Update (June 21, 2021): Healthcare providers receiving Provider Relief Fund payments will have to report to the government on using such payments before certain newly announced spending deadlines. The first spending deadline is June 30, 2021, with a 90-day reporting period beginning July 1, 2021, to report on funds received in the first half of 2020. For the most recent updates on future deadlines and further guidance on Provider Relief Fund reporting, visit our Provider Relief Fund reporting page.
Update: On Oct. 1, 2020, the U.S. Department of Health and Human Services, through the Health Resources and Services Administrative (HRSA), announced $20 billion in new Phase 3 General Distribution Funding for providers from the Public Health and Social Services Emergency Fund (Provider Relief Fund). For more information, please see our Oct. 2, 2020, alert.
Please find previous McGuireWoods alerts discussing the CARES Act
Provider Relief Fund here:
On July 17, 2020, the U.S. Department of Health & Human Services (HHS)
announced in a
that providers participating in state Medicaid programs, the Children’s
Health Insurance Program (CHIP) and/or Medicaid/CHIP-managed care programs
now have until Aug. 3, 2020, to apply for funding under
the approximately $15 billion Public Health and Social Services Emergency
Fund (Provider Relief Fund) Medicaid and CHIP Distribution (Medicaid and
CHIP Distribution). As discussed in a
McGuireWoods legal alert, healthcare providers are eligible for the Medicaid and CHIP Distribution
if, among other requirements, they billed a state Medicaid/CHIP program
and/or a Medicaid/CHIP managed care plan for healthcare-related services
between Jan. 1, 2018, and Dec. 31, 2019; provided patient care after Jan.
31, 2020; and were not eligible for the earlier $50 billion Provider Relief
Fund general distributions for Medicare providers.
Similarly, on July 20, 2020, HHS also extended the deadline until Aug. 3, 2020, for dental providers to apply for Provider
Relief Fund payments (Dental Distribution) discussed in a
July 13 McGuireWoods legal alert. HHS also announced the release of up to $10
billion in a second round of high-impact COVID-19 area funding from the
Provider Relief Fund to hospitals, beginning the week of July 20, 2020 (Hospital Hot-Spot Distribution).
By way of background, the Provider Relief Fund was created through an
appropriation of collectively $175 billion in the Coronavirus Aid, Relief,
and Economic Security Act (CARES Act) and the Paycheck Protection Program
and Health Care Enhancement Act to reimburse eligible providers for
healthcare-related expenses and lost revenues attributable to COVID-19.
Below are key takeaways from HHS’ announcement for Medicaid and CHIP
providers, dental providers and hospitals in COVID-19 hot spots.
Medicaid and CHIP Distribution and Dental Distribution
Deadline Extended to Aug. 3. Eligible providers originally had until July 20, 2020, to submit
their applications for the Medicaid and CHIP Distribution. By extending
the application deadline to Aug. 3, 2020, such Medicaid and CHIP
Distribution-eligible providers will have two additional weeks to
submit their application information through the Enhanced Payment Portal.
On July 20, 2020, HHS
that the application deadline for dental providers applying under the
Dental Distribution has similarly been extended to Aug. 3, 2020. HHS
has updated its
to reflect the new deadline. Further information on the Dental
Distribution, including details on the application process and
eligibility criteria, can be found in a
McGuireWoods legal alert.
TIN Validation. HHS updated its
to clarify that providers must submit their TIN for validation by the end of day on Aug. 3, 2020, against its curated list,
to be eligible for funding from the Medicaid and CHIP Distribution. If
providers do not receive the result of their validation until after
Aug. 3, HHS states that providers will still be eligible to complete
their applications. Though providers have until Aug. 3 to validate
their TINs, providers should validate as soon as possible to minimize
any delays in processing applications, as TIN validation has been
taking a few days to complete. For Dental Distribution providers, a
similar TIN validation will be required against the HHS curated list.
HHS has committed to conducting additional analysis if the dental
provider does not appear on HHS’ existing list but has not committed to
allowing similar post-Aug. 3 applications like in the Medicaid and CHIP
Distribution. Therefore, dental providers are encouraged to begin
validating their TIN as soon as possible.
Gross Revenue Clarification. HHS updated its
to clarify that when reporting “gross revenue” in Field 10 of the
Medicaid and CHIP Distribution application, providers should be
reporting their net patient revenue plus other operating income for
this metric. HHS states that net patient revenue means “gross patient
revenue less contractual adjustments, charity care/financial
assistance, and bad debt expense.” On the other hand, HHS reiterated in
a new FAQ that other revenues should be excluded in the amount reported
in Field 10, while extending revenue that should not be reported to
include rental income, grants and contributions, joint venture income,
and investment income. While similar guidance has not been provided for
the Dental Distribution, as both distributions use the same
application, dental providers should similarly scrutinize this
Funding Formula Clarification. HHS also updated its
to answer a question on whether providers with high-Medicaid and
uninsured patient volumes would receive additional funding from the
Medicaid and CHIP Distribution. HHS answered “no.” Instead, HHS
reiterated that its methodology/formula under the Medicaid and CHIP
Distribution will be based upon 2 percent of revenues from patient care
for the provider’s 2017, 2018 or 2019 calendar year, depending on what
tax year it last filed returns. Such providers may be eligible for
other funding options, including reimbursement for testing or treating
uninsured patients for COVID-19, discussed in an
McGuireWoods legal alert, and targeted distributions including those
for rural and safety-net providers, discussed most recently in a
McGuireWoods legal alert.
Hospital Hot-Spot Distribution
Second Round of Funding. HHS’ announcement that it would distribute a second round of funding
through the Hospital Hot-Spot Distribution comes in light of HHS’
previous requests for hospitals to submit data on their COVID-19
positive-inpatient admissions for the period of Jan. 1, 2020, through
June 10, 2020, discussed in a
McGuireWoods legal alert. HHS used these submissions to determine
eligibility and allocation of the remaining funds to eligible
hospitals. Collectively with the previous round of hospital funding,
HHS has targeted over 12 percent of the Provider Relief Fund on
hard-hit hot-spot hospitals based on COVID-19 positive admissions.
Eligibility and Allocation Methodology. HHS based the allocation of the second round of the Hospital Hot-Spot
Distribution on hospitals with more than 161 COVID-19 admissions before
June 10, 2020, or at least one admission per day, or for hospitals that
had more COVID-19 admissions than the average ratio of COVID-19
admissions to beds. HHS will provide $50,000 per eligible admission in
this second round, compared to the $76,975 per eligible admission
hospitals received during the first round. Providers can view the
current list of hospital recipients on
and can view a
of funds received.
In recent weeks, HHS has continued to release a series of updates to its
Provider Relief Fund FAQs document for the prior distributions. As Medicaid
and CHIP Distribution-eligible providers prepare their applications,
McGuireWoods stands ready to assist with any questions about this updated
information. McGuireWoods will continue to monitor developments regarding
the Provider Relief Fund.
McGuireWoods has published additional thought leadership analyzing how
companies across industries can address crucial business and legal issues related to COVID-19.
In a series of video alerts, McGuireWoods’ healthcare lawyers address
issues providers face and overcoming COVID-19 challenges.