Brownstein Client Alert, April 22, 2020
On March 27, President Trump signed a historic $2 trillion COVID-19 stimulus package, the Coronavirus Aid, Relief, and Economic Security (CARES) Act (H.R. 748), into law. Included in this package is a $100 billion Provider Relief Fund to be allocated to Medicare and Medicaid providers nationwide battling the pandemic. Earlier today, the Department of Health and Human Services (HHS) outlined how it plans to allocate this funding to address the economic harm across the health care system due to the cancellation or postponement of elective procedures, and to address the economic impact on providers incurring additional expenses caring for COVID-19 patients.
The largest sum of money in the Provider Relief Fund, $50 billion, has or will be allocated for general distribution to Medicare providers based on 2018 net patient revenue. This includes the $30 billion that was distributed on April 10 and April 17, based on 2019 Medicare fee-for-service reimbursements. The remaining $20 billion will be distributed this week, to account for providers that have a higher percentage of Medicare Advantage payments and a smaller share of Medicare fee-for-service claims. The funding will be allocated so that the entire $50 billion general distribution is proportional to providers’ share of 2018 net patient revenue. Some providers will begin to receive payments by Friday, April 24, based off Centers for Medicare & Medicaid Services (CMS) cost report data; providers without cost data on file may submit revenue information through the HHS’s Provider Relief Fund portal beginning this week.
These payments will be distributed weekly, on a rolling basis, as information is validated. All providers, whether receiving payments in the earlier or later tranches, are required to sign an attestation confirming receipt of funds, agreeing to the terms and conditions of payment, and confirming the CMS cost report. Notably, as a condition to receiving these funds, providers must agree not to seek collection of out-of-pocket payments from presumptive or confirmed COVID-19 patients that are greater than what the patient would have otherwise been required to pay had the care been provided by an in-network provider.
Allocation for COVID-19 High-Impact Areas
Ten billion dollars of the Provider Relief Fund will be allocated to hospitals in the top 100 COVID-19 hotspots. HHS will determine the top 100 “hotspots” by collecting information from hospitals based on the total number of intensive care unit beds and total number of COVID-19 admissions for each facility. Once this information is received and authenticated, the administration will determine which facilities qualify, and distribute funds where the impact from COVID-19 is greatest, with the aim of having payments out by next Wednesday, April 29. Eligible providers should have already been contacted by HHS to provide this data. It is notable that these funds appear to only be available to hospitals—not other providers—in potential “hotspots.”
Allocation for Rural Providers
Ten billion dollars will be allocated for rural health clinics and hospitals, which HHS says are “more financially exposed to significant declines in revenue or increases in expenses related to COVID-19 than their urban counterparts.” These funds will be distributed beginning next Friday, May 1, based on operating expenses, using a methodology HHS says will distribute payments proportionally to each facility and clinic. HHS has not yet required rural providers to self-report data as a condition of receipt of the funds.
Allocation for Treatment of the Uninsured
As the administration announced in early April, a portion of the $100 billion provider fund will be reserved to pay for the treatment of uninsured patients who have been diagnosed with COVID-19. Beginning on April 27, providers will be able to register for the payment program through a portal created by the Health Resources Services Administration (HRSA). HHS states that claims can be submitted starting in May 2020 and will be reimbursed at Medicare rates.
Allocation for Indian Health Service
HHS will allocate $400 million to the Indian Health Service, and will begin distributing this funding next week based on operating expenses.
HHS notes that not all eligible providers will receive funds under the announced distribution mechanisms, and that there will be further announcements of allocations to additional provider types, including skilled nursing facilities, dentists and providers that solely rely on Medicaid.
Congress is currently negotiating another stimulus package that passed the Senate on Tuesday, April 22 and is expected to pass the House this week. This bill would allocate an additional $75 billion to the Provider Relief Fund, and similarly defer to HHS to allocate these additional funds. Providers who feel they have not been adequately compensated through the existing allocations may have another opportunity to make the case for targeted compensation through this next appropriation of funds.
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