Publications

04.10.2020

Medicare providers can expect automatic deposits, beginning today.

The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) included a $100B appropriation to the Public Health and Social Services Emergency Fund, which is overseen and administered by the U.S. Department of Health and Human Services (HHS). The stated purpose of the appropriation is to “prevent, prepare for, and respond to coronavirus, domestically and internationally, for necessary expenses to reimburse, through grants or other mechanisms, eligible health care providers for health care related expenses or lost revenues that are attributable to coronavirus.

On April 10, 2020, HHS announced that it will begin immediately delivering an initial $30B from the Fund as rapid relief distributions to health care providers that are currently enrolled in Medicare. These distributions are considered payments, not loans, and do not need to be repaid (subject to certain terms and conditions). Presumably, the payments will be taxable as income, but specific guidance on that issue is not yet available.

If a health care provider, such as a hospital or physician group practice, is enrolled in Medicare and received Medicare fee-for-service (FFS) reimbursements in 2019, then the provider can expect to automatically receive a payment via direct deposit to the provider’s bank account on file with Medicare. Payments made via direct deposit will show up as “HHSPAYMENT.” If the provider normally receives paper checks for its Medicare reimbursements, then the provider will be issued a paper check for the relief payment, and can expect to receive the check in the next few weeks.

The amount of a provider’s automatic payment will be calculated based on the ratio of the provider’s 2019 Medicare FFS reimbursements to $484B (i.e., the total amount of Medicare FFS payments made in 2019) multiplied by $30B. For example, if a provider received $2.5M in Medicare FFS payments in 2019, then it can expect to receive a deposit in the amount of $154,958.68 (i.e., $30B x $2.5M / $484B). However, despite what providers may have heard, these payments actually do come with some strings attached.

Within thirty (30) days following receipt of payment, the provider must sign an attestation confirming receipt of the funds and agreeing to the terms and conditions established by HHS. (Note: These attestations can be made via web-based portal on the hhs.gov website, beginning the week of April 13, 2020.) Among other things, the provider must certify that:

• the provider currently provides diagnoses, testing, or care for individuals with possible or actual cases of COVID-19;
• the provider will not seek to collect any out-of-pocket payments from a COVID-19 patient that are greater than what the patient would have otherwise been required to pay if the care had been provided by an in-network provider (i.e., must treat all COVID-19 patients as in-network);
• the payment will only be used to prevent, prepare for, and respond to coronavirus, and shall reimburse the provider only for health care related expenses or lost revenues that are attributable to coronavirus;
• the payment will not be used to reimburse expenses or losses that have been reimbursed from other sources or that other sources are obligated to reimburse; and
• the provider will submit reports to the HHS Secretary, as may be requested by the Secretary, to ensure compliance with conditions imposed on the payment.

The complete list of terms and conditions can be found here: https://www.hhs.gov/sites/default/files/relief-fund-payment-terms-and-conditions-04092020.pdf. If the provider is unable or unwilling to accept those terms and conditions, then it must contact HHS within thirty (30) days of receiving the payment and repay the full amount to HHS, when and as instructed by HHS.

The bottom line is that Medicare-enrolled providers should be getting a payment from HHS today or in the near future. Once the payment is received, the provider will need to decide whether it can truthfully attest to compliance with the aforementioned terms and conditions. If it cannot, then the provider will need to remit payment back to HHS, when and as directed by HHS.

^{* The information contained in this document is provided for informational purposes only. It should not be construed as business, legal, accounting, tax, financial, investment or other advice on any matter and should not be relied upon for such.}

^{The information in this document may not reflect the most current developments as the subject matter is extremely fluid and may change daily. The content and interpretation of the issues addressed herein is subject to revision. Koley Jessen, P.C., L.L.O. disclaims any and all liability with respect to actions taken or not taken based on any or all of the contents of this document to the fullest extent permitted by law. Do not act or refrain from acting upon the information contained in this document without seeking professional or other advice.}