July 13, 2020
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: April 10, April 14, April 23, April 27, April 29, May 6, May 7, May 22 and June 11.
On July 10, 2020, the U.S. Department of Health and Human Services (HHS) announced it will allow dentists and other dental providers to apply for relief from the Public Health and Social Services Emergency Fund (Provider Relief Fund). The deadline to apply is July 24, 2020. HHS also announced approximately $3 billion in funding to safety-net acute care hospitals serving a large percentage of vulnerable populations and approximately $1 billion to specialty rural hospitals, urban hospitals with certain rural Medicare designations, and hospitals in small metropolitan areas.
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.
HHS’ latest announcement marks the first time Provider Relief Fund distributions have been designated specifically for dental providers that were not previously eligible for distributions from the Provider Relief Fund’s $50 billion General Distribution or the Medicaid and CHIP Distribution. This much-anticipated announcement comes as relief for dental providers who faced significant lost revenue from COVID-19 earlier this year when they closed offices for an extended period of time. HHS noted that many dental providers already applied for the Medicaid and CHIP Distribution, but this expanded Provider Relief Fund payment will support dental providers who do not bill Medicare or Medicaid.
Below are key takeaways from HHS’ announcement for dental providers, safety-net hospitals and rural providers.
Enhanced Provider Relief Fund Payment Portal and Dental Providers
The Enhanced Provider Relief Fund Payment Portal’s application process is now open for dental providers that previously were not eligible to receive funding through the Provider Relief Fund. Eligible dental providers will have until July 24, 2020, to apply for funding through this Portal.
HHS has not yet announced whether there will be additional conditions on receipt of the payments beyond the Terms and Conditions. Expect HHS to provide further details regarding accessing the Portal and conditions to the funding. McGuireWoods will continue to monitor developments, particularly those on the specific Dental Distribution FAQs document. Until receiving such guidance, based on HHS’ expansion of the Portal to allow applications from dental providers, one may assume guidance related to the Medicaid and CHIP Distribution, including distribution instructions and application forms, is also applicable to dental providers.
Additional Distribution to Safety-Net Hospitals
As detailed in a June 11, 2020, McGuireWoods alert, on June 9, 2020, HHS announced plans to distribute $10 billion in Provider Relief Fund payments to safety-net hospitals (Safety-Net Distribution). HHS is expanding the criteria for payment qualification to include certain acute care hospitals that have (1) a profit margin threshold of less than or equal to 3 percent averaged consecutively over two or more of the last five cost-reporting periods and (2) an annualized uncompensated care cost of at least $25,000 per bed in the most recent cost report. The expanded profitability criteria allow additional community hospitals to meet these thresholds to serve some of the nation’s most vulnerable citizens. The other criterion (Medicare Disproportionate Patient Percentage of 20.2 percent or higher) for acute care hospitals remains the same. HHS expects to distribute nearly $3 billion to 215 acute care facilities, totaling $12.8 billion in targeted distributions from the Provider Relief Fund overall to 959 safety-net hospitals. HHS stated that it expanded the Safety-Net Distribution after learning that certain acute care hospitals that stakeholders, Congress and HHS believed to be the target of the allocation did not previously qualify.
Additional Distribution to Certain Providers From Rural and Small Metro Areas
As detailed in a May 6, 2020, McGuireWoods alert, on May 1, 2020, HHS announced $10 billion in funding to approximately 4,000 rural healthcare providers, including hospitals, health clinics, and health centers. HHS is expanding the existing eligibility criteria to include sole community hospitals or Medicare-dependent hospitals, and hospitals in small metro areas with a designation of a rural referral center. These hospital categories provide care in smaller, non-rural communities, but serve rural populations. Such special Medicare criteria were created to help these hospitals overcome smaller profit margins and limited resources. In addition, HHS expanded the distribution for 10 isolated urban hospitals (more than 40 miles from the nearest hospital), certain small-city hospitals and rural specialty hospitals. HHS utilized various funding formulas to provide over $1 billion in aggregate to nearly 500 of these hospitals, with payments ranging from $100,000 to $4.5 million depending on the rural criteria.
In recent weeks, HHS has continued to release a series of updates to its Provider Relief Fund FAQs document for the prior distributions. Most significantly, HHS announced that recipients of earlier Provider Relief Fund payments are not currently required to file reports to HHS, but more information will be provided in the future on forms and deadlines for such required reporting under the Provider Relief Fund Terms and Conditions. Such announcement would also impact recipients of the distributions described in this legal alert. McGuireWoods will continue to monitor developments regarding the Provider Relief Fund.
COVID-19: Healthcare Video AlertsIn a series of video alerts, McGuireWoods’ healthcare lawyers address issues providers face and overcoming COVID-19 challenges. |