Disbursements of the Remaining CARES Act Money for Healthcare

The $100 billion CARES Act funding Congress approved for hospitals in late March is now releasing more funds allocated for providers hit hardest by the COVID-19 outbreak and hospitals in rural areas that are at a high risk of closing during the pandemic.

The $10 billion allocated for hospitals in areas hit hardest by the COVID-19 outbreak is being doled out by the United States Department of Health and Human Services (HHS). The actual amount is closer to $12 billion and will be released to 395 hospitals that provided inpatient treatment to 100 or more COVID-19 patients through April 10. The state with the most hospitals receiving this funding is New York at 90. New Jersey is next on the list at 53, followed by Illinois at 33 and Michigan at 30. The formula was predicated on data received on April 24^th by providers which included COVID-19 admissions, intensive care unit beds and also took into account the amount of providers Medicare and Medicaid disproportionate share and uncompensated care payments.

Another $10 billion allocated for nearly 8,000 rural hospitals and health centers will receive a direct deposit payment in the coming days. Providers will receive a base payment and a percentage of their annual expenses based on 2018 cost report data. Current understanding is the same portal hhs.gov/providerrelief will be used to supply required information if a cost report was not filed

Consistent with the other distributions, there are strings attached. As a condition of receiving the funds, providers must agree“not to seek collection” of out-of-pocket payments from COVID-19 patients that exceed what the patient would have paid at an in-network provider, essentially an attempt to quash potential surprise billing issues.

Providers will again have to sign an attestation confirming the funds were received, agree to the terms and conditions and confirm the accuracy of the CMS cost reports.

HHS allocated $30 billion to providers out of the $100 billion to expedite providers getting money as quickly as possible. $30 billion was distributed immediately, proportionate to providers’ share of Medicare fee-for-service 2018 revenue, as a percentage of the total $484 billion of nationwide 2018 Medicare spend. On Friday, April 10, $26 billion was delivered to bank accounts. The remaining $4 billion of the expedited $30 billion distribution was sent on April 17.

In addition to the above, the Covid-19 Uninsured Program Portal, which allows healthcare providers who have conducted COVID-19 testing or provided treatment for uninsured COVID-19 individuals on or after February 4, 2020 to request claims reimbursement, is now live. Providers can access the portal to register for the program at COVIDUninsuredClaim.HRSA.gov. The claims will be paid at a Medicare rate of reimbursement. No dollar amount has been assigned to this.

HHS Secretary Alex Azar said the rest of the original $100B of funds will be reserved for a second tranche of COVID-19 hotspot funding.

$20 billion -HHS has launched a portal at hhs.gov/providerrelief where providers can submit revenue information for the $20 billion in general funds. Providers who have filed a 2018 cost report with CMS will not have to initially provide information to receive the funds. The distribution of funds began on April 24^th and will go out weekly on a rolling basis.

$10 billion– Hospitals in areas hit hard by the COVID-19 outbreak. Data was to be submitted by April 24^th to HHS. This includes, for each facility with a Medicare Tax Identification Number (TIN), its total number of intensive care unit beds (as of April 10, 2020), its total number of admissions with a COVID-19 diagnosis (from Jan. 1, 2020 to April 10, 2020) and its National Provider Identifier.

$10 billion– Allocated for rural hospitals and health centers will be distributed based on operating expenses, again if 2018 cost reports have been filed providers should receive the funds. Current understanding is the same portal hhs.gov/providerrelief will be used to supply required information if a cost report was not filed.

On April 24, 2020 President Donald Trump signed into law the Paycheck Protection Program and Health Care Enhancement Act a $484 billion relief package that amends certain portions of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).

The bill includes an additional $75 billion for the U.S. Department of Health and Human Services (HHS) to distribute through grants and other mechanisms to hospitals, health systems and other healthcare providers aimed at reimbursing providers for healthcare expenses and lost revenue attributable to COVID-19. The statutory language of this bill mirrors that of the original grant under the CARES Act creating the relief fund.

The bill provides the Secretary of HHS broad discretion to develop programs under these appropriations. Consistent with the CARES Act, the bill specifies that providers may — but are not required to — use the funds for expenses related to building or construction of temporary structures, leasing of properties, purchasing medical supplies and equipment (including personal protective equipment and testing supplies), increased workforce utilization and training, establishing emergency operation centers, retrofitting facilities and managing the surge in capacity, among other activities.

This information contained above continues to evolve as HHS releases further guidance.