The CARES Act provides $100 billion in relief funds to hospitals and other healthcare providers on the front lines of the coronavirus response. Beginning April 10, 2020, $30 billion in payments began arriving to eligible providers by direct deposit or check. These are payments, not loans, to healthcare providers, and will not need to be repaid. On April 7th, the Centers for Medicare & Medicaid Services Administrator, Seema Verma, when referring to the Provider Relief Payments, said “There are no strings attached, so the healthcare providers that are receiving these dollars can essentially spend that in any way that they see fit.”
Terms and Conditions
However, these payments require providers to accept a lengthy set of Terms and Conditions which themselves are subject to modification and updating. The Terms and Conditions consist of ten pages of requirements, some of which are easy to understand and decide whether to accept (such as prohibition on human trafficking, lobbying, abortion funding, pornography, gun control advocacy) but others will require excellent recordkeeping. Acceptance or rejection of the Terms and Conditions is done through an online portal. If the funds are not specifically rejected, the provider is deemed to have accepted the Terms and Conditions.
The relief funds may be used to prevent, prepare for and respond to coronavirus and reimburse the provider only for health care related expenses or lost revenues that are attributed to coronavirus. The funds cannot be used to reimburse expenses or losses that have been reimbursed from other sources or that other sources are obligated to reimburse. All providers are required to maintain supporting documentation; providers that receive $150,000 or more are subject to quarterly reporting.
The reporting must contain the total amount of funds received from HHS under the various coronavirus legislation; 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; and detailed information on any level of subcontracts or subgrants awarded by the covered recipient or its subcontractors or subgrantees .
The provider must maintain records and cost documentation as required by 45 CFR Section 75.302, 45 CFR Sections 75.361 through 75.365. Additional instruction on documentation is anticipated to be released; in any event, the documentation will be significant and subject to audit and return.
- Put the relief funds in a segregated account(s) so that they can be accounted for properly.
- Identity any other sources of reimbursement (e.g., business interruption insurance) to avoid improper reimbursement.
- Work with your finance and accounting professionals to adopt the written procedures required by the CFR Sections.
- Look at the expenses associated with: (a) Preparing: for example, cancelling elective procedures, (b) Care: cost of patient visits vs. revenue generated, (c) Prevention: consider measures undertaken to protect visitors, patients and staff.
- Assess what portion of general expenses (rent, insurance) can be allocated to the COVID-19 emergency and what specific items (enhanced/additional PPE, staff and vendor expense, physical plant changes such as additional dividers/shields) can be allocated to the COVID-19 emergency.
- Be sure not to allocate any losses to Executive Pay.
(203) 578-4284; [email protected]
Trudie R. Hamilton
(203) 575-2615; [email protected]
David S. Hardy
(203) 784-3199; [email protected]
(203) 575-2454; [email protected]
Leah M. Nollenberger
(203) 575-2685; [email protected]
Tamara M. Nyce
(203) 578-4275; [email protected]
Ann H. Zucker
(203) 252-2652; [email protected]