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Health Law Monitor

CARES Act Update: HHS Announces Immediate Infusion of $30 BillionĀ  into Health Care System

April 10, 2020

By: Neil C. Brown

At the April 7, 2020 COVID-19 Task Force Briefing, the Centers for Medicare & Medicaid Services’ (CMS) Administrator, Seema Verma, announced that the first $30 billion of the Title III CARES Act funding will be distributed to Medicare providers by the end of this week. On April 9, 2020, the Department of Health and Human Services (HHS) issued more details about the distribution of and conditions associated with these payments. The following is a summary of some important highlights from this additional information:


When will the payments be distributed?

  • The $30 billion is being distributed immediately - beginning April 10, 2020 - to eligible providers throughout the American healthcare system. 


Who is eligible for the payments? 

  • All facilities and providers that received Medicare fee-for-service (FFS) reimbursements in 2019 are eligible for this initial rapid distribution. However, providers must accept the Terms and Conditions (as further detailed below), which effectively create some restrictions on the receipt and use of these payments. If a provider is eligible for the payment and complies with and accepts the Terms and Conditions, the payments will not need to be repaid to HHS.


What are the terms and conditions to receive the payments?

  • The payment of these funds is conditioned on the healthcare provider's acceptance of the Terms and Conditions, which must occur within 30 days of receipt of payment. 
  • Among other things, the Terms and Conditions require recipients to provide “diagnoses, testing, or care for individuals with possible or actual cases of COVID-19” and to only use the funds to “prevent, prepare for, and respond to [COVID-19].” The Terms and Conditions further state that the payment “shall reimburse the [r]ecipient only for health care related expenses or lost revenues that are attributable to [COVID-19].” 
  • Recipients must also agree not to seek collection of out-of-pocket payments from a COVID-19 patient that are greater than what the patient would have otherwise been required to pay if the care had been provided by an in-network provider.
  • To ensure compliance with the Terms and Conditions, fund recipients must maintain appropriate records and cost documentation.  Recipients must further submit reports as HHS determines necessary. The form and content of these reports will be identified in future instructions.
  • If a provider receives payment and does not wish to (or cannot) comply with the Terms and Conditions, the provider must contact HHS within 30 days of receipt of payment and then remit the full payment to HHS. Appropriate HHS contact information will be provided soon.


What to do if you are an eligible provider to receive the payments?

  • HHS has partnered with UnitedHealth Group (UHG) to provide rapid payment to providers eligible for the distribution of the initial $30 billion in funds. Providers will be paid via Automated Clearing House account information on file with UHG or the Centers for Medicare & Medicaid Services (CMS).
  • The automatic payments will come to providers via Optum Bank with “HHSPAYMENT” as the payment description.
  • Providers who normally receive a paper check for reimbursement from CMS will receive a paper check in the mail for this payment as well, within the next few weeks.
  • Within 30 days of receiving the payment, providers must sign an attestation confirming receipt of the funds and agreeing to the Terms and Conditions. The portal for signing the attestation will be open the week of April 13, 2020 and will be linked on the HHS’ webpage.


How will the payments be distributed?

  • All relief payments are made to the billing organization according to its Taxpayer Identification Number (TIN).
  • Large Organizations and Health Systems: Large Organizations will receive relief payments for each of their billing TINs that bill Medicare. Each organization should look to the part of their organization that bills Medicare to identify details on Medicare payments for 2019 or to identify the accounts where they should expect to receive relief payments.
  • Employed Physicians: Employed physicians should not expect to receive an individual payment directly. The employer organization will receive the relief payment as the billing organization.
  • Physicians in a Group Practice: Individual physicians and providers in a group practice are unlikely to receive individual payments directly, as the group practice will receive the relief fund payment as the billing organization. Providers should look to the part of their organization that bills Medicare to identify details on Medicare payments for 2019 or to identify the accounts where they should expect relief payments.
  • Solo Practitioners: Solo practitioners who bill Medicare will receive a payment under the TIN used to bill Medicare.


How are payment distributions determined?

  • Providers will be distributed a portion of the initial $30 billion based on their pro rata share of total Medicare FFS reimbursements in 2019. Total FFS payments were approximately $484 billion in 2019.
  • A provider can estimate its payment by dividing its 2019 Medicare FFS (not including Medicare Advantage) payments they received by $484,000,000,000, and multiply that ratio by $30,000,000,000. Providers can obtain their 2019 Medicare FFS billings from their organization's revenue management system.

As an example: A community hospital billed Medicare FFS $121 million in 2019. To determine how much they would receive, use this equation: $121,000,000/$484,000,000,000 x $30,000,000,000 = $7,500,000


HHS states that this quick dispersal of funds will provide relief to both providers in areas heavily impacted by the COVID-19 pandemic, as well as to those providers who are struggling financially due to healthy patients delaying care and canceling elective services. Jackson Kelly will continue to prepare updates as information about additional Title III CARES Act funding becomes available.


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