CARES Act Provider Relief Fund

The CARES Act Provider Relief Fund is a source of financial support for healthcare providers on the front lines of the coronavirus pandemic. Eligible providers include hospitals, nursing homes, physicians, and other healthcare professionals. Following is a summary of the distributions issued and steps providers must follow after receiving the funds.

General Allocation – Tranche 1

The initial $30 billion was allocated between April 10 and April 17 for general distribution to Medicare facilities and providers, including physician practices, impacted by COVID-19. The amount of the distribution was based on the 2019 traditional Medicare fee-for-service payments. This initial payment equated to just under 6.2% of a provider’s 2019 payments.

• Within 90 days of receipt, a facility or provider must complete an attestation agreeing to the terms and conditions of the payment. (On May 22, the U.S. Department of Health & Human Services (HHS) announced an extension of the deadline for completing the attestation, from 45 days to 90 days).

General Allocation – Tranche 2

Distribution of a second allocation totaling $20 billion began on Friday, April 24. This allocation was based on 2018 net patient revenue for all payers, as reported on the Medicare cost report, and can be calculated as 2% of 2018 net revenue, less the amount of the Tranche 1 payment. If facilities received more than 2% of their 2018 net revenue in the first tranche payment, then no additional payment was issued in the second tranche.

• Within 90 days of receipt, a facility or provider must complete an attestation agreeing to the terms and conditions of the payment.

Facilities or providers that do not file Medicare cost reports, such as physician practices, did not receive an automatic distribution of the second tranche. In order to receive the additional funds, these providers are required to submit revenue information via the General Distribution Portal at https://covid19.linkhealth.com/docusign/#/step/1. The revenue information must be submitted by June 3, 2020. HHS intends to distribute additional funds or respond to requests within 10 business days of the submission. Required information is as follows:

• Most recently filed federal tax return (there are limited exceptions allowing a financial statement to be submitted in lieu of a tax return).
• Estimate of lost revenue for March 2020 and April 2020.

In addition, any provider who received payments from the Provider Relief Fund in either Tranche 1 or Tranche 2 must submit the above information on the General Distribution Portal, after attesting to each payment received. This submission is also due June 3, 2020.

Targeted Distribution

On May 22, 2020, HHS began issuing additional funding to certified skilled nursing facilities that are incurring additional expenses and losing revenue due to the COVID-19 pandemic. Skilled nursing facilities are to receive a $50,000 fixed distribution plus an add-on of $2,500 per bed.

• Within 90 days of receipt, a facility or provider must complete an attestation agreeing to the terms and conditions of the payment.

Additional targeted allocations have been issued to hospitals in COVID-19 high-impact areas, rural providers, and tribal healthcare providers. There may also be additional funding to dentists and Medicaid-only providers, as well as healthcare providers for COVID-19-related treatment of the uninsured.

Quarterly Reporting

Any provider, including physician practices, that has received $150,000 or more in funding relief is required to submit quarterly reporting as described in the terms and conditions. Reporting is set to begin with the quarter ending June 30, 2020, and will be due 10 days after the end of each quarter. At this time, however, guidance about the type of documentation that will be required has not been made available. Future directions will be issued by the HHS Secretary.

Summary

1. All providers must individually attest to the terms and conditions for any Provider Relief Funds received, within 90 days of the receipt of each payment.
2. All providers who received a general distribution must upload their current Federal tax return and an estimate of the March 2020 and April 2020 lost revenue to the General Distribution Portal by June 3, 2020.
3. Any provider who did not receive a second tranche payment may request additional funding by submitting their current federal tax return and an estimate of the March 2020 and April 2020 lost revenue to the General Distribution Portal by June 3, 2020.
4. Stay tuned for information about quarterly reporting, when available.

Your Marcum healthcare industry advisor is here to answer any questions you may have regarding the Provider Relief Funding, attestation and reporting requirements. Please note that the information and dates provided above are current as of today and may change or be updated in the future.

Coronavirus Resource Center

Have more questions about the impact of the coronavirus on your business? Visit Marcum’s Coronavirus Resource Center for up-to-date information.