Healthcare Client Alert – April 14, 2020
Distribution by HHS of Relief Funds to Medicare Providers
Beginning on Friday, April 10, 2020, the Department of Health and Human Services (HHS) began the immediate delivery of the initial $30 billion in relief funding to certain Medicare providers that are supporting the national response to the COVID-19 pandemic. This is the first disbursement from the total relief fund of $100 billion provided under the Coronavirus Aid, Relief and Economic Security (CARES) Act.
The first share of relief funding is being delivered to Medicare providers, with their specific relief amount being based on their share of 2019 Medicare fee-for-service reimbursements. Unlike the loans being made by the Small Business Administration under the CARES Act and the accelerated Medicare payments being made by CMS under the Accelerated/Advanced Payment Program, the relief funding being paid by HHS to providers are payments—not loans or advance payments that need to be repaid or recouped.
The initial $30 billion distribution is being paid automatically by HHS via Automated Clearing House account information on file with UnitedHealth Group, UnitedHealthcare, or Optum Bank. All facilities and providers that received Medicare FFS reimbursements are eligible for the initial rapid distribution that began last Friday, with payments being made to group practices or healthcare employers (as opposed to individual physicians). These funds are intended to provide relief to Medicare providers who either are in areas heavily impacted by COVID-19 or who are struggling to provide care to healthy patients or have struggled financially due to the cancellation of elective procedures.
We have heard that certain local Medicare providers already received their relief funding from HHS last Friday. Providers that receive a check from CMS for Medicare reimbursement will be provided with a paper check within the next few weeks.
The remaining $70 billion in relief funding will be provided as targeted distributions to providers in geographic areas that have been severely impacted by the COVID-19 outbreak or to providers that serve rural areas or a predominantly Medicaid population.
Upon receipt of these relief funds, each recipient provider will be required to sign an attestation confirming receipt of the funds and agreeing to the terms and conditions of the payment made by HHS, a full list of which are available here. One of these conditions is that the recipient provider must agree not to seek collection of out-of-pocket payments from a COVID-19 patient that are greater than what the patient would have been required to pay if the care had been provided by an in-network provider. Another condition is that the relief funds must be used to prevent, prepare for, and respond to COVID-19 and/or for any health care related expenses or lost revenues that are attributable to COVID-19. HHS is also prohibiting any of the relief funds from being used to pay the salary of any individual, through a grant or other means, at a rate in excess of Executive Level II (i.e. $197,300 for calendar year 2020).
Please note that the relief funds being disbursed by HHS as outlined above are separate and apart from the funds the Centers for Medicare & Medicaid Services (CMS) has already started disbursing to providers under the Accelerated/Advance Payment Program. In the first week of the Accelerated/Advance Payment Program, CMS delivered nearly $34 billion to Medicare providers who applied, with an average turnaround time of 4-6 days from the date the initial application was submitted. For more information about the Accelerated/Advance Program, please see our prior Client Alert, available here or a recent CMS News Release, available here.
Please reach out to a member of our Health Care Practice Group with any questions about the relief funding or if you have any other questions about your practice’s response to the COVID-19 pandemic.
The contents of this publication are intended for general information only and should not be construed as legal advice or a legal opinion on specific facts and circumstances. Copyright 2021.