Update on CARES Act Rollout: First Payments from CARES Provider Relief Fund

April 13, 2020 | Insights



By Denise Rose

Last week, CMS Administrator Seema Verma announced that approximately $30 billion from the CARES Act’s $100 billion hospital relief fund would be distributed to providers directly, based on past Medicare revenues. On April 10, 2020, HHS issued a bulletin outlining the distribution of those funds.

  • Who is eligible?
    • All facilities and providers that received Medicare fee-for-service (FFS) reimbursements in 2019
    • Payments will be made to the billing organization according to its Taxpayer Identification Number (TIN)
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  • How is payment allocated?
    • Payments are based on each provider’s proportion of the Medicare FFS reimbursement total in 2019, which CMS has identified as $484 billion.
    • To get a payment estimate, providers can divide their 2019 Medicare FFS (not including Medicare Advantage) payments received by $484,000,000,000, and multiply that ratio by $30,000,000,000 ($30 billion).
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  • How is payment being distributed?
    • HHS is working with UnitedHealth Group (UHG) to distribute payments.
    • Direct deposits will come via Optum Bank, with  “HHSPAYMENT” as the payment description
    • Paper checks may take a few weeks.
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  • What are the terms and conditions?
    • Though Adminstrator Verma characterized the grants as “no strings attached,” there are some important requirements for payment.
      • Within 30 days of receiving the payment, providers must sign an attestation confirming receipt of the funds and agreeing to the terms and conditions of payment.
      • CMS will operate a web portal for signing the attestation beginning the week of April 13, 2020.
    • The terms and conditions are attached here, and contain requirements that:
      • For “all care for a possible or actual case of COVID-19,” Recipient 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 Recipient.
      • Payment will only be used to prevent, prepare for, and respond to coronavirus, and will reimburse only expenses or lost revenues attributable to coronavirus.
      • Payment will not be used to reimburse expenses or losses that are reimbursed or obligated to be reimbursed by other sources.
      • If Recipient is receiving more than $150,000 under this and any other COVID-19 relief legislation combined, Recipient must submit a report to the Secretary and the Pandemic Response Committee within 10 days after the end of each calendar quarter with:
        • total amount of funds received from HHS under all COVID-19 relief legislation
        • the amount of funds received that were expended or obligated for each project or activity
        • detailed list of all projects or activities for which large covered funds were expended or obligated, including:
          • the name and description of the project or activity,
          • the estimated number of jobs created or retained by the project or activity,
          • detailed information on any level of sub-contracts or subgrants.
      • Recipient will keep appropriate cost documentation, submit compliance reports as specified by the Secretary in future program instructions, and submit to future audits.
    • There are additional restrictions on how funds may be used.  Limitations include but are not limited to the following:
      • Funds may not be used to pay individual salaries in excess of Executive Level 2.
      • Funds may not be used to advocate or promote gun control.
      • Funds may not be used for lobbying.
      • Funds may not be used for abortion or embryo research.
      • Funds may not be used to promote legalization of controlled substances.
      • Funds may not be used for any computer network unless the network blocks pornography.
      • Funds may not be used to support needle exchanges.
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  • CMS has issued a preliminary report detailing payments made to date.
    • In Texas, 24,307 providers have been paid a total of $2,089,066,452.
  • CMS also reiterated its plan to dedicate a portion of the $100 billion Provider Relief Fund to reimbursing providers for COVID-19 treatments for the uninsured at Medicare rates.
    • While details are not yet available, today’s guidance specifies that “As a condition [of receiving those funds], providers are obligated to abstain from ‘balance billing’ any patient for COVID-related treatment.” (emphasis added).

Meet Denise

Denise Rose has been working in and around the Texas Capitol for over a decade. She is extremely well-versed in the legislative and appropriations processes, and has cultivated relationships throughout the Texas Capitol and in state agencies. Denise provides effective strategic counsel to clients on a wide variety of issues, including but not limited to Medicaid and hospital finance, special utility districts, occupational licensing, health care quality, and agency rulemaking processes and requests for proposals.

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Please note: This article and any resources presented on the Jackson Walker Coronavirus microsite do not constitute legal or medical advice.