hospitals should apply for a portion of the funds by providing four simple pieces of information via an authentication portal before 3:00 PM ET, Saturday, April 25, 2020. This portal is live, and hospitals have already been contacted directly to provide this information.
- Hospitals will need to provide:
- Tax Identification Number
- National Provider Identifier
- Total number of Intensive Care Unit beds as of April 10, 2020
- Total number of admissions with a positive diagnosis for COVID-19 from January 1, 2020 to April 10, 2020
- The authentication and data-sharing process should take less than five minutes via a system that should be familiar to most hospitals.
- This information is necessary for the government to determine what facilities will qualify for a targeted distribution. Supplying this information does not guarantee receipt of funds from this distribution.
- The Administration will use the data it receives to distribute the targeted funds to where the impact from COVID-19 is greatest. The distribution will take into consideration the challenges faced by facilities serving a significantly disproportionate number of low-income patients, as reflected by their Medicare Disproportionate Share Hospital (DSH) Adjustment.”
- NMRS Commentary: HHS originally announced a deadline of midnight PT, Thursday, April 23 to upload information to the authentication portal. Late in the evening of April 23, HHS issued a press release that it would extend the deadline to 3 PM ET, Saturday, April 25. The decision to extend the deadline was made in consultation with hospitals and hospital associations and HHS has promised that the extended deadline will not delay the start of payments to high-impact areas. HHS expects payments to begin the week of April 27, 2020. We highlight that the portal through which hospitals must apply is live and hospitals have already been contacted to prompt their submissions.
3. Targeted Allocation for Rural Providers
“$10 billion will be allocated for rural health clinics and hospitals, most of which operate on especially thin margins and are far less likely to be profitable than their urban counterparts.
- This money will be distributed as early as next week on the basis of operating expenses, using a methodology that distributes payments proportionately to each facility and clinic.
- This method recognizes the precarious financial position of many rural hospitals, a significant number of which are unprofitable.
- Rural hospitals are more financially exposed to significant declines in revenue or increases in expenses related to COVID-19 than their urban counterparts.”
- NMRS Commentary: It is unclear how HHS plans to access rural providers’ operating expenses. It is also unclear if HHS will publish its methodology for distributions.
4. Targeted Allocation for Indian Health Service
“Recognizing the strain experience[d] by the Indian Health Service, $400 million will be allocated for Indian Health Service facilities, distributed on the basis of operating expenses. Indian Country is also being impacted by COVID-19.
- This money will be distributed as early as next week on the basis of operating expenses for facilities.
- This complements other funding provided to IHS and work we've done to expand IHS capacity for telehealth.”
- NMRS Commentary: Again, it is unclear how HHS plans to access Indian Health Services facilities’ operating expenses. It is also unclear if HHS will publish its methodology for distributions. We will be tracking this to see if more information will be made available.
In addition to the 4 buckets of money described above, HHS has included an additional targeted allocation for treatment of the uninsured. Although indicating that this money would come from the $100 billion Provider Relief Fund, HHS did not specify an exact amount that would be reserved for this allocation. “Every health care provider who has provided treatment for uninsured COVID-19 patients on or after February 4, 2020, can request claims reimbursement through the program and will be reimbursed at Medicare rates, subject to available funding.” (HHS Provider Relief website).
- In order to take advantage of this, providers will need to register for the program beginning on April 27, 2020. Providers will need to enroll as a provider participant, check patient eligibility and benefits, submit patient information and submit claims. Eligible providers may begin submitting claims in early May 2020 and will receive payment via direct deposit. As a condition of this money, providers cannot balance bill any patient for COVID-19-related treatment. More information is available from the Human Resources and Services Administration (“HRSA”), including a program timeline and what is covered. HRSA states that “much more information” will be available on its website starting April 27, 2020.
HHS announced that it would make additional allocations available for select providers, such as skilled nursing facilities, dentists, and providers that solely take Medicaid. This additional assistance would be considered further, separate funding from any monies such providers previously received.
We expect HHS will continue to update the Provider Relief Fund website in the coming days with more information regarding these additional allocations. Congress has passed the Paycheck Protection Program and Health Care Enhancement Act, a new funding package that adds $75 billion for health care providers, and President Trump signed that into law today, Friday, April 24, 2020. Given this new allotment for health care providers, we may see further monies added to the current Provider Relief Fund allocations or new allocations created.
HHS periodically updates the Provider Relief Fund webpage, so we encourage providers to check it frequently. Significantly, the PDF Terms and Conditions that are linked to the website have been periodically updated, without announcement. We highlight this so that providers are aware that, for the time being, the PDF Terms and Conditions appears to be a dynamic, as opposed to static, document.