By Kate Hickner
There Are Always Strings Attached, Aren’t There?
At a White House Coronavirus Task Force press briefing last Tuesday, April 7, Centers for Medicare and Medicaid Services (CMS) Administrator Seema Verma announced that CMS was sending $30 billion to health care providers with “no strings attached.” But there are always strings attached, aren’t there? Even if they are appropriate and reasonable.
If you were one of the many healthcare providers across the country who woke up on Friday morning to a substantial direct deposit from the federal government into your checking account, here are a few things you should understand.
It’s Only the First Traunch
The $30 billion that CMS began to distribute on Friday is part of the $100 billion Public Health and Social Services Emergency Fund (the “Relief Fund”) established under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) to support health care providers in their fight against COVID-19. Many questions remain regarding how and when the remaining $70 billion will be distributed. It is anticipated that such distribution will focus on providers that have been most significantly impacted by the COVID-19 pandemic, including those that serve indigent, underserved and uninsured individuals.
Payments Were Determined Formulaically
The funds were determined and distributed in a formulaic manner—not on a first-come, first-served basis. All facilities and providers that received Medicare fee-for-service (FFS) reimbursements in 2019 were eligible for part of this initial and immediate $30 billion distribution. The amount each facility and provider received was based upon their proportionate share of the total 2019 Medicare fee for service reimbursements. Although most providers received their payments via direct deposit, providers who normally receive checks from CMS will receive a paper check for their share during the next few weeks.
The Payment Is a Grant — Not a Loan
Unlike advances through the CMS Accelerated and Advance Payment Program, which are completely separate, these direct deposits do not need to be repaid unless a provider is unable to agree to the required terms and conditions.
Payments Are Subject to Important Conditions
Within 30 days of receiving the payments, providers MUST sign an attestation confirming receipt of the funds and agreeing to the terms and conditions of payment. Recipients should take the time to read and understand the terms and conditions. They will be accountable to the federal government for retaining and using the funds only as permitted. For example, consider that, in order to retain the funds, each recipient needs to certify that it currently provides diagnoses, testing or care for individuals with possible or actual cases of COVID-19. Each recipient must certify that the payments received will only be used to prevent, prepare for and respond to coronavirus, and shall reimburse the recipient only for health care related expenses or lost revenues that are attributable to coronavirus. Further, as a condition to receiving these funds, providers must agree not to engage in balance billing with respect to COVID-19 patients.
Providers Must Complete an Attestation
The portal for signing the required attestation agreeing to the terms and conditions described above will be open this week, and will be available on the provider relief page of the Department of Health and Human Services website. Providers should assume that the federal government will audit their compliance with these terms and conditions in the future. Providers will be accountable for demonstrating that the funds were used appropriately.
Providers Must Return Payments Under Certain Circumstances
If a provider is unable to comply with such terms and condition, the provider is required to contact the federal government within thirty (30) days and then return the Relief Fund payment to the federal government.
The KJK Healthcare Practice Group will stay apprised of developments in this area. If you have any questions regarding the Relief Fund or issues surrounding COVID-19 more generally, please contact Kate Hickner at keh@kjk.com or 216.736.7279.