Chambliss, Bahner & Stophel, P.C.This week, the U.S. Department of Health and Human Services (HHS) issued two additional rounds of updates to its Frequently Asked Questions (FAQs) regarding the $50 billion General Distribution allocation from the Provider Relief Fund (PRF). These FAQ updates were released on June 15 and 16 — although many were backdated to June 12 and 13 — and are the latest examples of HHS’ standard practice of revising and expanding upon its PRF guidance without notice. While many of HHS’ most recent revisions were clerical updates, substantive guidance provides clarity on a variety of issues, including General Distribution ineligibility, quarterly reporting requirements, rejecting a General Distribution, and more.

Key Guidance Issued This Week:

  • Quarterly Reporting Requirement – HHS has clarified that recipients of PRF payments who received at least $150,000 in the aggregate from any statute primarily making appropriations for COVID-19 response are not required to submit separate quarterly reports to HHS and the Pandemic Response Accountability Committee. This reporting requirement was previously included in Section 15011 of the CARES Act, the Terms and Conditions for all PRF payments, and an FAQ issued by HHS on May 6, 2020. It had led qualifying providers to believe that their first quarterly reports would be due by July 10, 2020. These quarterly reports were expected to include — among other information — the total amount of funding received from HHS under the foregoing enumerated Acts and a detailed list of all projects or activities for which large covered funds were expended or obligated. HHS is now advising, however, that the quarterly reporting requirement will be fulfilled by HHS posting the names of payment recipients and their payment amounts on its public website. HHS is also advising that it is working with the Department of the Treasury to reflect the aggregate total of each recipient’s attested to PRF payment on HHS warned providers that they are still required to (1) submit any reports requested by HHS to verify compliance with the payment Terms and Conditions, and (2) submit future reports HHS might require relating to the recipient’s use of its PRF payment.
  • Rejecting a General Distribution Payment – HHS has reissued (in part) language previously included in an FAQ made available on May 14, 2020, and then removed on May 29, 2020, which instructs that providers who believe they were overpaid or received a General Distribution payment in error had until June 3, 2020, to reject the entire payment and submit appropriate revenue documents through the Provider Relief Fund Portal to facilitate HHS determining their correct amount. This new instruction about a reporting deadline that has already passed is somewhat confusing and could be viewed to be contrary to guidance released by HHS on June 8, 2020. The June 8 guidance advised that at the time of accepting a PRF payment, a provider does not need to prove that prior and/or future lost revenues and increased expenses attributable to COVID-19 meet or exceed its PRF payment, and that leftover funds that cannot be used on permissible expenses and losses are to be returned to HHS at the conclusion of the pandemic. Although HHS has not attempted to reconcile this potential ambiguity between these two FAQs, it seems likely that HHS’ most recent guidance would not replace its prior June 8 guidance. In other words, because HHS has released a clear formula for determining a provider’s overall General Distribution payment (the lesser of 2% of a provider’s 2018 – or most recent complete tax year – gross receipts or the sum of incurred losses for March and April of 2020), it may be that HHS views its most recent guidance as addressing those instances in which a provider’s General Distribution payment was clearly an error or an overpayment based upon the established formula. As of the date of this client update, this ambiguity has not been clarified, but we will continue to monitor the most recent guidance from HHS for future instructions.
  • General Distribution Ineligibility – HHS has clarified the circumstances under which a provider who otherwise billed Medicare fee-for-service during the 2019 calendar year may have still been deemed ineligible for payment under the initial $30 billion General Distribution. Such ineligibility includes: (1) the provider is terminated from participation in Medicare or precluded from receiving payment through Medicare Advantage or Part D; (2) the provider is currently excluded from participation in Medicare, Medicaid, and other federal health care programs; (3) the provider currently has its Medicare billing privileges revoked as determined by either the Centers for Medicare & Medicaid Services or the HHS Office of Inspector General; (4) the provider’s TIN identifies both a social security number of an individual Medicare provider and another Medicare provider’s employer identification number; or (5) the provider submitted incomplete banking information and/or personal contact information. This FAQ seems intended to respond to what we can only assume is an overwhelming volume of questions that HHS may be receiving as to why providers who seemed to otherwise qualify for General Distribution funding did not in fact receive payments.  

In addition to updating the General Distribution FAQs, HHS has also provided updates to its Targeted Distribution FAQs, which can be found here.