The Coronavirus Aid, Relief, and Economic Security (CARES) Act, Public Law 116-136, signed into law on March 27, included $100 billion in Public Health and Social Service Emergency Fund appropriations to be distributed by grants or other payment mechanisms to healthcare providers for expenses or lost revenues attributable to COVID-19 not reimbursable by other sources..
Over the last week, the White House and the Department of Health and Human Services (HHS) have announced that $30 billion of the fund would be quickly distributed based on Medicare revenues and that a portion of the fund will be reserved to compensate providers for the cost of providing care for the uninsured. Today, HHS released its first guidance about how it will distribute the initial $30 billion in funding. It is our understanding that approximately $26 billion is expected to be deposited in provider accounts as early as today.
Distribution of $30B to Medicare Providers to Begin Today
The guidance clarifies key information about this first $30 billion installment, including:
- Which providers are eligible? All facilities and providers that received Medicare fee-for-service (FFS) reimbursements in 2019 are eligible.
- How are payments determined? Payments are determined based on the provider’s share of total Medicare FFS reimbursements in 2019.
- Providers can estimate their payments by dividing their 2019 Medicare FFS payments by $484 billion and multiplying that ratio by $30 billion.
- All relief payments are made at the tax identification number (TIN) level (additional information is included in the guidance regarding what this means if the provider is, for example, an employed physician).
- What does an eligible provider need to do to access the funding? Nothing at first. HHS has partnered with UnitedHealth Group (UHG) to distribute the funding quickly. Providers will be paid via Automatic Clearing House account information on file with UHG and will receive either an automatic payment or paper check (whichever they normally receive for FFS reimbursement from the Centers for Medicare & Medicaid Services). Within 30 days of the payment, providers must complete an attestation that they accept the terms and conditions of the payment.
- Do providers have to repay this money? No. HHS is clear that these are payments, not loans, to healthcare providers. (This is in contrast to the Medicare Accelerated and Advance Payment Program.) So long as the funds are used to reimburse expenses or losses that have not been reimbursed from other sources or that other sources are obligated to reimburse, providers can use the money as needed.
- Do providers have to take any subsequent action to retain this money? Yes. Within 30 days of receiving the payment, providers must sign an attestation confirming receipt of the funds and agreeing to specified Terms and Conditions of payment. HHS will open an online portal for signing the attestation beginning the week of April 13, 2020, which will be accessed via its new provider relief fund webpage.
If providers do not wish to adhere to the Terms and Conditions, they must contact HHS within 30 days of receipt of payment and remit the full payment to HHS via instruction to be released shortly.
- Are the Terms and Conditions available for review now? Yes. Among other provisions, the terms and conditions include:
- The recipient will not issue “surprise” medical bills—i.e., for all care for a possible or actual case of COVID-19, the recipient must certify that it will not seek to collect from the patient out-of-pocket expenses in an amount greater than what the patient would have otherwise been required to pay if the care had been provided by an in-network provider.
- The recipient must certify that the payment will only be used to prevent, prepare for, and respond to COVID-19, and shall reimburse the recipient only for healthcare-related expenses or lost revenues that are attributable to COVID-19.
- None of the funds may be used for abortion services or embryo research.
- Not later than 10 days after the end of the calendar quarter, any recipient receiving $150,000 or more in relief funds must submit a report to HHS including information such as:
- The total amount of funds received from HHS from any of the three COVID-19 stimulus bills enacted to date, not just this CARES Act funding
- A list of the projects or activities for which large covered funds were expended or obligated
- The estimated number of jobs created or retained by the project or activity, where applicable
- Information on any level of subcontracts or subgrants awarded by the covered recipient or its subcontractors or subgrantees
The Remaining $70 Billion to Be Distributed in the Near Future
Today’s guidance includes very little information about how HHS will distribute the remaining funds other than that HHS aims to focus on:
- Providers in areas particularly impacted by the COVID-19 outbreak
- Rural providers
- Providers with lower shares of Medicare reimbursement or who predominantly serve Medicaid-enrolled patients
- Providers requesting reimbursement for the treatment of uninsured patients
Use of the Provider Relief Fund to Cover COVID-19 Treatment for the Uninsured
On April 3, HHS Secretary Alex Azar announced during the Trump administration’s daily press briefing that the agency would implement a program to directly reimburse hospitals for COVID-19-related care of uninsured patients using monies from the provider relief fund.
Secretary Azar has indicated that providers will be reimbursed at Medicare rates and will be prohibited from balance billing (where providers charge patients for expenses not reimbursed by insurance).
A recent study projected the potential cost of covering the uninsured under a federal program could range from $13.9 billion to $41.8 billion.
Additional Funding: Medicare Advance and Accelerated Payment Program
Separate and distinct from the $100 billion provider relief fund, the CARES Act also allows CMS to expand its existing Accelerated and Advance Payment Program, which permits providers and some suppliers to advance their Medicare reimbursements, depending on the provider type. Physicians and suppliers are permitted a three-month advance, and hospitals are entitled to six months. The Accelerated and Advance Payment Program is not a grant program; it is in essence a loan and funds must be repaid and the reconciliation will be automatic.
On Thursday, CMS announced it has approved 21,000 of the 32,000 requests received for advance payments to date, providing $51 billion to providers.