On April 22, 2020, the U.S. Department of Health and Human Services (“HHS”) issued guidelines on how the $100 billion that Congress included in the CARES Act for hospitals and other health care providers (“Provider Relief Funds”) would be allocated and the timetable for health care providers to apply for such funds. The Provider Relief Fund will be used to support healthcare-related expenses or lost revenues attributable to COVID-19 and to ensure that uninsured Americans can get testing and treatment for COVID-19.

$50 Billion for General Allocation

$50 billion of the CARES Act Provider Relief Fund is allocated for general distribution to Medicare facilities and providers impacted by COVID-19 based on the provider’s 2018 net patient revenue. An initial $30 billion was distributed between April 10 and April 17 and the remaining $20 billion will be distributed beginning Friday, April 24. The initial $30 billion distribution was distributed based on the provider’s share of Medicare fee-for-service reimbursements in 2019 as a quick way to get these funds to providers. The remaining $20 billion distribution will be allocated to specific providers in a manner that will cause the full $50 billion general distribution to be allocated proportionally to providers’ share of 2018 net patient revenue.

On April 24, a portion of providers will automatically be sent an advance payment based on revenue data they submitted in CMS cost reports. Providers without adequate cost report data on file will need to submit their revenue information to an HHS portal opening this week. Providers who receive funds from the $50 billion general distribution have to sign an attestation confirming receipt and agree to the terms and conditions of payment. Such terms and conditions include submitting documentation that the funds were used for the purposes designated in the CARES Act (healthcare-related expenses or lost revenues attributable to COVID-19). There will be significant OIG scrutiny and auditing of such payments to ensure that they were properly used.

$10 Billion for Hospitals

$10 billion of the Provider Relief Funds will be allocated for targeted distribution to hospitals in areas that have been particularly impacted by the COVID-19 outbreak. The HHS identified as an example, hospitals in New York (which have a high percentage of the nation’s total confirmed COVID-19 cases), which are expected to receive a large share of the $10 billion. To apply for a portion of these funds, hospitals need to provide certain limited information via an HHS authentication portal before midnight pacific time today, Thursday, April 23. The HHS has stated that the distribution of these funds will take into consideration those hospitals serving a significant number of low-income patients as reflected by their Medicare disproportionate share hospital (DSH) adjustment.

$10 Billion for Rural Providers

$10 billion of the Provider Relief Funds will be allocated for rural health clinics and hospitals. These funds will be distributed as early as next week (April 27) on the basis of the providers’ operating expenses.

$30 Billion for Treatment of Uninsured

Much of the remaining $30 billion of Provider Relief Funds will be used to reimburse hospitals and other health care providers, at Medicare rates, for COVID-related treatment of uninsured patients. Any health care provider who provided treatment for uninsured COVID-19 patients on or after February 4, 2020, can request claims reimbursement through the program and will be reimbursed at Medicare rates, subject to available funding. Providers can register for the program here on April 27, 2020, and begin submitting claims in early May 2020.