News & Insights
Apr 10, 2020
UPDATED: April 13, 2020
On April 13, HHS added a fifth bullet point to information on CARES Act Provider Relief Fund web page stating, “If you ceased operation as a result of the COVID-19 pandemic, you are still eligible to receive funds so long as you provided diagnoses, testing, or care for individuals with possible or actual cases of COVID-19. Care does not have to be specific to treating COVID-19. HHS broadly views every patient as a possible case of COVID-19.” While it is uncommon to rely on a webpage statement to interpret Terms and Conditions, in these strange times, we believe that the HHS webpage can be relied upon to interpret the previous inconsistency between the webpage and the Terms and Conditions document.
On April 10, Health and Human Services (“HHS”) began providing a $30 billion portion of the latest COVID-19 relief fund to healthcare providers.
Information on this funding may be found here.
While the government announced this funding as coming with “no strings attached” in its April 7 briefing, the relief payment (the “Payment”) does come with certain terms and conditions that a provider must certify compliance with. The payment provided does not need to be repaid unless a provider fails to meet the terms and conditions tied to the payment. There are also some remaining ambiguities to be resolved with regard to the conditions, and some requirements that depend on future guidance from HHS. These will be discussed in more detail at the conclusion of this update, after the terms and conditions are summarized.
TERMS AND CONDITIONS
The provider certification must occur within 30 days of a provider receiving a payment and must certify compliance with the following terms and conditions (found here):
1. The provider must certify that it billed Medicare in 2019; is not currently terminated from participation in Medicare; is not currently excluded from participation in Medicare, Medicaid, and other federal healthcare programs; and does not currently have Medicare billing privileges revoked.
2. Furthermore, the provider must certify that currently provides diagnoses, testing, or care for individuals with possible or actual cases of COVID-19; that the payment will only be used to prevent, prepare for, and respond to coronavirus, and shall reimburse the recipient only for healthcare-related expenses or lost revenues that are attributable to coronavirus. The payment may not be used to reimburse expenses or losses that have been reimbursed from other sources or that other sources are obligated to reimburse.
3. For all care for a possible or actual case of COVID-19, the provider must certify 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 provider. That is, providers are obligated to abstain from “balance billing” any patient for COVID-related treatment.
4. The provider must submit reports (in a form determined by HHS in future guidance) to ensure compliance with the terms and conditions of the payment, and must maintain appropriate records and cost documentation (in compliance with 45 CFR § 75.302, 45 CFR § 75.361 through 75.365, and future HHS guidance). Copies of these records must be promptly submitted to HHS upon request.
5. If a provider is an entity that has received more than $150,000 total in funds under coronavirus relief funds or appropriations (that is, not only this current payment), the provider must submit to HHS and the Pandemic Response Accountability Committee a report within 10 days after the end of each calendar quarter. This report shall contain: the total amount of funds received from HHS related to coronavirus relief; 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; and detailed information on any level of sub-contracts or subgrants awarded by the covered recipient or its subcontractors or subgrantees.
6. There are additional restrictions on the use of the funds, applicable either to (i) all FY 2020 appropriations or (ii) all federal appropriations more generally. These include that the funds cannot be used:
7. Furthermore, if any activities under the funded project will involve human subjects in any research activities, the provider must provide satisfactory assurance of compliance with the participant protection requirement of the HHS/OASH Office of Human Research Protection (OHRP) prior to implementation of those research components.
8. Recipients are require to submit reports on a quarterly basis setting out how the funds have been used and are subject to the fraud, waste and abuse laws of the federal government. In addition, all recipients are subject to the provisions of the Federal Financial Assistance Transparency Act that includes additional conditions and reporting obligations for recipients of the funds.
FURTHER DISCUSSION AND QUESTIONS
There are many open questions for which we await further HHS guidance. As an initial matter, it is not clear how broadly applicable these payments are intended to be made.
The government has stated that “[t]here are no strings attached. So the healthcare providers that are receiving these dollars can essentially spend that in any way that they see fit,” and that the purpose of these funds is “provide relief to both providers in areas heavily impacted by the COVID-19 pandemic and those providers who are struggling to keep their doors open due to healthy patients delaying care and canceled elective services,” the actual conditions require the provider to certify that: the provider “currently provides diagnoses, testing, or care for individuals with possible or actual cases of COVID-19,” that “the payment will only be used to prevent, prepare for, and respond to coronavirus, and shall reimburse the [provider] only for healthcare-related expenses or lost revenues that are attributable to coronavirus.”
These certifications may limit the availability of these funds more narrowly than indicated by the government’s general press release. However, because the payments are being made broadly, including to practices and facilities such as ambulatory surgery centers that are currently shut down and thus providing no care, the intent of the payments do not seem to be tied to COVID-19 treatment or diagnosis.
Since the payments are based on 2019 Medicare reimbursement, it is also unclear how a provider should handle payments (i) coming in to accounts that may be part of inactive TINs or entities (e.g., from acquisitions with TINs no longer operating as a physician practice and can’t attest to the terms); (ii) received by an acquired provider when the acquirer did not take assignment of the provider’s Medicare provider agreement. Further guidance as to whether the payments can be retained or need to be reimbursed under these and other circumstances is desired.
Additionally, the conditions prohibit providers from attempting to collect from a COVID-19 (suspected or confirmed) 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 provider. How this restriction is to apply to out-of-network ancillary providers in a hospital or other healthcare facility -- who may not be the provider actually receiving the payment -- is not perfectly clear.
The impact of receiving payments under a business interruptions insurance policy is also unclear. Due to the terms and conditions’ reference not using the payments “to reimburse expenses or losses that have been reimbursed from other sources or that other sources are obligated to reimburse,” it may well be that a provider could not “double-dip” and receive both insurance payments and relief fund payments -- and it is possible that the insurer’s obligation would take primacy over payment under this fund.
Finally, the threshold for meeting these certified terms and conditions is not clearly set out, and the procedure for returning the money in the event a provider cannot or chooses not to comply with the terms and conditions is unclear as well.
Additional information on these and other questions is expected to begin arriving soon, likely during the week of April 13th, when the portal for providers to submit certifications of compliance is scheduled to open. Please stay posted for further updates.
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