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HHS CARES Act Provider Relief Fund Next Steps

This blog was written and produced by Margaret Lally and Robert Nasso, CPA at The Bonadio Group. Looking to get in touch with Margaret or Robert? Reach out today: Margaret Lally mlally@bonadio.com, Robert Nasso rnasso@bonadio.com.

With much of the Provider Relief Fund monies distributed to providers, there are several important next steps to consider. Providers who received Medicare reimbursement in 2019 should have received at least one payment of roughly 6.2% of 2019 Medicare reimbursement as part of the $30 billion first round of payments. Providers that reported net patient service revenue on their 2018 cost report should have received a second payment from a $20 billion allocation that, when netted with the first payment, should approximate 2% of 2018 net patient service revenue. Below are items to consider and follow-up actions providers need to be aware of:

Attestation Portal

Providers who received any payments must use the attestation portal to confirm receipt of the funds and agree to terms and conditions within 45 days of receipt (On May 7 it was announced that the 30-day deadline was extended to 45 days from payment). HHS has indicated the portal has been modified to allow providers to return funds if they do not wish to agree to the terms and conditions, or if they believe they have received an over-payment. HHS will assume a provider agrees to the terms and conditions if no response is received within 30 days. The attestation portal can be found here.

General Distribution Portal

Providers who received any payments must use the General Distribution Portal to submit revenue information for verification. Lost revenues for March and April can also be reported. Providers who received the first payment but not a second payment can report revenue and potentially receive a second payment. Providers will need the payment amounts with check/transaction numbers, TINs of entities that have received payments, and copies of the most recently filed tax forms. The first few screens of the portal look almost identical to the attestation portal, but the distinct general distribution portal is here.

Terms & Conditions

Providers must certify that the monies will be used to “prevent, prepare for, or respond to coronavirus and can be used to cover expenses and lost revenues related to the pandemic. Providers must also ensure that the losses and expenses reimbursed through the Provider Relief Fund have not been paid from other sources or are obligated to be paid from another source. Providers must adhere to reporting requirements and must also agree to cooperate with any future audits. The terms and conditions reference quarterly reporting for providers receiving more than $150,000 which would be due 10 days after the end of each calendar quarter, putting the first due date on July 10, 2020. Detailed documentation of lost revenues, expenses, and revenue sources used to pay for COVID-related expenses should be maintained in preparation for potential audits.

Potential Claw-Backs

The first payment was based on approximately 6.2% of a providers’ 2019 Medicare reimbursement. Since the calculation of the sum of the two payment tranches was based on 2018 net patient revenue, some providers may feel they were overpaid in the first payment. On May 5, an HHS spokesperson said, “Generally, HHS does not intend to recoup funds as long as a provider’s lost revenue and increased expenses exceed the amount of Provider Relief funding [the] provider has received.” As expenses related to COVID-19 are not reported on any of the portals, future audits may be the mechanism used to determine if an overpayment has occurred.

If you have questions or need additional assistance, please feel free to reach out to us.

The information and advice we are providing for this matter relates to COVID-19 legislative relief measures. Because legislative efforts are still ongoing, we expect that there may be additional guidance and clarification from regulators that could modify some of the advice and information provided to you, after the conclusion of our engagement. We, therefore, make no warranties, expressed or implied, on the services provided hereunder.