COVID-19 Legal Update: HHS Relief Funds

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Morgan P. Abbott and Jennifer Csik Hutchens
Robinson Bradshaw Publication
April 14, 2020

On April 10, Medicare providers and suppliers began receiving direct deposits from the Department of Health and Human Services as part of the $30 billion CARES Act relief funding in response to COVID-19. Payments were automatically apportioned from among providers based on percentage share of total Medicare FFS payments received in 2019. Payments are separated by each provider's tax identification number, so large health care providers will receive individual payments for each billing TIN.   

Generally, funds must be used to prevent, prepare for or respond to COVID-19, including compensating for expenses or lost revenues attributable to COVID-19. To use the funds, providers must accept the Terms and Conditions of the funds within 30 days of receipt. These Terms require, among other things, that providers refrain from balance billing for COVID-19 care, bill out-of-network patients for COVID-19 care as if they were in-network, and follow strict record-keeping requirements regarding the expenditure of funds. 

We anticipate that HHS will release formal guidance regarding permitted uses for the funds in the coming days. In light of ambiguities around permitted uses of the funds and the fact that formal guidance has not yet been issued, we recommend that recipients wait to sign the Terms and Conditions and earmark the relief funds until later in the 30-day period and after formal guidance has been issued. Receipt of HHS relief funds does not foreclose eligibility for SBA loans or other CARES Act programs. However, HHS relief funds may not be used to reimburse expenses or losses that are reimbursed from other sources. As a result, the guidance may impact how recipients strategically spend HHS relief funds in light of any other CARES Act funding received to ensure they take full advantage of all federal response programs.

Until HHS releases formal guidance, we recommend recipients familiarize themselves with the Terms and Conditions and begin preparing their accounting department for the robust record-keeping requirements accompanied by use of the relief funds. We will keep you apprised of further developments following the release of formal guidance. 

For assistance understanding the HHS relief funds or other CARES Act relief programs, updating policies or procedures, or navigating the process for requesting or administering emergency funds, please contact a member of Robinson Bradshaw's Coronavirus Resource Team or Health Care Practice Group.

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