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CARES Act Provider Relief Fund

Krugliak, Wilkins, Griffiths & Dougherty Co., L.P.A.

As part of the CARES Act, $100 billion in relief funds were allocated to hospitals and other healthcare providers to support healthcare-related expenses or lost revenue attributable to the COVID-19 pandemic.  Of this $100 billion, $30 billion is being distributed immediately, with payments arriving via direct deposit as early as April 10, to eligible providers.  These payments are not loans and there is no mandate of repayment.  The primary goal of this rapid distribution of funds is to provide relief to providers in areas heavily impacted by the COVID-19 pandemic and providers who are struggling to keep their doors open due to healthy patients delaying care and cancelled elective services.  The relief fund payments are being administered by the Department of Health and Human Services (“HHS”).

The following summarizes the terms of eligibility, the determination of the amounts to be distributed, and the steps that providers must take in relation to these relief funds:

(1)   Providers who are eligible for the initial $30 billion:

(a)  All facilities and providers that received Medicare fee-for-service (FFS) reimbursements in 2019 are eligible for this initial distribution.

(b)  Payments to practices that are part of larger medical groups will be sent to the group's central billing office.

(c)  All relief payments are made to the billing organization according to its Taxpayer Identification Number (TIN).

(d)  As a condition to receiving these funds, providers 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 otherwise been required to pay if the care had been provided by an in-network provider.

(e)  If a provider ceased operation as a result of the COVID-19 pandemic, they are still eligible to receive funds so long as they provided diagnoses, testing, or care for individuals with possible or actual cases of COVID-19. “Care” does not have to be specific to treating COVID-19. HHS broadly views every patient as a possible case of COVID-19.

(2)  The determination of payment distributions:

(a)  Providers will be distributed a portion of the initial $30 billion based on their share of total Medicare FFS reimbursements in 2019. Total FFS payments were approximately $484 billion in 2019.

(b)  A provider can estimate their payment by dividing their 2019 Medicare FFS (not including Medicare Advantage) payments they received by $484,000,000,000, and multiply that ratio by $30,000,000,000. Providers can obtain their 2019 Medicare FFS billings from their organization's revenue management system.

(c)  Example: A provider that billed Medicare FFS $5 million in 2019, would receive $309,917.36 (i.e. $5,000,000/$484,000,000,000 x $30,000,000,000).

(3)  Steps to be taken by an eligible provider:

(a)  HHS has partnered with UnitedHealth Group (UHG) to provide rapid payment to providers eligible for the distribution of the initial $30 billion in funds.

(b)  Providers will be paid via Automated Clearing House account information on file with UHG or the Centers for Medicare & Medicaid Services (CMS).

  • The automatic payments will come to providers via Optum Bank with "HHSPAYMENT" as the payment description.
  • Providers who normally receive a paper check for reimbursement from CMS, will receive a paper check in the mail for this payment as well (if not already, then within the next few weeks).

(c)  The payment by HHS of this initial distribution of funds is conditioned on the healthcare provider's acceptance of the Relief Fund Payment Terms and Conditions (see this link or copy and paste into your browser:  https://www.hhs.gov/sites/default/files/relief-fund-payment-terms-and-conditions-04132020.pdf), which acceptance must occur within 30 days of receipt of payment (see below).

(d)  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 (see the CARES Act Provider Relief Fund Payment Attestation Portal thru this link or copy and paste into your browser:  https://covid19.linkhealth.com/#/step/1).  Not returning the payment within 30 days of receipt will be viewed as acceptance of the Terms and Conditions.  To return the funds, the provider must do the following: (i) contact HHS within 30 days of receipt of payment and (ii) then remit the full payment to HHS as instructed. The CARES Act Provider Relief Fund Payment Attestation Portal will guide providers through the attestation process to accept or reject the funds.

(4)  Application of this relief to different types of providers:

(a)  All relief payments are being made to providers and according to their tax identification number (TIN). For example:

(i)  Large Organizations will receive relief payments for each of their billing TINs that bill Medicare. Each organization should look to the part of their organization that bills Medicare to identify details on Medicare payments for 2019 or to identify the accounts where they should expect relief payments.

(ii)  Employed physicians should not expect to receive an individual payment directly. The employer organization will receive the relief payment as the billing organization.

(iii) Individual physicians and providers in a group practice are unlikely to receive individual payments directly, as the group practice will receive the relief fund payment as the billing organization. Providers should look to the part of their organization that bills Medicare to identify details on Medicare payments for 2019 or to identify the accounts where they should expect relief payments.

(iv)  Solo practitioners who bill Medicare will receive a payment under the TIN used to bill.

NOTE: This general summary of the law should not be used to solve individual problems since slight changes in the fact situation may require a material variance in the applicable legal advice.

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