What We Know Now: CARES Act Provider Relief Fund Distributions to Date

COVID-19 Update

The Department of Health and Human Services (HHS) has issued ongoing announcements and updates with respect to the Provider Relief Fund—that is, the $175 billion in direct-to-provider funding authorized by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act)1 and the Paycheck Protection Program and Health Care Enhancement Act.2 The funds that HHS has made available to date do not account for the full $175 billion and additional distribution announcements are expected in the future.

HHS has issued allocations to various groups of providers in waves. In some instances, providers must apply for these funds, and in other instances HHS distributed the funds automatically. Over time, HHS has reclassified Provider Relief Fund payments into a schema of two types of distributions: the General Distribution, through which providers receive at least 2% of annual patient revenue; and Targeted Distributions, through which providers may receive payments above and beyond their General Distribution payment.

Targeted Distributions include, for example, payments for rural providers, hot spot hospitals, and safety net hospitals. Separately, providers also may receive claims reimbursement for providing COVID-19 testing and treatment services to uninsured individuals.3

What’s the Latest?

In the last several weeks, HHS has provided a handful of key updates related to the Provider Relief Fund. These include:

  • HHS extended eligibility for Phase 2 of the General Distribution to assisted living facilities (ALFs). HHS announced that ALFs that do not bill Medicare or Medicaid and therefore have not otherwise been eligible for General Distribution payments are now eligible for Phase 2 of the General Distribution (provided they meet all other eligibility criteria, enumerated in the Provider Relief Fund FAQs).
  • HHS extended until September 13 the deadline for eligible providers to apply for Phase 2 of the General Distribution. Phase 2 is generally open to Medicare, Medicaid, CHIP, and dental providers—and the newly-eligible ALF providers noted above—that have not yet received General Distribution payment(s) collectively amounting to at least 2% of patient revenue.
  • Providers receiving requests from HHS to submit revenue data by September 13 should do so to avoid missing out on potential future payments. A new Provider Relief Fund FAQ reflects that some providers are receiving emails from HHS requesting financial information in response to the payment HHS issued to the provider as part of Phase 1 of the General Distribution. HHS indicates that this is because the Terms and Conditions require providers that received a payment from the $20 billion second tranche from Phase 1 of the General Distribution to submit revenue information regarding this payment. HHS does not have that information from some providers, "due in some instances to system issues." In order to be considered for an additional payment, providers must submit this information by September 13, 2020. The FAQ is unclear as to whether this limitation on additional payments refers to eligibility for any Provider Relief Fund payment or any further General Distribution payment (for which applications are due September 13).
  • HHS distributed the first approximately $2.5 billion of a new $5 billion distribution for skilled nursing facilities and nursing homes with six or more certified beds. Unlike other lump-sum Provider Relief Fund distributions to date (which can be used to cover lost revenues and expenses attributed to COVID-19), these funds may be used only for infection control expenses described in the Terms and Conditions for this distribution.4 

Complete information—including a chart showing Provider Relief Fund distributions to date—is available through  Insights@ManattHealth, which delivers tailored analyses and deep insights into health law and policy developments. Available by subscription, Insights@ManattHealth provides a personalized, user- friendly experience that gives you easy access to Manatt Health’s robust library of cutting-edge thought leadership, including: weekly memos on federal and state policy changes; detailed summaries of Medicaid, Medicare and Marketplace regulatory and subregulatory guidance, as well as synopses of healthcare litigation developments; 50-state surveys on today’s hottest healthcare topics; and access to Manatt Health’s industry-leading white papers, webinars and more. For more information or to schedule a demo, contact Catherine Rucci at crucci@manatt.com 

1 P.L. 116-136.

2 P.L. 116-139.

3 Claims for treatment  are financed via the Provider Relief Fund; claims for testing are financed via other funds authorized in COVID-19 stimulus bills.

4 These expenses include costs associated with administering COVID-19 testing for both staff and residents; reporting COVID-19 test results to local, state, or federal governments;  hiring staff to provide patient care or Administrative support; incurring expenses to improve infection control, including "mentorship" programs with subject matter  experts  or changes made to  physical facilities; and providing additional services to residents, such as technology that permits residents to connect with their families if their families are not able to visit in person.

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