HHS Publishes Provider Relief Fund FAQ and Further Guidance

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Please find previous posts summarizing recent agency activity on the Provider Relief fund here: A Guide to the CARES Act Medicare Provider Relief Fund and Breaking News – HHS Announces Further Plans for Provider Relief Fund Monies

The Department of Health and Human Services (“HHS”) continues to provide guidance and instruction regarding the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act Provider Relief Fund. We summarized the initial $30 billion Provider Relief Fund monies here and provided a follow-up breaking news post here regarding an additional $20 billion general allocation and new targeted allocations. In this post we summarize the new guidance and instructions posted by HHS over the weekend of April 25th. 

HHS exhausted the initial $30 billion made available through the Provider Relief Fund and added $20 billion to this “general allocation” for healthcare providers. Providers that previously received payments from HHS’s Medicare Provider Relief Fund related to their Medicare fee-for-service payments in 2019 are eligible to apply for additional funds that are intended to replace a percentage of providers’ annual gross receipts, sales, or program service revenues. While certain providers will receive these payments automatically, many providers will need to submit specific financial information through the HHS General Distribution Portal to receive these additional funds. The portal is currently open and accepting applications. The application will require providers to supply information from IRS tax filings and estimates of lost revenue in March and April of 2020. 

HHS provided a CARES Act Provider Relief Fund Application Guide and an FAQ for healthcare providers to consult before completing the information. We have summarized key provisions of those documents below. 

  1. Eligibility 
    • Healthcare providers that already received a relief fund payment from HHS by 5:00 pm EST, Friday April 24 and agreed to the Terms and Conditions on the attestation portal are eligible to receive funds under this program. Eligible recipients include hospitals, health systems, and independent physician practice groups that previously received HHS relief fund payments. 
  2. Grant or Loan 
    • Provided that the healthcare provider meets the Provider Relief Fund Terms and Conditions, amounts received under the program will not need to be repaid. 
  3. Application Deadlines
    • No deadline is listed at this point. HHS will be processing applications in batches every Wednesday at 12:00 pm EST. The program is not being administered on a first come first serve basis. While HHS’s stated intention is to give all applicants equal consideration regardless of when they apply, we expect the funds will be depleted before all providers can apply due to the $20 billion funding limit. Therefore, recommend that providers submit their application sooner rather than later. 
  4. Necessary Application Information: 
    • A provider’s “Gross Receipts or Sales” or “Program Service Revenue” as submitted on its federal income tax return. 
    • Estimated revenue losses in March and April 2020 due to COVID-19; 
    • A copy of the provider’s most recently filed federal income tax return; and 
    • A list of the TINs of the providers subsidiary organizations that have received relief funds but that do not file separate tax returns. 
  5. Maximum Award Amount 
    • There is no set formula for determining the amount of money for which a provider is eligible. However, the award amount will be based, in part, on a provider’s lost revenue for March and April 2020. We strongly advise that applicants accurately report and reasonably project these amounts, as failing to do so could result in liability for providers once HHS begins to audit program recipients. 
  6. Application Process
    • Healthcare providers will need to complete the application online. After submitting the application, providers will receive a confirmation email that the application is complete. HHS will not provide any further information. If HHS approves a provider’s application the funds will be distributed within 10 business days. 
    • HHS has said that they will not be answering direct inquiries about the program. To the extent that you have questions about the application, we recommend that you consult with legal counsel prior to submitting your application. 
  7. Program Decisions Final
    • There is no appeals or dispute process for this program. We recommend that applicants are as thorough as possible in filling out the applications to minimize the chance of an unfavorable decision. 
  8. Terms and Conditions 
    • In order to apply for additional funds from the $20 billion general allocation, providers must attest to the Terms and Conditions in advance. This is a departure from those providers that received automatic payments and have 30 days to choose to attest to the Terms and Conditions or to return the funds. 
    • Presently, the Terms and Conditions under $20 billion general allocation are substantially similar to those under the initial $30 billion allocation. One notable difference is that recipients under this new program, by agreeing to the Terms and Conditions, will be consenting to HHS publicly disclosing the amount that providers receive under the CARES Act Public Health and Social Services Relief Fund, i.e., HHS administered relief funds. 
    • We remind providers that, for the time being, all PDF Terms and Conditions appear to be dynamic, as opposed to static, documents.
  9. Reporting Requirements 
    • 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. Specifically, HHS added an additional requirement to the Terms and Conditions applicable to the $20 billion general allocation that recipients submit general revenue data for calendar year 2018. 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.

The CARES Act Provider Relief Fund Application Guide and FAQ relate mostly to the $20 billion general distribution. HHS has not published significant information related to the targeted allocations summarized in our previous post. However, HHS has created separate Terms and Conditions for those that apply for and accept money related to the targeted allocation for treatment of the uninsured. Additionally, HHS created separate Terms and Conditions for those providers that receive payment from the Provider Relief Fund to provide COVID-19 testing and testing related items and services to Families First Coronavirus Response Act uninsured individuals.

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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