HHS to Release Provider Fund Distribution to Private-Pay ALFs, but Action Needed by September 13

Private-pay assisted living providers may be able to take a sigh of relief as they can now submit an application for the $18 Billion Phase 2 General Distribution.  On September 1, the Department of Health & Human Services announced a funding opportunity for private-pay assisted living facilities (ALFs).  As mentioned in previous articles, ALFs have been hard hit by the COVID-19 crisis, and those that are private-pay have, in general, not been eligible for previous federal Provider Relief Funding.  Previous funding for assisted living facilities has been primarily based on state-level provider relief funds and Medicaid enrollment.

In order for a private-pay ALF to qualify for the funds, it must:

• Be a state-licensed/certified assisted living facility;
• Have either (i) filed a federal income tax return for fiscal years 2017, 2018 or 2019 or (ii) be an entity exempt from the requirement to file a federal income tax return;
• Have provided patient/resident care after January 31, 2020; and
• Not have permanently ceased providing patient/resident care directly, or indirectly through included subsidiaries.

A qualifying ALF may receive up to 2% of its annual revenue from patient care.  HHS has clarified that “patient care” in this context means “health care, services and supports, as provided in a medical setting, at home, or in the community to individuals who may currently have or be at risk for COVID-19, whereby HHS broadly views every patient as a possible case of COVID-19.”  ALFs that are applying for Phase 2 – General Distribution funds may include patient care revenue that supports residents’ nutritional, housing, activities of daily living, and medical needs, including purchased services.

As with Medicare providers that have previously been the beneficiaries of Provider Relief Funds, all assisted living recipients may be subject to auditing to ensure the accuracy of the data submitted to HHS for payment.  Those assisted living facilities identified as having provided inaccurate information to HHS will be subject to payment recoupment and potentially other legal action.  Additionally, recipients may not use the payment to reimburse expenses or losses that have been reimbursed from other sources or that other sources are obligated to reimburse, such as the Paycheck Protection Program.

In its press release, HHS announced the following detail regarding the funding opportunity:

Through its ongoing efforts to support providers in need, HHS is inviting ALFs that may have been previously ineligible to apply for Phase 2 General Distribution funding. ALFs support older adults and people with disabilities with a wide range of assistance for activities of daily living. Nearly 1 million older adults live in an estimated 28,000 assisted living facilities across the U.S. According to the Centers for Disease Control and Prevention (CDC), ALFs and the population they serve are particularly vulnerable to the spread and impact of COVID-19. To combat this risk and better protect their residents, many ALFs have implemented CDC recommendations that have resulted in increased health care related costs to their facilities. HHS is encouraging ALFs to apply for funding to help minimize the financial hardships of these increased expenses caused by COVID-19.

Assisted living facilities planning to submit an application for funding currently have a deadline of September 13, 2020. Note that HHS may continue to update requirements and guidance as they pertain to ALF Provider Relief Funding.

For more information, please contact Hedy S. Rubinger or Alexander B. Foster.