On May 6, 2020, the U.S. Department of Health and Human Services (HHS) issued additional guidance, by way of updated FAQs, for providers receiving relief from the $50 billion general allocation of the Public Health and Social Services Emergency Fund (known as the Provider Relief Fund) that was appropriated in the Coronavirus Aid, Relief, and Economic Security (CARES) Act. And on May 7, HHS announced a 15-day extension for Provider Relief Fund recipients to attest to payments received and accept the Terms and Conditions governing the use of those funds. This extension comes just days prior to the initial deadline that many providers were facing for submitting attestations.

Updated General Distribution FAQs

The May 6 updated FAQs, while still leaving open a number of key questions, do shed additional light on certain issues relating to the Provider Relief Fund.

  • Recoupment of overpayments. The updated FAQs provide that HHS generally “does not intend to recoup funds as long as a provider’s lost revenue and increased expenses exceed the amount of Provider Relief funding a provider has received.” HHS reminds providers that it reserves the right to audit recipients of Provider Relief Funds “to ensure that this requirement is met and collect any Relief Fund amounts that were made in error or exceed lost revenue or increased expenses due to COVID-19.” Failure to comply with the Terms and Conditions is also noted in the updated FAQs as a potential basis for recoupment.
  • Payments greater than expected or payments sent in error. If a provider believes it was overpaid or received a payment in error, HHS is instructing the provider to reject the entire payment and submit the appropriate documentation through the General Distribution Portal to facilitate HHS’s determination of the correct payment. To reject a payment, HHS has instructed providers to contact their financial institution and ask the institution to refuse the Automated Clearinghouse (ACH) credit that was received by initiating an ACH return using the ACH return code of “R23 – Credit Entry Refused by Receiver.”
  • Payments less than expected. If a provider believes that the general distribution funds received are less than expected, HHS has instructed providers to “accept the payment and submit their revenues in the [General Distribution Portal] to determine their correct payment.”
  • Reporting requirements. Providers receiving more than $150,000 from the Provider Relief Fund or any related legislation “primarily making appropriations for the coronavirus response and related activities” must submit quarterly reports to the government on how the Provider Relief Funds are being used. The updated FAQs confirm that the first quarterly reporting period will be for the “calendar quarter ending June 30” and the Terms and Conditions associated with the Provider Relief Funds indicate that reports will be due “[n]ot later than 10 days after the end of each calendar quarter.” Absent additional guidance, this appears to indicate that the first reports are due by July 10. The FAQs note that HHS may request “additional reports prior to that date” and also that HHS will be providing additional guidance on the type of documentation that should be submitted. That additional guidance will reportedly be posted to the CARES Act Provider Relief Fund webpage.
  • Balance billing. While the Terms and Conditions associated with the Provider Relief Fund payments prohibit balance billing and billing patients above in-network rates, the precise contours of those limitations have been unclear. The Terms and Conditions describe the limitations as applying to “all care for a presumptive or actual case of COVID-19.” The updated FAQs clarify that a “presumptive case” of COVID-19 is “a case where a patient’s medical record documentation supports a diagnosis of COVID-19, even if the patient does not have a positive in vitro diagnostic test result in his or her medical record.” The updated FAQs also address the issue of determining the appropriate in-network rates, and HHS has noted that most health insurers have publicly stated their commitment to reimbursing out-of-network providers treating health plan members for COVID-19-related care at the insurer’s prevailing in-network rate. However, if the health insurer is not willing to do so, the FAQs state that the provider “may seek to collect from the patient out-of-pocket expenses, including deductibles, copayments, or balance billing, in an amount that is no greater than what the patient would have otherwise been required to pay if the care had been provided by an in-network provider.” In that situation, it appears that providers are ultimately responsible for ensuring that payments for out-of-network services are consistent with the in-market rates for those same services.

Extension of Attestation Deadline

HHS requires recipients of Provider Relief Funds to accept or reject each Provider Relief Fund payment by completing an attestation through the Attestation Portal and agreeing to the Terms and Conditions, requirements that we have covered in a prior Client Alert. While HHS initially required that Provider Relief Fund recipients complete an attestation and accept the Terms and Conditions within 30 days of receiving a payment, HHS announced on May 7 that providers will now have 45 days from the date they receive a payment to attest and accept the Terms and Conditions or return the funds (note that, according to HHS, recipients should include the date of receipt in their calculations). Providers that have not returned the payment within 45 days of receipt will be deemed to have accepted the Terms and Conditions. For providers that received the first general distribution payment on April 10, HHS’s attestation deadline has been extended from May 9 to May 24 (we note that May 24 is a Sunday and May 25 is Memorial Day).

HHS continues to issue new instructions and guidance related to Provider Relief Fund payments on a rolling basis, including with respect to the attestation process, and Reed Smith continues to track these developments closely. Recipients of Provider Relief Funds are encouraged to monitor HHS’s announcements and guidance as often and as carefully as possible. Please contact us, or the Reed Smith lawyer with whom you frequently work, to ensure compliance with applicable laws in applying for and utilizing CARES Act funds.