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)
  • 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).
  • 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.
  • What are the terms and conditions?
    • Though Administrator 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.
  • 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).

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Please note: This article and any resources presented on the JW Coronavirus Insights & Resources site are for informational purposes only, do not constitute legal or medical advice, and are not a substitute for legal advice from qualified counsel. The laws of other states and nations may be entirely different from what is described. Your use of these materials does not create an attorney-client relationship between you and Jackson Walker. The facts and results of each case will vary, and no particular result can be guaranteed.