The director of the Centers for Medicare and Medicaid Services (CMS), Seema Verma made a brief announcement on April 6th that $30 billion of the $100 billion in funding from the recently enacted CARES Act, would start being distributed this week as grants directly deposited to Medicare providers.  Further specifics on these grants were released as providers began to receive payments on April 10th.

While some aspects are yet to be known, here is a high-level overview on the Provider Relief Fund payments:

  • These payments are not loans and do not have to be repaid. This payment is different than the Medicare Advanced/Accelerated Payment program.
  • All facilities and providers that received Medicare fee-for-service (FFS) reimbursements in 2019 are eligible for this initial rapid distribution.
  • All relief payments are made to the billing organization according to its Taxpayer Identification Number (TIN).
    • Payments to practices that are part of larger medical groups will be sent to the group’s central billing office.
    • Employed physicians and providers in a group practice are unlikely to receive individual payments, as the funds are being directed to billing organizations
    • Solo practitioners will receive payments under the TIN used to bill Medicare
  • The amount of funds received is based on the amount of fee-for-service Medicare payments from 2019. To estimate the amount, take total amount received from Medicare in 2019 and divide by $484 billion (this the total amount Medicare paid in 2019), then multiply by $30 billion.
  • 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. Note: one group who already received this grant had this on their electronic deposit, “US HHS Stimulus”
    • 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.

Some Conditions Apply

There are some conditions that apply when accepting the relief payments.  Providers must sign an attestation confirming receipt of the funds and agreeing to the terms and conditions (click here to see terms and conditions) of payment within 30 days.  The HHS website will open a portal the week of April 13th to complete the process.  It is advisable to read the terms and conditions thoroughly before completing the required attestation.  A few stipulations to be aware of:

  • 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 otherwise been required to pay if the care had been provided by an in-network provider.
  • Recipients must agree to cooperate in an audit and maintain appropriate records and documentation to be provided at the request of the Director of HHS
  • At the end of each fiscal quarter, if a recipient is receiving more than $150,000 in aid due to any of the coronavirus response acts, they must submit a report to the Secretary and the Pandemic Response Accountability Committee. The specifics of what the report should contain are included in the terms and conditions.
  • Recipients must certify that the funds will only be used to prevent, prepare for, and respond to the coronavirus and reimbursement is only for healthcare related expenses or lost revenues attributed to COVID-19.
  • Recipients must certify that they will not use the payment to reimburse expenses or losses that have been reimbursed from other sources or that other sources are obligated to reimburse.

Concerned that there could be a conflict or overlap with the recently enacted Paycheck Protection Program, we reached out to industry expert Tom Greeson, a partner with the firm Reed Smith LLP, to solicit his thoughts and additional insights.  He gave us permission to share the following:

  1. It appears that the PPP and Provider Relief Payment cannot be used for the same items.  We expect to see additional guidance (and one hopes flexibility) on this very soon, but for now it’s safer to assume no overlap in the use of the funds. Note that the Act spells out what the funds can be used for: “building or construction of temporary structures, leasing of properties, medical supplies and equipment including personal protective equipment and testing supplies, increased workforce and trainings, emergency operation centers, retrofitting facilities, and surge capacity.”
  2. To the extent there is overlap, it seems like the language, “That these funds may not be used to reimburse expenses or losses that have been reimbursed from other sources or that other sources are obligated to reimburse” would certainly seem to preclude the double dip.  Radiology groups are going to have non-physician comp expenses, such as malpractice costs, their payments to third-party billing companies and legal fees at times. The reality is that it will be hard to avoid overlap. And to the extent all other costs are paid first, my take is that any residual sums after all other qualified expenses are paid from these funds, those should be available for the company’s remaining expenses, which may include shareholder payroll.  HHS intends that these relief funds to be used for the treatment of active COVID-19 cases, and that is certainly what radiology groups are doing during the public health emergency.
  3. So, for services-oriented companies that have limited overhead other than bottom line shareholder compensation, HHS is going to need to put out guidance to cover this very issue.

In addition, here are two helpful links with more information:

Click here for more detailed information on the CARES Act Provider Relief Fund.  And, click here for the Fact Sheet from the House Ways and Means Committee.

Finally, as these grant funds are for Covid-19 provider relief and not tied to fee-for-service payments received as a result of our billing services, no fee from Advocate will apply to any of these funds.

As always, Advocate will keep you up to date on this and other relief topics impacting medical practices as they become available

Todd Walker                                     Kirk Reinitz
CEO                                                    President