The U.S. Department of Health and Human Services (HHS) announced last week that, on Thursday, October 5, it would begin to accept applications for an additional $20 billion in funding to reimburse providers for healthcare-related expenses and lost revenue attributable to COVID-19 under its Public Health and Social Services Emergency Fund (Provider Relief Fund). Providers may apply here until November 6, 2020. Importantly, the funding is being made available to certain behavioral health providers that were excluded from prior distributions under the Provider Relief Find. We review eligibility for the funding and how distributions will be calculated below.
As discussed in our prior Alert, pursuant to the Coronavirus Aid, Relief, and Economic Security (CARES) Act and the Paycheck Protection Program and Health Care Enhancement Act (PPP Enhancement Act), HHS was granted $175 billion for its Provider Relief Fund to support providers responding to the COVID-19 pandemic. In its Phase 1 General Distribution, HHS distributed $50 billion to providers that bill Medicare fee-for-service. In its Phase 2 General Distribution, HHS made an additional $18 billion available for providers that receive Medicare and/or Medicaid reimbursement, dental service providers, and state-licensed assisted living facilities.
Providers eligible for Phase 3 must meet one of the following criteria:
- Billed Medicaid / CHIP programs or Medicaid managed care plans for health-related services between Jan. 1, 2018-Mar. 31, 2020;
- Billed a health insurance company for oral healthcare-related services as a dental service provider as of Mar. 31, 2020;
- Be a licensed dental service provider as of Mar. 31, 2020 that does not accept insurance and has billed patients for oral healthcare-related services;
- Billed Medicare fee-for-service during the period of Jan. 1, 2019-Mar. 31, 2020;
- Be a Medicare Part A provider that experienced a CMS-approved change in ownership prior to Aug. 10, 2020;
- Be a state-licensed / certified assisted living facility as of Mar. 31, 2020; or
- Be a behavioral health provider as of Mar. 31, 2020 that has billed a health insurance company or that does not accept insurance and has billed patients for healthcare-related services as of Mar. 31, 2020.
Additionally, if a provider meets the above criteria, they must meet all of the below criteria to be eligible for funding:
- Filed a federal income tax return for fiscal years 2017, 2018, 2019 if in operation before Jan. 1, 2020, or be exempt from filing a return; and
- Provided patient care after Jan. 31, 2020 (Note: patient care includes health care, services, and support, as provided in a medical setting, at home, or in the community); and
- Did not permanently cease providing patient care directly or indirectly; and
- For individuals providing care before Jan. 1, 2020, have gross receipts or sales from patient care reported on Form 1040 (or other tax form).
Providers eligible to receive a portion of the Phase 3 General Distribution will receive a payment that, when combined with prior payments (if any), equals 2% of patient care revenue. HHS will calculate payments based on (i) a provider’s change in operating revenues from patient care, (ii) a provider’s change in operating expenses from patient care, including expenses incurred related to COVID-19, and (iii) payments already received through prior Provider Relief Fund distributions.
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Roger A. CohenPartner