CARES Act Relief Fund: Reporting, Use of Funds, & Reminders

Davis Brown Law Firm

Davis Brown Law Firm

[author: Colleen Anderson]

As guidance continues to change on the Provider Relief Fund payments made to health care providers, a number of providers have asked us about reporting and use of the funds.

Reporting Requirements

Question: Do recipients need to submit a report to HHS for the quarter ending June 30, 2020, as imposed by the terms and conditions for recipients who received more than $150,000 from the Provider Relief Fund?

Answer: No, according to the latest HHS guidance on June 13, 2020, recipients of Provider Relief Fund payments do not need to provide a separate quarterly report to HHS. HHS will develop its own report that complies with the reporting requirements of the CARES Act.

However, recipients will still be required to submit any reports requested by the Secretary in compliance with the terms and conditions for Provider Relief Fund payments (as indicated below), but HHS has not yet issued guidance on the content and due date(s) of such reports. HHS plans to post additional guidance on the Provider Relief Fund: General Information page.

The Terms and Conditions require recipients to maintain certain records and cost documentation including standards for financial management systems, record retention periods and methods for storing such information, rights afforded to HHS including obtaining, transferring, and accessing records, and public access to the recipient’s records concerning Provider Relief Fund payments.

Eligible Reimbursement Items 

Question: What qualifies as “health care related expenses or lost revenues that are attributable to coronavirus?”

Answer: On June 2, 2020, HHS provided a non-exhaustive list of eligible reimbursement items in the FAQ section of the CARES Act Provider Relief Fund webpage. Additionally, as outlined in the Terms & Conditions of the Provider Relief Fund, the grant cannot be used for the following:

  • Pay at a rate greater than Executive Level II
  • Gun control advocacy
  • Lobbying
  • Abortions (with limited exceptions)
  • Embryo research
  • Promotion of the legalization of controlled substances
  • Reimbursement of COVID-19 expenses and lost revenues that have been reimbursed from other sources or that other sources are obligated to compensate for (no double-dipping)

While HHS interprets “health care related expenses or lost revenues attributable to coronavirus” broadly, recipients should proceed with caution. As indicated by the Terms and Conditions, the future reports requested by the Secretary are likely to require highly detailed reporting from recipients to substantiate proper use of CARES Act payments. If a recipient violates any of the Terms and Conditions, HHS can recoup some or all of the payments received and impose fines and penalties, including liability under the False Claims Act.

Until further guidance is issued by HHS indicating what should be included in the reports to the Secretary, recipients should develop policy surrounding the general use of relief funding and mechanisms for tracking the funds to the end recipient. To reduce the risk of non-compliance, recipients should try to limit spending to the items provided by HHS or anything that clearly complies with the Terms and Conditions. When directing funds to expenses/lost revenue not indicated by HHS or when dealing with an ambiguous provision within the Terms and Conditions, recipients should document the rationale behind the decision along with the decision date, as guidance is rapidly evolving.

Ban on “Balance Billing” 

By accepting the Terms & Conditions, recipients agree not to charge an out-of-network patient a greater out-of-pocket fee for coronavirus treatment than it could charge an in-network patient.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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