COVID-19 Alert – CARES Act Provider Relief Fund

As part of the CARES Act, $100 billion of relief funds have been designated to assist hospitals and other healthcare providers on the front lines of the COVID-19 response. The funds are used to support healthcare-related expenses or lost revenues attributable to COVID-19 and to ensure uninsured Americans can receive COVID-19 testing and treatment. The $100 billion will be distributed in two waves.

Wave 1 – $30 Billion Initial Funding – Eligibility, Calculation, and Mechanics

The first wave is an immediate infusion of $30 billion via direct electronic deposits to eligible providers. The first payments were made on Friday April 10. These funds are payments, not loans, and do not need to be repaid. Facilities and providers that received Medicare fee-for-service reimbursements in 2019 are eligible for this first wave of funds. As a condition for receiving these funds, providers must agree not to seek collection of out-of-pocket payments from a COVID-19 patient that are greater than what the patient would have been required to pay had the care been provided by an in-network provider. Furthermore, even if a facility or provider ceased operations a result of the COVID-19 pandemic, the facility or provider is still eligible to receive the funds provided the facility or provider diagnoses, tests, or cares for individuals with possible or actual COVID-19 cases.

Payment amounts as part of the first wave of funds are based on the facility or providers share of its Medicare fee-for-service reimbursements in 2019. The total Medicare for-fee-services in 2019 were $484 billion. Therefore, the amount a facility or provider is eligible for is determine as follows:

1. Facility or provider Medicare fee-for-service payments received divided by 484 billion
2. Multiply the result from Step 1 by $30 billion

If you are an eligible provider, you do not need to take any steps to apply. The US Department of Health and Human Services has partnered with UnitedHealth Group to provide rapid payment to the eligible providers. Accordingly, the providers are paid via their Automatic Clearing House account information on file with UnitedHealth Group or the Centers for Medicare & Medicaid Services. Providers or facilities that normally receive a paper check for reimbursement will receive one in the next few weeks, otherwise the automatic payments will be sent via Optum Bank. Within 30 days of receiving the payment, providers and facilities must sign an attestation confirming receipt of the funds and agreeing to the terms and conditions of receipt. If a provider does not wish to comply with the terms and conditions, they have 30 days to contact Health and Human Services and remit the full payment as instructed.

Wave 2 – $70 Billion Remaining Funding – Primary Recipients

The remaining $70 Billion is distributed in the second wave. These funds will primarily be used for:

1. Providers in areas particularly impacted by the COVID-19 pandemic
2. Rural providers
3. Providers of services with lower shares of Medicare reimbursement or who predominantly serve the Medicare population
4. Providers requesting reimbursement for the treatment of uninsured Americans

As of this publication, there is not yet further guidance on how the second wave of funds will be distributed or whether there will be any application process. If you have any questions, please reach out to your Cole Schotz contact.