CARES Act: $100 Billion Healthcare Funding


As we continue to feel the impacts of the COVID-19 virus on our nation’s healthcare system, execution of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, signed by the President on March 27, 2020, continues to provide necessary relief during the crisis.

Included in the bill was a $100 billion emergency fund for eligible healthcare providers. The funds will be disbursed by the Department of Health and Human Services (HHS) through the Public Health and Social Services Emergency Fund. The intent of the funding is to reimburse eligible providers for healthcare-related expenses and/or lost revenues (generally from loss of elective and non-urgent procedures) attributable to the COVID-19 crisis.

Conditions for Eligibility:

  • The provider billed Medicare in 2019.
  • The provider currently provides services for individuals with possible or actual cases of COVID-19.
  • The provider is not terminated from participation in Medicare, Medicaid, or other federal healthcare programs.
  • The provider does not currently have its Medicare billing privileges revoked.

On April 10, 2020, HHS began distributing approximately $30 billion of the total grant funding to all healthcare facilities and providers that received Medicare funding for fee-for-service (FFS) reimbursements during 2019, including Medicare Part A providers and Medicare Part B suppliers. No application was necessary for this initial funding and the allocation was based the providers’ portion of Medicare FFS reimbursements (excluding Medicare Advantage) as compared to total reimbursements under the programs ($484 billion). Funds were received immediately by those eligible providers set up with direct deposit with Medicare and should be expected in the next couple weeks for those providers who utilize paper check reimbursements. Although no initial application was required, the CARES act requires certain representations to be made by the recipient.

Terms and Conditions:

  • Within 30 days of receipt, recipients must sign an attestation confirming receipt and agreeing to terms and conditions. The portal to submit the form was opened on the Provider Relief Fund. Providers who do not wish to follow the terms and conditions of the funding should contact HHS within 30 days and remit full repayment.
  • Recipients of this initial wave of funding must also agree not to balance-bill any patient for COVID-related treatment and limit collection of out-of-pocket payments from COVID-19 patients to what would be collected from patients who receive in-network care from the provider.
  • Funds received will not be used to reimburse expenses or losses that have been reimbursed from other sources or expenses that additional sources are required to reimburse.
  • Similar to other federal awards, funds cannot be used to pay for abortions, other activities, and are limited to the extent that they can be used to pay for certain executive-level salaries.
For more information on this topic, please
contact a member of
Withum’s Healthcare Services Group.

HHS Reporting Requirements:

  • Within 10 days of the end of each quarter, any recipient receiving more than $150,000 total in funds in response to the COVID-19 crisis (including the CARES Act and any other act primarily making appropriations for the coronavirus response and related activities), shall submit a report to the Secretary and the Pandemic Response Accountability Committee. These reports must contain:
    • Total amount of funds received from HHS under any one of the COVID-19 response acts.
    • The amount of funds received that were expended or obligated for each project or activity.
    • A detailed list of all projects or activities for which large covered funds were expended or obligated, including: the name and description of the project or activity, and the estimated number of jobs created or retained by the project or activity, where applicable.
    • Detailed information on any level of sub-contracts or subgrants awarded by the covered recipient or its subcontractors or subgrantees, to include the data elements required to comply with the Federal Funding Accountability and Transparency Act of 2006 allowing aggregate reporting on awards below $50,000 or to individuals, as prescribed by the Director of the Office of Management and Budget.
  • Recipients shall maintain appropriate records and cost documentation including, as applicable, documentation to meet federal “Financial Management” and “Record Retention and Access” standards, and other information required by future program instructions to substantiate the reimbursement of costs. Written policies and procedures should be maintained and accessible to ensure compliance with these standards. To assist with required reporting, recipients should establish tracking mechanisms for COVID-19 related losses, costs, and consider separate billing codes for COVID-19 cases. The center for Disease Control has provided a link to a suggested lost revenue and expense tracker.

With the ever-changing nature of the world we live in, it is important for providers who have received this funding to monitor their use of funds and ensure compliance with the terms and conditions issued from HHS. As discussed earlier, there is still unallocated funding and expected future stimulus legislation that could be directed towards healthcare. The next distribution from the $100 billion relief fund is expected to be $50 billion, and it will be more focused on skilled nursing facilities and tilted toward Medicaid providers that have been hit by COVID-19. All providers should contact HHS and explain their current situation and needs for additional funding. Additionally, providers should consider other alternatives for relief and assistance during this crisis.

Other Considerations for Healthcare Providers:

  • Accelerated and Advanced Payment Program (AAPP) – a streamlined version of existing policy that allows Medicare Administrative Contractors (MACs) to issue no-interest short term loan payments in certain circumstances including national emergencies.
    • At this time, approximately $51 billion has been advanced, with over 30,000 requests. Processing seems to be roughly 4-6 days to receive funds.
  • Telehealth restrictions have been temporarily lifted or relaxed. The new relaxed standards cover the delivery of services, access to services, and types of services available.
  • Seek additional financing options from your trusted lender (line of credit extensions or increases).
  • Review terms with vendors (extend payment terms) and seek alternative sources of supplies in case distribution abilities become disrupted.
  • Cut or delay non-essential expenses such as travel, marketing, etc.

While there is still uncertainty that exists, we continue to learn more about the legislation, funding opportunities, and relief for the healthcare industry. As we learn more, the ability for providers to achieve their mission in providing quality healthcare services to our communities becomes more realistic.

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