Type: Law Bulletins
Date: 04/10/2020

CARES Act Provider Relief Fund (Part One)

On April 10, the U.S. Department of Health & Human Services (HHS) announced that it had begun making payments of an initial tranche of funds from the Public Health and Social Services Emergency Fund (the “Relief Fund”), as authorized under the CARES Act. The initial tranche represents $30 billion out of a total pool of $100 billion. All facilities and providers that received Medicare fee-for-service reimbursements in 2019 are eligible to receive a share of these payments, with each provider’s share being calculated based on such provider’s share of the total Medicare fee-for-service reimbursements in 2019. As a condition to receiving and retaining the funds, each provider must, within 30 days of receiving payment, sign an attestation confirming receipt of the funds and agreeing to HHS’ terms and conditions. Among these terms and conditions are the following:

  • The recipient certifies that it currently provides diagnoses, testing or care for individuals with possible or actual cases of COVID-19.
  • 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 healthcare-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 must agree to not seek collection of out-of-pocket payments from COVID-19 patients that are greater than what the patient would have otherwise been required to pay if the care had been provided by an in-network provider.
  • None of the funds shall be used to pay the salary of an individual at a rate “in excess of Executive Level II”— currently $197,300.

It is unclear how HHS will determine whether a health care provider or supplier is “providing care for individuals with possible or actual cases of COVID-19.” Arguably, though, this describes almost all health care providers and suppliers who have continued to see patients — in whatever limited form, and on whatever limited schedule — since the COVID-19 pandemic national emergency was declared. And it is without question that nearly all health care providers and suppliers have experienced lost revenues as a result of the current pandemic. When HHS issues additional guidance on eligibility for these initial disbursements, and when HHS issues details on how and when the remaining $70 billion of the Relief Fund will be disbursed, we will update this alert. For now, though, check your deposit accounts and consider how your organization might certify to the Relief Fund terms and conditions.

As always, don’t hesitate to reach out to your Taft attorney or a member of the Health Care and Life Sciences industry group if you have any questions about this program or how it may impact you or your organization.

Please visit our COVID-19 Toolkit for all of Taft’s updates on the coronavirus.

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