HHS Relief FundsApril 17, 2020, 12:50 PM
Good News for Providers Who Received HHS Relief Funds and Hopeful News for Those Who Have Not!
On Friday, April 10, 2020, the Department of Health and Human Services (HHS) began the immediate delivery of $30 billion in relief funding to providers who provided Medicare fee-for-service services in 2019. This is the first disbursement from the total relief fund of $100 billion provided under the Coronavirus Aid, Relief and Economic Security (CARES) Act. We sent out an alert to our healthcare clients about the disbursement of the HHS stimulus funds on Tuesday, which can be accessed here.
For Those of You That Received the HHS Funds
Since the funds were distributed, more information about the eligible provider pool, attestation requirements, and program Terms and Conditions have come to light. Providers who received these stimulus funds have 30 days from the date of receipt to either return the funds or agree to the Terms and Conditions by completing the electronic attestation on HHS’s website. Failure to return the funds or complete the attestation in such 30-day time frame will be deemed acceptance of the Terms and Conditions. The Attestation Portal is now open and is available here.
Despite these funds being described by government officials as “no strings attached,” there are quite a lot of conditions and requirements associated with retention and use of the funds, as described in the official Terms and Conditions. We heard from many providers and stakeholders that the Terms and Conditions were vague and recipients of the funds were unsure whether they met some of the requirements. For instance, the Terms and Conditions initially stated that in order to be eligible to retain the funds, the recipient needed to provide diagnoses, testing, or care for individuals with possible or actual cases of COVID-19. Many questioned whether this meant the recipient had to treat patients for COVID-19. Since then, HHS has clarified that in order to meet such requirement, “Care does not have to be specific to treating COVID-19” and that “HHS broadly views every patient as a possible case of COVID-19.” This is great news and broadens the pool of eligible recipients.
One of the other requirements is that you need to use the funds to prevent, prepare for, and respond to coronavirus and to reimburse you only for health care related expenses or lost revenues that are attributable to coronavirus. This could include expenses or lost revenues incurred as a result of canceling elective procedures, purchasing additional personal protective equipment, or even sanitizing your practice locations more frequently or intensely than in the normal course of business.
You must also certify that you will not use the funds for expenses and losses for which you received reimbursement or payment from other sources. This requirement will likely create the most administrative burden for recipients as there are specific reporting, recordkeeping, and cost documentation requirements in the Terms and Conditions. Stakeholders are also discussing how HHS will likely be auditing practices—particularly those who received more than $150,000 in HHS stimulus funds—to verify that their use of the funds was proper. It is advisable that providers deposit their HHS funds in a separate bank account and/or discuss with their financial teams about setting up a separate “COVID Cost Center” to track expenses, losses, and sources of funding attributable to COVID-19. For instance, if a practice has received a PPP loan from the SBA and has also received HHS stimulus funding, then the practice needs to carefully track how each of those funds are expended and ensure that the HHS funding is not first used to pay for expenses for which the PPP loan is required to be used. If you have received business interruption insurance payments, FEMA funding, or any other funding sources attributable to COVID-19, you need to carefully track your use of those funds in a similar manner.
We urge you to review the attestation requirements and Terms and Conditions in full very carefully. There are various other specific restrictions on the use of the funds—for instance, the funds cannot be used for executive compensation in excess of a certain amount, embryo research, or abortions. We also urge you to carefully track your practice’s financial response to COVID-19—including all expenses and losses attributable to the pandemic, along with all sources of income received by the practice from governmental agencies or otherwise.
For Those That Have Not Received the HHS Funds
If you provided Medicare fee-for-service services in 2019 and do not believe you have received these funds, check your account again for a payment from HHS titled “HHSPAYMENT.” If you receive Medicare reimbursement by check, then your stimulus funds will be sent to you by check over the next few weeks.
With respect to the remaining $70 billion in relief funding available under the CARES Act, HHS states that “The Administration is working rapidly on targeted distributions that will focus on providers in areas particularly impacted by the COVID-19 outbreak, rural providers, providers of services with lower shares of Medicare reimbursement or who predominantly serve the Medicaid population, and providers requesting reimbursement for the treatment of uninsured Americans.”
In response to outcry from areas hit particularly hard by COVID-19, CMS has indicated that the next tranche of funding would be allocated specifically to providers in COVID-19 hotspots. After that trance is distributed, it is expected another tranche will be distributed among providers with high Medicaid patient volume (such as hospitals, pediatric practices, and OBGYN practices). It is nearly certain that these distributions will come with similar terms and conditions as those posted for recipients of the first round of funding.
Please do not hesitate to reach out if you have any questions about HHS stimulus funding or any other issues impacting your practice.