Update: Allocation of the Initial $100 Billion Health Care Provider Relief Fund, $75 Billion to Come

HHS Announces Allocation of Initial $100 Billion

The initial $30 billion disbursement from HHS to health care providers across the country was a part of a much larger $100 billion fund.  HHS announced an outline of planned allocation for the remaining $70 billion on April 22, 2020.  The new details include:

• $50 billion of the Provider Relief Fund is allocated for general distribution to Medicare facilities and providers impacted by COVID-19, based on eligible providers’ 2018 net patient revenue. The $30 billion already distributed is included in this figure and the remaining $20 billion is currently scheduled to be disbursed on April 24, 2020.  HHS has confirmed that on that date, “a portion of providers will automatically be sent an advance payment based off the revenue data they submit in CMS cost reports. Providers without adequate cost report data on file will need to submit their revenue information to a portal opening the week of April 19, 2020.”  The portal will be linked on this page.
• $10 billion will be targeted at hospitals in COVID-19 high impact areas. HHS used hospitals serving COVID-19 patients in New York as an example of a high impact area.  Hospitals in such areas will receive a larger share of the $10 billion.
• $10 billion will be allocated to rural health clinics and hospitals. Payments will be distributed as early as the week of April 26, 2020 on the basis of operating expenses.
• $400 million is allocated to Indian Health Service facilities. It will also be distributed as early as the week of April 26, 2020 on the basis of operating expenses.
• Other unspecified amounts will go to:
  • Treatment of the uninsured. A portion of the $100 billion Provider Relief Fund will be used to reimburse healthcare providers, at Medicare rates, for COVID-related treatment of the uninsured;
  • Skilled nursing facilities;
  • Dentists; and
  • Providers that solely take Medicaid, such as assisted living facilities.

$75 Billion to Be Added to Relief Fund for Health Care Providers

The $484 billion supplement to the $2.2 trillion funding from the CARES Act passed by the Senate on April 21, 2020 includes an additional $75 billion for health care providers (on top of the $100 billion allotted in the CARES Act and described above).  Most of the language in the new funding is similar to or mirrors the language in the CARES Act, including limiting such funds to “eligible health care providers.”[1]  Meaningful differences between disbursement of the initial $30 billion that began on April 10 and any future disbursements from the additional $75 billion may be apparent only when further announcements are made by HHS or after the disbursements are made.  The initial $30 billion largely went to Medicare providers and CMS Administrator Seema Verma has announced that the second tranche of disbursements will be directed to Medicaid providers.

The supplement includes the following provisions:

• Like the CARES Act, the fund “may not be used to reimburse expenses or losses that have been reimbursed from other sources or that other sources are obligated to reimburse.”
• As we have written previously, Reports will also be required for the supplemental funds. Health and Human Services (HHS) has not provided significant detail on required reports and it has discretion to determine the reports needed to ensure compliance with conditions of the funding.
• The Bill continues to reference an application process in order to receive the funding. The CARES Act also included such language; however, no application was required prior to HHS’ first $30 billion disbursement to health care providers.
• The definition of “eligible health care provider” was not expanded and continues to include Medicare and Medicaid providers and suppliers as well as others specified by the Secretary of HHS “that provide diagnoses, testing, or care for individuals with possible or actual cases of COVID–19.”¹

The House is expected to pass the legislation later this week and it will reportedly be signed into law.

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

[1] The definition of “eligible health care provider” is the same as the definition used in the CARES Act: “public entities, Medicare or Medicaid enrolled suppliers and providers, and such for-profit entities and not-for-profit entities not otherwise described in this proviso as the Secretary may specify, within the United States (including territories), that provide diagnoses, testing, or care for individuals with possible or actual cases of 16 COVID–19