The CARES Act provides for a $175 billion Provider Relief Fund, $50 billion of which is distributed through the general distribution. The general distribution reimburses eligible health care providers for health care related expenses and lost revenues attributable to COVID-19 in the following two tranches:
- Tranche 1 - $30 billion in payments were made to providers in proportion to their Medicare fee-for-service payments in 2019; and
- Tranche 2 - $20 billion in payments have been made available to providers in proportion to their gross receipts or sales/program service revenue.
In order to retain the funds, the recipient must attest to the Department of Health and Human Services (“HHS”) terms and conditions. Such attestation must be made within 90 days from receipt of the funds.
HHS has posted frequently asked questions (“FAQs”) that contain helpful technical and interpretive guidance for providers who receive the funds. Providers should be aware that HHS regularly updates these FAQs. It is important to monitor these changes because HHS has changed its position on certain issues and such changes could impact a provider’s ability to retain the funds.
Set forth below is an overview of some of the recent updates:
- On June 8, HHS stated that providers can return a portion of the relief funds that they do not use and that HHS will provide future direction on how to return the unused funds. Previous guidance indicated that the funds must be returned or rejected in their entirety.
- On June 3, a new FAQ was added stating that providers can reject funds and retract attestations by calling the UnitedHealth Group provider support line.
- On June 2, HHS provided guidance on the types of expenses and lost revenue that are eligible for reimbursement.
- On May 19, 20 and 21, HHS added several FAQs addressing retention of the funds when a provider has undergone a change of ownership. Before this guidance, the provider advice line told callers that the transfer of funds between a buyer and seller was allowed if the buyer could attest to the terms and conditions.
If you have any questions about this topic, please reach out to the authors of this blog.
Nicole Jobe is a partner in Thompson Coburn’s health care group.
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