Healthcare Provider Relief Funding and Future Provisions: Where is All of this Money Going?

April 24, 2020 | Article

The Department of Health and Human Services (HHS) continues to provide information on the $100 billion Provider Relief Fund. This week, HHS provided clarifications on additional distributions from the fund.

Below are some of the highlights from the latest releases from HHS:

We’ve developed resources to help you sort through COVID-19 and its organizational implications.

$50 billion General Distribution
HHS distributed an initial $30 billion from this fund between April 10 and April 17 based on a provider’s proportionate share of Medicare fee-for-service (FFS) reimbursements in 2019. The intent of the funding is to “address both the economic harm across the entire healthcare system due to the stoppage of elective procedures, and … the economic impact of providers incurring additional expenses caring for COVID-19 patients” and not as a supplemental payment for treating Medicare beneficiaries.

The use of Medicare FFS was merely a means of quickly distributing funds using a transparent interim methodology. Ultimately, the intent of this portion of the Provider Relief Fund is to support all healthcare providers as equitably as possible. Therefore, the remaining $20 billion will be used to augment the original allocation so that the entire $50 billion is allocated as proportional as possible based on providers’ shares of net patient revenue.

HHS has determined that net patient revenue from 2018 to be the best metric to utilize, likely due to the extended due date of cost reports and ongoing strain put on the accounting and finance departments of certain healthcare organizations still trying to close out 2019 information.

Organizations and providers that are not required to submit a cost report will need to submit certain revenue and tax information to HHS in order to participate. Initial payments began on April 24 and continue weekly as more information is obtained and verified.

Please note that providers will only get a General Distribution payment if they billed Medicare in 2019 and provide or provided after January 31, 2020, diagnoses, testing, or care for individuals with possible or actual cases of COVID-19. HHS broadly views every patient as a possible case of COVID-19. Providers who have NOT received any payment from the Provider Relief Fund as of 5 p.m. EST Friday, April 24 will NOT receive funds under this general allocation.

What You Can Do Now
Here are next steps you should consider:
Gather and submit revenue data on the HHS provider relief portal.
A portal was activated on the HHS website on April 24 to submit 2018 revenue data.  
The Provider Relief Fund Application Portal has been deployed in order to collect and verify information from providers.  The Provider Relief Fund Application Portal is collecting four pieces of information for use in allocating remaining general distribution funds:

  1. A provider’s “Gross Receipts or Sales” or “Program Service Revenue” as submitted on its federal income tax return
  2. The provider’s estimated revenue losses in March 2020 and April 2020 due to COVID
  3. A copy of the provider’s most recently filed federal income tax return
  4. A listing of the TINs any of the provider’s subsidiary organizations that have received relief funds but that DO NOT file separate tax returns. This information may also be used in allocating other Provider Relief Fund distributions.

All of these funds are subject to the similar and expanded terms and conditions attached to the initial $30 billion. A couple of key provisions added to the terms and conditions for round two of the provider relief funding include:

  • “The Recipient shall also submit general revenue data for calendar year 2018 to the Secretary when applying to receive a Payment, or within 30 days of having received a Payment.”
  • “The Recipient consents to the Department of Health and Human Services publicly disclosing the Payment that Recipient may receive from the Relief Fund. The Recipient acknowledges that such disclosure may allow some third parties to estimate the Recipient’s gross receipts or sales, program service revenue, or other equivalent information.”
As a result of these additional terms, HHS requires an attestation be made for the additional general distribution funding.  HHS has also provided a frequently asked questions document related to the provider relief fund general distribution that contains good information related to their latest information requests. Several noteworthy provisions are included in that document such as:
  • There is no appeals or dispute process. HHS is not taking direct inquiries from providers, and no remedy or appeals process will be available.
  • HHS will be processing applications in batches every Wednesday at 12 p.m. EST. Funds will NOT be disbursed on a first-come-first-served basis, which is to say, an applicant will be given equal consideration regardless of when they apply.

While HHS may note that this program is not first-come-first-served, we recommend providers plan to submit requested information as timely as possible. Additionally, it is important to ensure the information submitted is both complete and accurate, or as supportable as possible in the case of lost revenue estimates.
HHS also made it clear its intent to ensure appropriate use of funds and the need for adequate documentation to support healthcare-related expenses or lost revenue attributable to coronavirus and that “there will be significant anti-fraud and auditing work done by HHS, including the work of the Office of the Inspector General.” Accordingly, detailed expense information and lost revenues based on actual experience, versus the estimated lost revenues requested above, will be important to support the funds received.

