Under the CARES Act, Congress set aside $100 billion for the Public Health and Social Services Emergency Fund (the Provider Relief Fund) to reimburse healthcare providers for healthcare-related expenses or lost revenues attributable to the Coronavirus (COVID-19); the Paycheck Protection Program and Health Care Enhancement Act, which President Trump signed into law, will provide an additional $75 billion to the Provider Relief Fund. Eligible healthcare providers that provide diagnoses, testing, or care for individuals with possible or actual cases of COVID-19 may receive grants of funds for expenses related to, among other things, medical supplies and equipment, increased workforce and trainings, surge capacity, and construction of temporary structures. However, these funds may not be used to reimburse expenses that other funding sources have reimbursed or are obligated to reimburse. Healthcare providers in the Provider Relief Fund’s programs should maintain proper records and cost documentation to show compliance with the program and eligibility for reimbursements.

The Department of Health and Human Services (HHS) has set aside $50 billion as a general allocation, $30 billion of which was distributed directly to healthcare providers in early April 2020 in proportion to their respective shares of 2019 Medicare Fee-For-Service program reimbursements. Within 30 days of receipt of the funds, HHS requires each recipient to complete an attestation confirming receipt of the funds and to agree to the Provider Relief Fund’s terms and conditions. The terms and conditions outline certifications that each recipient must make, including that it provides or has provided after January 31, 2020 diagnoses, testing, or care for individuals with possible or actual cases of COVID-19 and that it will only use the funds to prevent, prepare for, or respond to COVID-19. Further, the terms and conditions identify prohibited uses of the funds, including payment of lobbying expenses, and require that healthcare providers abstain from “balance billing” any patient for COVID-19 treatment. In addition, each recipient must submit quarterly reports documenting the use of the funds received under the Provider Relief Fund.

On April 22, 2020, HHS provided additional guidance regarding how it will distribute the remaining funds.

  1. The remaining $20 billion of the general allocation will be distributed under the same terms and conditions as the earlier $30 billion allocation so that the whole $50 billion general allocation will be allocated in proportion to each healthcare provider’s share of 2018 net patient revenue.
  2. HHS will provide claims reimbursements for treatment of uninsured COVID-19 patients at Medicare rates. Providers can register for this reimbursement program beginning on April 27, 2020 and begin submitting claims in early May 2020.
  3. $10 billion will be allocated for targeted distribution to hospitals in areas that have been particularly impacted by COVID-19. By 3:00 PM ET on April 25, 2020, hospitals must provide information related to the total number of ICU beds as of April 10, 2020 and the total number of patients admitted with a positive COVID-19 diagnosis during the period from January 1, 2020 to April 10, 2020. HHS will use this data to determine which facilities will qualify for the distributions; however, supplying this information does not guaranty distribution of payments to a healthcare provider under this program.
  4. $10 billion will be allocated to rural health clinics and hospitals on the basis of their operating expenses.
  5. $400 million will be allocated for Indian Health Service facilities on the basis of their operating expenses.

We invite you to visit “PilieroMazza’s COVID-19 Client Resource Center” to access resources that will help healthcare providers and other businesses navigate the COVID-19 pandemic.

Francis Massaro, the author of this blog, is a member of the Firm’s Business & Transactions Group and chair of the Healthcare Team.