Type: Law Bulletins
Date: 07/01/2020

CARES Act Provider Relief Fund (Part Three)

As addressed in previous Taft law bulletins (CARES Act Provider Relief Fund Part One and Part Two), a total of $175 billion in health care stimulus is being paid to eligible recipients, and most payments have been made without application. The U.S. Department of Health and Human Services (HHS) recently announced that health care providers now have 90 days from the date they receive a payment to accept the Terms and Conditions for CARES Act Provider Relief Fund payments or return the funds. Providers that do not accept the Terms and Conditions after 90 days of receipt will be deemed to have accepted the Terms and Conditions.

In addition to extending the attestation deadline to 90 days from the date the CARES Act provider relief payment was received, HHS also recently announced the Medicaid targeted distribution and enhanced the CARES Act Provider Relief Fund portal to include the ability to apply for the Medicaid distribution. The application that must be submitted on the portal by July 20, 2020 is available here.

Eligibility for the Medicaid targeted distribution is limited.  Providers who received payments in the prior $50 billion General Distribution payment are not eligible to receive payment in this current Medicaid Distribution, regardless of the size of the previous payment received. However, prior payment in a Provider Relief Fund Targeted Distribution (i.e. the High Impact Area, Rural, Indian Health Service, and Skilled Nursing Facility Targeted Distributions) does not affect eligibility. This means that providers who received no Medicare fee for service revenue in 2019 who were not eligible for the General Distribution may be eligible for the Medicaid targeted distribution. This would likely include providers who see only pediatric patient populations and/or who provide services that are not Medicare-covered services.

HHS has also been posting responses to frequently asked questions (FAQs). HHS posted a response to an FAQ recently to assist providers in determining what can constitute “healthcare-related expenses or lost revenue attributable to coronavirus” for purposes of meeting the Terms and Conditions for each payment. The permitted expenses are expansive. The FAQ states:


The Terms and Conditions state that Provider Relief Fund payments 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. What expenses or lost revenues are considered eligible for reimbursement? (Modified 6/19/2020)

The term “healthcare related expenses attributable to coronavirus” is a broad term that may cover a range of items and services purchased to prevent, prepare for, and respond to coronavirus, including:

  • supplies used to provide healthcare services for possible or actual COVID-19 patients;
  • equipment used to provide healthcare services for possible or actual COVID-19 patients;
  • workforce training;
  • developing and staffing emergency operation centers;
  • reporting COVID-19 test results to federal, state, or local governments;
  • building or constructing temporary structures to expand capacity for COVID-19 patient care or to provide healthcare services to non-COVID-19 patients in a separate area from where COVID-19 patients are being treated; and
  • acquiring additional resources, including facilities, equipment, supplies, healthcare practices, staffing, and technology to expand or preserve care delivery.

Providers may have incurred eligible health care related expenses attributable to coronavirus prior to the date on which they received their payment. Providers can use their Provider Relief Fund payment for such expenses incurred on any date, so long as those expenses were attributable to coronavirus and were used to prevent, prepare for, and respond to coronavirus. HHS expects that it would be highly unusual for providers to have incurred eligible expenses prior to January 1, 2020.

The term “lost revenues that are attributable to coronavirus” means any revenue that you as a healthcare provider lost due to coronavirus. This may include revenue losses associated with fewer outpatient visits, canceled elective procedures or services, or increased uncompensated care. Providers can use Provider Relief Fund payments to cover any cost that the lost revenue otherwise would have covered, so long as that cost prevents, prepares for, or responds to coronavirus. Thus, these costs do not need to be specific to providing care for possible or actual coronavirus patients, but the lost revenue that the Provider Relief Fund payment covers must have been lost due to coronavirus. HHS encourages the use of funds to cover lost revenue so that providers can respond to the coronavirus public health emergency by maintaining healthcare delivery capacity, such as using Provider Relief Fund payments to cover:

  • Employee or contractor payroll
  • Employee health insurance
  • Rent or mortgage payments
  • Equipment lease payments
  • Electronic health record licensing fees

You may use any reasonable method of estimating the revenue during March and April 2020 compared to the same period had COVID-19 not appeared. For example, if you have a budget prepared without taking into account the impact of COVID-19, the estimated lost revenue could be the difference between your budgeted revenue and actual revenue. It would also be reasonable to compare the revenues to the same period last year.

All providers receiving Provider Relief Fund payments will be required to comply with the reporting requirements described in the Terms and Conditions and specified in future directions issued by the Secretary.  HHS will provide guidance in the future about the type of documentation we expect recipients to submit.


Regarding documentation and reporting requirements, the Terms and Conditions mandate that each recipient shall submit reports as HHS determines are needed to ensure compliance with conditions that are imposed on each payment. Beyond these general reporting requirements, the Terms and Conditions also impose reporting requirement for recipients of over $150,000 from the various Acts that constitute the Provider Relief Fund (PRF). Specifically, they require the recipient to submit a report “[n]ot later than 10 days after the end of each calendar quarter.” The report must detail the use of those funds, among other categories of information. 

The HHS FAQs page recently amended guidance from May to remove what HHS had formerly said would be a July 10 reporting deadline. Instead, the FAQ response (as of July 1, 2020) provides:


Recipients of Provider Relief Fund payments do not need to submit a separate quarterly report to HHS or the Pandemic Response Accountability Committee. HHS will develop a report containing all information necessary for recipients of Provider Relief Fund payments to comply with this provision. ***

However, the Terms and Conditions for all Provider Relief Fund payments also require recipients to submit any reports requested by the Secretary that are necessary to allow HHS to ensure compliance with payment Terms and Conditions. HHS will be requiring recipients to submit future reports relating to the recipient's use of its PRF money. HHS will notify recipients of the content and due date(s) of such reports in the coming weeks.


While it is unclear if this guidance just delays the due date or combines the quarterly reporting requirement with the more general reporting requirement in the Terms and Conditions, the current takeaways are that entities do not need to file a report by July 10, 2020 and additional information on reporting is forthcoming.

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 CARES Act Provider Relief Funds 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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