HHS Releases New Frequently Asked Questions Regarding CARES Act Provider Relief Funds - October 2021

King & Spalding

Last week, HHS released seven new and modified Frequently Asked Questions (FAQs) regarding payments distributed to providers via the CARES Act Provider Relief Fund. The FAQs cover a wide range of topics, including appealing payments made in the Phase 3 distribution, the Phase 4 payment methodology, and more.

The new FAQs broadly discuss the following general categories: (1) general information; (2) terms and conditions; (3) appeals; and (4) Phase 4 distribution. Notably, the FAQs explain that providers who believe their Phase 3 distribution was miscalculated now have until November 12, 2021 at 11:59:59 pm EST to submit the Provider Relief Fund Reconsideration Request Form. HRSA encourages providers to apply early to facilitate review and expedite any revised payments. Any corrections to payment determinations are subject to the availability of funds. More information on the reconsideration process is available here.

The FAQs also provide additional information on the Phase 4 payment methodology. Approximately 75% of the Phase 4 allocation will be used for Base Payments, which are a percentage of a provider’s change in quarterly operating revenues and expenses, as follows:

  • Provider size categories (Small, Medium, and Large) will be based on annual net patient care revenues and will be established after the close of the Phase 4 application.

  • Large providers will receive a Base Payment amount that is a percentage of the change in their quarterly operating revenues and expenses.

  • Base Payments for medium and small providers will include the same percentage of the change in their quarterly operating revenues and expenses plus a scaled supplement, with small providers receiving the greatest amount.

  • No provider will receive a Base Payment that exceeds 100% of their change in quarterly operating revenues and expenses.

Approximately 25% of the Phase 4 allocation will be put towards bonus payments, as follows:

  • Bonus payments will be based on the amount and type of services provided to Medicaid, CHIP, and Medicare beneficiaries from January 1, 2019 through September 30, 2020.

  • HHS will price Medicaid and CHIP claims data at Medicare rates, with some limited exceptions for some services provided predominantly in Medicaid and CHIP.

The new FAQs explain that HRSA will use the applicant’s adjusted gross revenue to categorize providers’ size, and instructs applicants to apply at the filing TIN level and include all subsidiary billing TINs. HRSA will make $12.75 billon (75% of $17 billion) in payments based on changes in operating revenue and expenses and $4.25 billion (25% of $17 billion) in bonus payments.

The complete FAQ document is available here.

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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