CARES Financial Relief for Health Care Providers
The CARES Act adds $100 billion to the “Public Health and Social Services Emergency Fund” to reimburse “eligible health care providers” for “health care-related expenses or lost revenues that are attributable to Coronavirus.” The fund will remain available until expended. The single paragraph of the CARES Act that establishes the fund is vague, leaving the Department of Health and Human Services (HHS) and the Secretary with the authority to administer the same. The following outlines what we do know based on the text:
- Eligible Providers: The funds are available to “eligible health care providers” which includes “public entities, Medicare or Medicaid enrolled suppliers and providers, and such for-profit entities and not-for-profit entities…as the Secretary may specify…that provide diagnoses, testing, or care for individuals with possible or actual cases of COVID-19.”
- Application: Eligible health care providers must submit an application to the Secretary that includes their tax ID number and a statement justifying their need for the payment. Applications will be reviewed by the Secretary on a rolling basis. Further instruction on how to apply is anticipated in the coming weeks.
- Reports and Documentation: Recipients will be required to submit reports and maintain documentation as the Secretary determines are needed to ensure compliance with conditions that are imposed.
- Fund Distribution: The CARES Act does not indicate how or when the money will be disbursed, except that it will be “through grants or other mechanisms,” and payment includes pre-payment, prospective payment, or retrospective payment, as determined appropriate by the Secretary; it will be through “the most efficient payment systems practicable to provide emergency payment.”
- Expenses. Provider expenses that may be reimbursed include expenses relating to the building or construction of temporary structures, leasing of properties, and medical supplies and equipment, including personal protective equipment and testing supplies, increased workforce and training, emergency operation centers, retrofitting facilities, and surge capacity.
- Lost Revenue. The CARES Act does not explain how the Secretary will view lost revenue. However, it is advisable for eligible health care providers to begin capturing and documenting losses in revenue due to the impacts of COVID-19 so they are prepared should the Secretary issue guidance addressing how lost revenue will be treated. One avenue for capturing this information may be providers outlining their “payer mix” and the percentage of patients attributable to each payer mix for each individual month during 2019. This 2019 information can then be used to show lost revenue for each month the provider is negatively impacted by COVID-19. Additionally, the information can be used to project future lost revenue should the Secretary allow reimbursement based off future predictions.
For additional information on provider relief, read CARES Act Provider Relief Fund.
Our Chambliss team will continue to monitor the developments regarding the CARES Act. Please contact Jim Catanzaro, Justin Furrow, or your relationship attorney if you have questions or need additional information.
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The material in this publication was created as of the date set forth above and is based on laws, court decisions, administrative rulings, and congressional materials that existed at that time, and should not be construed as legal advice or legal opinions on specific facts. In some cases, the underlying legal information is changing quickly in light of the COVID-19 pandemic. The information in this publication is not intended to create, and the transmission and receipt of it does not constitute, a lawyer-client relationship. Please contact your legal counsel for advice regarding specific situations.