The CARES Act, signed by the President on March 27, 2020, appropriated $100 billion in relief funds for hospitals and other health care providers. Pursuant to guidance from the U.S. Department of Health and Human Services (HHS), “this funding will be used to support healthcare-related expenses or lost revenue attributable to COVID-19 and to ensure uninsured Americans can get testing and treatment for COVID-19.”

On April 10, 2020, as part of the Public Health and Social Services Emergency Fund (PHSSEF Relief Funds), HHS automatically distributed the first tranche of $30 billion to health care providers enrolled in Medicare, allocated proportionally based on their respective 2019 Medicare fee-for-service (FFS) reimbursements.  Any health care provider that received Medicare FFS reimbursements in 2019 (including, but not limited to, physicians and medical practices) received a portion of the $30 billion distribution.

These distributions are payments to health care providers, not loans.  Accordingly, they do not need to be repaid, provided that, within 30 days of receiving the payment, the provider certifies: (i) receipt of the PHSS Relief Funds; and (ii) that they will abide by HHS’ Terms and Conditions, which include certain restrictions on use of the funds and a certification that the provider currently provides, or provided after January 31, 2020, diagnoses, testing or care for individuals with possible or actual cases of COVID-19.

 The remaining $70 billion in PHSSEF Relief Funds are anticipated to be targeted distributions “focusing on providers in areas particularly impacted by the COVID-19 outbreak, rural providers, providers of services with lower shares of Medicare reimbursement or who predominantly serve the Medicaid population, and providers requesting reimbursement for the treatment of uninsured Americans.” As of April 14, 2020, there is no further guidance on how and when this additional $70 billion will be distributed.

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