There’s much to consider when it comes to COVID-19 and healthcare. We’ve developed a guide to help you sort through everything.

$10 billion Targeted Allocation for COVID-19 High Impact Areas
A portion of the funding is allocated to hospitals particularly impacted by COVID-19. HHS does not have a published formula on distribution on these funds. However, it is expected to be based on a combination of information provided by hospitals as noted below and facilities serving a disproportionate share of low-income patients, based on the Medicare DSH Adjustment. 

Each facility with a Medicare Tax Identification Number (TIN) must submit the following information via an online portal, TeleTracking, before 12 p.m. PST, Saturday, April 25:

  • Total number of intensive care unit beds as of April 10, 2020
  • Total number of admissions with a positive diagnosis for COVID-19 from January 1, 2020, to April 10, 2020
  • National Provider Identifier

The Impact of COVID-19 on Healthcare:The Impact of COVID-19 on Healthcare:Hospitals must submit this data in order to receive payments from this $10 billion allocation, although no guarantee of eligibility for any amount is made.

$10 Billion Allocation for Rural Providers
HHS recognizes that rural markets have distinct operating challenges, including especially thin margins, and plans to distribute $10 billion to rural health clinics and hospitals. These funds will be distributed proportionately based on operating expenses.

It is unclear of the source of data but considering the use of 2018 information in the $50 billion general allocation, it is possible that similar data may be used. The payments are expected to begin as early as the week of April 27. Further information on how these payments will be received, if an attestation is required or what terms or conditions may be attached is not yet known.

Remaining Unallocated Funds
The remaining $30 billion is expected to be primarily used for:

  • COVID-19 treatment of the uninsured
  • $400 million to Indian Health Service facilities, distributed on the basis of operating expenses
  • Certain providers, “including skilled nursing facilities, dentists and providers that solely take Medicaid.”

For uninsured patients, HHS is using this allocation to reimburse healthcare providers at Medicare rates for COVID-19 related treatments, including testing uninsured patients for COVID-19 and treating uninsured patients with a COVID-19 diagnosis.

How to Register for the Program
Providers can register for this program on April 27 for treatment to uninsured COVID-19 patients. The treatment of patients has to have occurred on or after February 4, 2020, and you can start submitting claims May 6. A training session should be provided on April 29, and reimbursement is expected to be distributed starting mid-May. The steps will include:

  1. Enrolling a provider participant
  2. Checking patient eligibility
  3. Submitting patient information
  4. Submitting claims
  5. Receiving payment via direct deposit

In order to participate, providers must attest to confirming a patient is uninsured, accepting the reimbursement as payment in full, agreeing not to “balance bill” the patient and agreeing to program terms and conditions, which may be subject to post-reimbursement audit review. All claims are subject to the same timely filing requirements required by Medicare. Certain services are considered excluded from this program, including:

  • Air and water ambulance
  • Hospice services
  • Outpatient prescription drugs covered under Medicare Part D
  • Any treatment without a COVID-19 primary diagnosis, except for pregnancy when the COVID-19 code may be listed as secondary

Reimbursement for uninsured patients will be subject to available funds in this allocation. Accordingly, any additional programs under the Provider Relief Fund will be subject to the volume of claims submitted under this program.

Additional Healthcare Funding
While the disbursement of the $100 billion CARES Act Provider Relief Fund is being implemented, Congress continues to identify healthcare as a priority and recognizes the need for additional funding. Both the House and Senate recently passed the Payroll Protection Program and Health Care Enhancement Act

As part of the roughly $484 billion of funding in the act, $75 billion was appropriated to the Public Health and Social Services Emergency Fund to support eligible healthcare providers for healthcare related expenses or lost revenues that are attributable to the coronavirus through grants or other mechanisms as determined by HHS. Additionally, $25 billion was appropriated to this fund to assist with testing.

How You Can Prepare
Now is a critical time for healthcare providers as you grapple with both the cancellation of elective surgeries and the overwhelming implications of COVID-19. The right guidance to help you sort through the relief provisions, have the right documentation in place for compliance and a strategy to move forward will be critical.

We can help you make sense of it all.

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