Medicare Relief Funds Hit Your Account: Can You Keep Them?

Many Medicare providers awoke the morning of Friday April 10, 2020 to an influx of Medicare funds.  The funds are a $30 billion portion of the $100 billion stimulus fund intended to provide relief to healthcare providers during the COVID-19 crisis.  CMS has confirmed that these are grants, not loans, and will not need to be repaid if certain conditions are satisfied.  Although CMS Administrator Seema Verma announced during an April 7, 2020 press conference that “there are no strings attached, so the health care providers that are receiving these dollars can essentially spend that in any way that they see fit,” fund terms have now been published.  The terms confirm that the funds are to “reimburse the Recipient only for health care related expenses or lost revenues that are attributable to coronavirus.”  Documentation of all COVID-19-related expenses as well as lost revenue that is attributable to COVID-19 will be required for reports to be submitted to CMS.

Providers should be aware that within 30 days of receiving relief funds, they must sign an attestation confirming receipt of the funds and agreeing to the terms and conditions of payment.  The portal for signing the attestation will be open the week of April 13, 2020, and will be linked on this page.  The Department of Health and Human Services website dedicated to the CARES Act Provider Relief Fund provides that if the fund recipient receives the payment and does not wish to comply with the terms and conditions, it must contact the Department within 30 days of receipt of payment and then remit full payment. We anticipate additional guidance on this process.

Detail on the terms and conditions for the relief funds is provided below.

• The Recipient (meaning the healthcare provider receiving the relief funds) certifies that it billed Medicare in 2019; currently provides diagnoses, testing, or care for individuals with possible or actual cases of COVID-19; is not currently terminated from participation in Medicare; is not currently excluded from participation in Medicare, Medicaid, and other Federal health care programs; and does not currently have Medicare billing privileges revoked.
• The Recipient certifies that the Payment will only be used to prevent, prepare for, and respond to coronavirus, and shall reimburse the Recipient only for health care related expenses or lost revenues that are attributable to coronavirus.
• The Recipient certifies that it will not use the Payment to reimburse expenses or losses that have been reimbursed from other sources or that other sources are obligated to reimburse.
• The Recipient shall submit reports as the Secretary determines are needed to ensure compliance with conditions that are imposed on this Payment, and such reports shall be in such form, with such content, as specified by the Secretary in future program instructions directed to all Recipients.
• Not later than 10 days after the end of each calendar quarter, any Recipient that is an entity receiving more than $150,000 total in funds under the Coronavirus Aid, Relief, and Economics Security Act (P.L. 116-136), the Coronavirus Preparedness and Response Supplemental Appropriations Act (P.L. 116-123), the Families First Coronavirus Response Act (P.L. 116-127), or any other Act primarily making appropriations for the coronavirus response and related activities, shall submit to the Secretary and the Pandemic Response Accountability Committee a report. This report shall contain: the total amount of funds received from HHS under one of the foregoing enumerated Acts; the amount of funds received that were expended or obligated for each project or activity; a detailed list of all projects or activities for which large covered funds were expended or obligated, including: the name and description of the project or activity, and the estimated number of jobs created or retained by the project or activity, where applicable; and detailed information on any level of sub-contracts or subgrants awarded by the covered recipient or its subcontractors or subgrantees, to include the data elements required to comply with the Federal Funding Accountability and Transparency Act of 2006 allowing aggregate reporting on awards below $50,000 or to individuals, as prescribed by the Director of the Office of Management and Budget.
• The Recipient shall maintain appropriate records and cost documentation including, as applicable, documentation required by 45 CFR § 75.302 – Financial management and 45 CFR § 75.361 through 75.365 – Record Retention and Access, and other information required by future program instructions to substantiate the reimbursement of costs under this award. The Recipient shall promptly submit copies of such records and cost documentation upon the request of the Secretary, and Recipient agrees to fully cooperate in all audits the Secretary, Inspector General, or Pandemic Response Accountability Committee conducts to ensure compliance with these Terms and Conditions.
• The Secretary has concluded that the COVID-19 public health emergency has caused many healthcare providers to have capacity constraints. As a result, patients that would ordinarily be able to choose to receive all care from in-network healthcare providers may no longer be able to receive such care in-network. Accordingly, for all care for a possible or actual case of COVID-19, Recipient certifies that it will not seek to collect from the patient out-of-pocket expenses in an amount greater than what the patient would have otherwise been required to pay if the care had been provided by an in-network Recipient.

Note that the CARES Act Relief Fund Program as described above is a different program than the CMS Accelerated and Advance Payment Program which allows providers to apply for accelerated Medicare payments. According to Administrator Verma during the April 7, 2020 press conference, health care providers that receive funds from Medicaid and other payment sources in addition to Medicare can expect to receive relief funds “from a second tranche of funding.”

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