Update (June 21, 2021): Healthcare providers receiving Provider Relief Fund payments will have to report to the government on using such payments before certain newly announced spending deadlines. The first spending deadline is June 30, 2021, with a 90-day reporting period beginning July 1, 2021, to report on funds received in the first half of 2020. For the most recent updates on future deadlines and further guidance on Provider Relief Fund reporting, visit our Provider Relief Fund reporting page.
Update: On Oct. 1, 2020, the U.S. Department of Health and Human Services, through the Health Resources and Services Administrative (HRSA), announced $20 billion in new Phase 3 General Distribution Funding for providers from the Public Health and Social Services Emergency Fund (Provider Relief Fund). For more information, please see our Oct. 2, 2020, alert.
Please find previous McGuireWoods alerts discussing the CARES Act Provider Relief Fund here: April 10, April 14, April 23, April 27, April 29, May 6, May 7, May 22, June 11 and July 13.
On July 17, 2020, the U.S. Department of Health & Human Services (HHS) announced in a press release that providers participating in state Medicaid programs, the Children’s Health Insurance Program (CHIP) and/or Medicaid/CHIP-managed care programs now have until Aug. 3, 2020, to apply for funding under the approximately $15 billion Public Health and Social Services Emergency Fund (Provider Relief Fund) Medicaid and CHIP Distribution (Medicaid and CHIP Distribution). As discussed in a June 11 McGuireWoods legal alert, healthcare providers are eligible for the Medicaid and CHIP Distribution if, among other requirements, they billed a state Medicaid/CHIP program and/or a Medicaid/CHIP managed care plan for healthcare-related services between Jan. 1, 2018, and Dec. 31, 2019; provided patient care after Jan. 31, 2020; and were not eligible for the earlier $50 billion Provider Relief Fund general distributions for Medicare providers.
Similarly, on July 20, 2020, HHS also extended the deadline until Aug. 3, 2020, for dental providers to apply for Provider Relief Fund payments (Dental Distribution) discussed in a July 13 McGuireWoods legal alert. HHS also announced the release of up to $10 billion in a second round of high-impact COVID-19 area funding from the Provider Relief Fund to hospitals, beginning the week of July 20, 2020 (Hospital Hot-Spot Distribution).
By way of background, the Provider Relief Fund was created through an appropriation of collectively $175 billion in the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) and the Paycheck Protection Program and Health Care Enhancement Act to reimburse eligible providers for healthcare-related expenses and lost revenues attributable to COVID-19.
Below are key takeaways from HHS’ announcement for Medicaid and CHIP providers, dental providers and hospitals in COVID-19 hot spots.
Medicaid and CHIP Distribution and Dental Distribution
- Deadline Extended to Aug. 3. Eligible providers originally had until July 20, 2020, to submit their applications for the Medicaid and CHIP Distribution. By extending the application deadline to Aug. 3, 2020, such Medicaid and CHIP Distribution-eligible providers will have two additional weeks to submit their application information through the Enhanced Payment Portal. On July 20, 2020, HHS announced that the application deadline for dental providers applying under the Dental Distribution has similarly been extended to Aug. 3, 2020. HHS has updated its website and the FAQs to reflect the new deadline. Further information on the Dental Distribution, including details on the application process and eligibility criteria, can be found in a July 13 McGuireWoods legal alert.
- TIN Validation. HHS updated its FAQs to clarify that providers must submit their TIN for validation by the end of day on Aug. 3, 2020, against its curated list, to be eligible for funding from the Medicaid and CHIP Distribution. If providers do not receive the result of their validation until after Aug. 3, HHS states that providers will still be eligible to complete their applications. Though providers have until Aug. 3 to validate their TINs, providers should validate as soon as possible to minimize any delays in processing applications, as TIN validation has been taking a few days to complete. For Dental Distribution providers, a similar TIN validation will be required against the HHS curated list. HHS has committed to conducting additional analysis if the dental provider does not appear on HHS’ existing list but has not committed to allowing similar post-Aug. 3 applications like in the Medicaid and CHIP Distribution. Therefore, dental providers are encouraged to begin validating their TIN as soon as possible.
- Gross Revenue Clarification. HHS updated its FAQs to clarify that when reporting “gross revenue” in Field 10 of the Medicaid and CHIP Distribution application, providers should be reporting their net patient revenue plus other operating income for this metric. HHS states that net patient revenue means “gross patient revenue less contractual adjustments, charity care/financial assistance, and bad debt expense.” On the other hand, HHS reiterated in a new FAQ that other revenues should be excluded in the amount reported in Field 10, while extending revenue that should not be reported to include rental income, grants and contributions, joint venture income, and investment income. While similar guidance has not been provided for the Dental Distribution, as both distributions use the same application, dental providers should similarly scrutinize this guidance.
- Funding Formula Clarification. HHS also updated its FAQs to answer a question on whether providers with high-Medicaid and uninsured patient volumes would receive additional funding from the Medicaid and CHIP Distribution. HHS answered “no.” Instead, HHS reiterated that its methodology/formula under the Medicaid and CHIP Distribution will be based upon 2 percent of revenues from patient care for the provider’s 2017, 2018 or 2019 calendar year, depending on what tax year it last filed returns. Such providers may be eligible for other funding options, including reimbursement for testing or treating uninsured patients for COVID-19, discussed in an April 29 McGuireWoods legal alert, and targeted distributions including those for rural and safety-net providers, discussed most recently in a July 13 McGuireWoods legal alert.
Hospital Hot-Spot Distribution
- Second Round of Funding. HHS’ announcement that it would distribute a second round of funding through the Hospital Hot-Spot Distribution comes in light of HHS’ previous requests for hospitals to submit data on their COVID-19 positive-inpatient admissions for the period of Jan. 1, 2020, through June 10, 2020, discussed in a June 11 McGuireWoods legal alert. HHS used these submissions to determine eligibility and allocation of the remaining funds to eligible hospitals. Collectively with the previous round of hospital funding, HHS has targeted over 12 percent of the Provider Relief Fund on hard-hit hot-spot hospitals based on COVID-19 positive admissions.
- Eligibility and Allocation Methodology. HHS based the allocation of the second round of the Hospital Hot-Spot Distribution on hospitals with more than 161 COVID-19 admissions before June 10, 2020, or at least one admission per day, or for hospitals that had more COVID-19 admissions than the average ratio of COVID-19 admissions to beds. HHS will provide $50,000 per eligible admission in this second round, compared to the $76,975 per eligible admission hospitals received during the first round. Providers can view the current list of hospital recipients on CDC’s website and can view a state-by-state breakdown of funds received.
In recent weeks, HHS has continued to release a series of updates to its Provider Relief Fund FAQs document for the prior distributions. As Medicaid and CHIP Distribution-eligible providers prepare their applications, McGuireWoods stands ready to assist with any questions about this updated information. McGuireWoods will continue to monitor developments regarding the Provider Relief Fund.
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