Knowledge and Insights

On March 27, 2020, the President signed the bipartisan CARES Act that provides $100 billion in relief funds to hospitals and other healthcare providers on the front lines of the coronavirus response. This funding will be used to support healthcare-related expenses or lost revenue attributable to COVID-19, and to ensure uninsured Americans can get testing and treatment for COVID-19.

$30 billion is being distributed immediately with payments arriving via direct deposit beginning April 10, 2020, to eligible providers throughout the American healthcare system. These are payments, not loans, to healthcare providers and will not need to be repaid. This is different from the Centers for Medicare & Medicaid Services’ (CMS) Accelerated and Advance Payment Program which is a loan program to help ensure providers and suppliers have the resources needed to combat the pandemic that must be paid back.

Who is Eligible?

• All facilities and providers that received Medicare fee-for-service (FFS) reimbursements in 2019 are eligible for this initial rapid distribution.

• Payments to practices that are part of larger medical groups will be sent to the group’s central billing office. All relief payments are made to the billing organization according to its Taxpayer Identification Number (TIN).
  • Large organizations will receive relief payments for each of their billing TINs that bill Medicare.
  • Employed physicians should not expect to receive an individual payment directly. The employer organization will receive the relief payment as the billing organization.
  • Individual physicians and providers in a group practice are unlikely to receive individual payments directly, as the group practice will receive the relief fund payment as the billing organization.
  • Solo practitioners who bill Medicare will receive a payment under the TIN used to bill Medicare.
  • As a condition to receiving these funds, 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.

• If you ceased operation as a result of the COVID-19 pandemic, you are still eligible to receive funds so long as you provided diagnoses, testing or care for individuals with possible or actual cases of COVID-19. Care does not have to be specific to treating COVID-19. U.S. Department of Health & Human Services (HHS) broadly views every patient as a possible case of COVID-19.

How are distributions determined?

• Providers will be distributed a portion of the initial $30 billion based on their share of total Medicare FFS reimbursements in 2019.

• A provider can estimate their payment by dividing their 2019 Medicare FFS (not including Medicare Advantage) payments they received by $484,000,000,000, and multiply that ratio by $30,000,000,000. Providers can obtain their 2019 Medicare FFS billings from their organization’s revenue management system.

 What should you do if you are an eligible provider?

The U.S. Department of Health and Human Services (HHS) has partnered with UnitedHealth Group (UHG) to provide the rapid payments to providers. Providers will be paid via Automated Clearing House account information on file with UHG or the CMS. The automatic payments will come to providers via Optum Bank with “HHSPAYMENT” as the payment description. 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.

Within 30 days of receiving the payment, providers must sign an attestation confirming receipt of the funds and agreeing to the terms and conditions of payment. The portal for signing the attestation will be open the week of April 13, 2020, and will be linked on www.hhs.gov/provider-relief.

HHS payment of this initial tranche of funds is conditioned on the healthcare provider’s acceptance of the Terms and Conditions, which acceptance must occur within 30 days of receipt of payment. Not returning the payment within 30 days of receipt will be viewed as acceptance of the Terms and Conditions. If a provider receives payment and does not wish to comply with these Terms and Conditions, the provider must contact HHS within 30 days of receipt of payment and then remit the full payment to HHS as instructed.

If you are a healthcare provider or supplier and have questions regarding the CARES Act, or would like advice or assistance as it relates to the provider relief fund, Mercadien can help you determine your eligibility, navigate filling out forms and applications, and documenting certification.  Please contact Frank Pina, CPA, Managing Director at [email protected] or 609-689-2319.

DISCLAIMER: This advisory resource is for general information purposes only. It does not constitute business or tax advice, and may not be used and relied upon as a substitute for business or tax advice regarding a specific issue or problem. Advice should be obtained from a qualified accountant, tax practitioner or attorney licensed to practice in the jurisdiction where that advice is sought.