Your Relief Funding Arrives, Now What?
Initial delivery of the provider relief fund starts now. The initial $30 billion of this fund was distributed beginning April 10, 2020. These funds are intended for covering healthcare-related expenses or a loss in revenue due to COVID-19. It can also help cover expenses for patients who need testing and treatment related to COVID-19 without receiving a bill.
There’s much to consider when it comes to the impact of COVID-19 on organizations.
Who Will Receive Funds?
Initial funds will go to hospitals and providers who are enrolled in Medicare. According to the Department of Health and Human Services (HHS), facilities and providers are allotted a portion of the $30 billion based on their share of the 2019 Medicare fee-for-service (FFS) reimbursements. The payments are not loans and will not need to be repaid, unless conditions of participation are not met.
What Are the Terms and Conditions Related to These Funds?
While funds are not considered loans, there are specific terms and conditions listed on the HHS Website which are fairly expansive. Some key provisions include:
How Should I Account for the Funds Received?
There are numerous accounting and financial reporting considerations applied to these funds.
For organizations that follow GASB, the transaction will need to be analyzed in comparison with the organization’s definition of operations. For many, treatment as a separate line item within operations, but separate from patient service revenue, would also be a preferred option.
How Is the Initial Funding Determined?
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.
A community hospital billed Medicare FFS $121 million in 2019. To determine how much they would receive, use this equation:
$121,000,000/$484,000,000,000 x $30,000,000,000 = $7,500,000
How Will the Funds be Distributed?
Providers will be paid via Automated Clearing House account information on file with UHG, UnitedHealthcare, or Optum Bank, or used for reimbursements from the Centers for Medicare & Medicaid Services (CMS). If you normally receive a paper check for reimbursement from CMS, you’ll also receive a paper check for this payment.
How Will Payment Apply to Different Types of Providers?
All relief payments are being made to providers and according to their tax identification number (TIN).
What Do You Need to Do Next?
Once providers receive payment, an attestation confirming receipt of the funds and agreeing to the terms and conditions of the payment must be signed within 30 days. Starting April 13, a portal for signing will be available and linked from hhs.gov/providerrelief.
What about the Remaining $70 Billion Allotted to Providers Under the CARES Act?
The Trump Administration is working rapidly on targeted distributions that will focus on providers in areas particularly impacted by the COVID-19 outbreak, rural providers, providers of services with lower shares of Medicare reimbursement or who predominantly serve the Medicaid population, and providers requesting reimbursement for the treatment of uninsured Americans.
What Else Should Providers Consider?
As providers review the funds they will receive under this program, they should also pay attention to various other stimulus programs in determining priority for how different funds are supported by underlying costs or lost revenues as required by the programs. Many of the stimulus programs include limitations on using the same expenses to support funds received from different sources.