Medical providers across the spectrum have endured a significant hit to revenues as a result of the COVID-19 public health emergency (PHE). MGMA’s recent report, “COVID-19 Financial Impact on Medical Practices”, indicates that nearly 100% of providers have seen a negative revenue impact, with an average decrease in revenue of 55%. To offset some of those losses, the CARES Act allocated a $50 billion “general allocation”. The funds are even available to those providers that have shuttered as a result of the PHE, as long as the practices provided diagnoses, testing, or care for individuals with possible or actual cases of COVID-19. For the purpose of the PRF, CMS views EVERY patient treated after January 31, 2020 as a possible COVID-19 case.

Thirty billion dollars of this general allocation was distributed between April 10 and April 17, and the remaining funds will be distributed starting April 24 on a rolling basis. Unique among the various healthcare funding allocations in the CARES Act and other COVID-19 legislation, ALL providers that served Medicare patients in 2019 are eligible for Provider Relief Fund (PRF) dollars. And, because these payments are not loans, providers will not need to repay them, as long as they adhere to the terms and conditions of payment. More on that a bit later. (*This program should not be confused with the Medicare “Accelerated and Advance Payments Program”, which does have a repayment requirement.)

The allocations are based on 2018 net patient revenue assigned to the provider’s billing TIN (in some cases, this will be a practice, rather than an individual), but providers without adequate cost report data have the option to submit revenue information on the CARES Act Provider Relief Fund Payment Attestation Portal (“the Portal). For those providers, this second round of payments may be dependent on submitting such data. For providers with adequate cost report data, payments will be made automatically, but these providers must nevertheless upload cost report data, so that it can be verified against CMS’s records.

As a condition of receiving the PRF funding, providers are also required to sign an attestation confirming receipt of funds, and must accept the PRF “Terms and Conditions”. Even if the provider doesn’t actively accept the Terms and Conditions, keeping the funds for more than thirty days amounts to an acceptance. So, what does that mean? I’ve included some key provisions and plan language interpretations below. 

“Non-compliance with any Term or Condition is grounds for the Secretary to recoup some or all of the payment made from the Relief Fund.”

If you don’t follow the rules, you have to pay it back. 

“The Recipient certifies that the Payment will only be used to prevent, prepare for, and respond to coronavirus, and that the Payment shall reimburse the Recipient only for health care related expenses or lost revenues that are attributable to coronavirus.”

If you use the funds to, for instance, to pay your mortgage, instead of supporting the sustainability of your practice (e.g., paying utilities and lease costs, paying employee salaries), you have to pay it back. You may also be subject to additional penalties. 

“The Recipient acknowledges that any deliberate omission, misrepresentation, or falsification of any information contained in this Payment application or future reports may be punishable by criminal, civil, or administrative penalties, including but not limited to revocation of Medicare billing privileges, exclusion from federal health care programs, and/or the imposition of fines, civil damages, and/or imprisonment.”

If you lie on the payment application, the repayment is the least of your worries. 

“…for all care for a presumptive or actual case of COVID-19, Recipient certifies that it will not seek to collect from the patient out-of-pocket expenses in an amount greater than what the patient would have otherwise been required to pay if the care had been provided by an in-network Recipient.”

You may only collect out of pocket payments from patients less than or equal to the cost sharing amounts for a payor’s in-network providers.

*Providers should read the Terms and Conditions in their entirety; the above are merely excerpts.

Oversight and the Pandemic Response Accountability Committee

The PRF Terms and Conditions also require certain reporting to Secretary and the Pandemic Response Accountability Committee (PRAC). This is an important piece of the risk landscape that is new to all providers. The PRAC was created by the CARES Act. It is in charge of oversight of the funds being disbursed in response to the PHE and is a committee of a Council of Inspectors General from across the federal government, including the Department of Health and Human Services (HHS). It was allocated $80 billion to prevent and detect fraud, waste, abuse, and mismanagement of all funding disbursed by this and other COVID-19 response legislation. The committee will be working with the HHS Office of the Inspector General (HHS OIG) to conduct audits and reviews of programs, operations, and expenditures, including the PRF. The PRAC is empowered to investigate, subpoena, and recommend penalties in conjunction with the HHS OIG. 

This is a brand new authority, and we have yet to see how it is used, so providers should be careful to document exactly how they are using the funding, and be prepared to submit detailed documentation to HHS. 

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