Beginning April 10, the U.S. Department of Health and Human Services (“HHS”), assisted by UnitedHealth Group, began distributing the $30 billion to health care providers and health care systems. These payments are not loans and will not need to be repaid. This differs from the CMS Accelerated and Advance Payment Program, where the payments are loans to providers and must be repaid.

We previously wrote about the $100 billion in relief funds to hospitals and health care providers included in the CARES Act passed on March 27. (See “Senate Approves $100 Billion to Hospitals in COVID-19 Relief Package” and “CARES Act Provides Financial Relief for Health Care Providers.”) On April 10, the HHS released guidance pertaining to an immediate infusion of $30 billion into the health care system. The intent of these quick disbursements is to provide relief both to providers in areas heavily impacted by the COVID-19 pandemic and to providers who are struggling to keep their doors open because healthy patients are delaying care and canceling elective services.

Who is eligible for this initial rapid distribution?

• All facilities and providers that received Medicare fee-for-service (FFS) reimbursements in 2019.

How are the payments being distributed?

• All relief payments are made to the billing organization according to its Taxpayer Identification Number (TIN). Thus, employed physicians and physicians who are part of a group will not receive the payment directly; the payment will be received like a routine payment for medical services.

• Payments to practices that are part of larger medical groups will be sent to the group’s central billing office.

• The direct deposit will come via Optum Bank with “HHSPAYMENT” as the payment description.

• Providers that normally receive a paper check for reimbursement from CMS will receive a paper check in the mail.

How much can you expect to receive?

• Health care providers can anticipate receiving an amount that is proportional to their billing of the total FFS payments in 2019, which was approximately $484 billion.

• HHS provides the following formula: A provider can estimate their payment by dividing the 2019 Medicare FFS payments they received (not including Medicare Advantage) by $484,000,000,000, and multiply that ratio by $30,000,000,000. Providers can obtain their 2019 Medicare FFS billings from their organization’s revenue management system.

What’s the catch?

• For out-of-network patients, providers cannot collect out-of-pocket payments from a COVID-19 patient that are greater than what the patient would have been required to pay if the care had been provided by an in-network provider.

• Within 30 days of receiving the payment, providers must sign an attestation confirming receipt of the funds and agreeing to TEN PAGES of Terms and Conditions.

  • Not returning the money within 30 days will be considered an acceptance of the Terms and Conditions, even if an attestation was not provided.

What do you need to do?

• If you want to keep the money, you must understand the Terms and Conditions and use the funds only as allowed.

  • The Terms and Conditions impose very strict recordkeeping requirements and depending on the amount received, there might be an affirmative duty to submit reports quarterly.

• Among various restrictions, the money can be used only to “prevent, prepare for, and respond” to COVID-19.

  • Additionally, the money cannot be used to cover expenses that have already been reimbursed through other sources or that other sources are obligated to reimburse.

• If the amount is under the threshold, you are still required to keep scrupulous records to be produced in case they are requested.