HHS Provider Relief Funds, Round Two, $20 Billion in Funds – Most Providers Required to Submit Net Revenue and Loss Estimates

Last week, the U.S. Department of Health and Human Services (“HHS”) announced that all Medicare-participating providers with COVID-19 related losses are eligible for a second round of funding, totaling $20 billion, from the CARES Act-authorized Public Health and Social Services Emergency Fund (the “Funds”). Of a total of $100 billion of Funds authorized by Congress for payments to healthcare providers, $30 billion was released to all Medicare Part A and Part B billing providers automatically earlier this month, in amounts approximating 6.2% of each provider’s 2019 total Medicare revenue (See our previous article regarding this initial round here. In this new round of funding, however, only institutional Medicare providers for whom HHS has cost report data on file will receive their payments automatically. The vast majority of providers will only receive funding in this second round if they apply for the funding by logging into the a provider portal with their taxpayer identification information (TIN#), and then submit in the portal their 2017, 2018, or 2019 net revenue data, the associated tax forms containing this information, and estimates of the provider’s March and April 2020 COVID-19 related losses. HHS intends to use the information in order to ultimately set the allocation of the full $50 billion of payments from the first two rounds based on total provider net revenue, rather than the Medicare revenue figure initially utilized. THE FUNDS FROM THESE TWO ROUNDS ARE GRANTS THAT DO NOT REQUIRE PAYBACK, SO LONG AS THEY ARE UTILIZED FOR THEIR INTENDED PURPOSES. 

On Friday, April 24, 2020, HHS opened a portal for providers to apply for this second round of Funds as well as a detailed FAQ for providers.

Some key takeaways from these communications include:

  1. Providers who apply for the second round of Fund will need to first attest in the portal to their acceptance of the terms and conditions associated with the use of these Funds. These terms and conditions are substantial, and we expect significant government audit and enforcement activity to ensure that these Funds are being utilized for their intended purpose. We had previously discussed some of the key provisions within these terms and conditions here.
  2. Providers who did not receive Funds in the first round are not eligible for participation to receive Funds in the second round. However, HHS has indicated that there are still additional funds that may be distributed separately to non-Medicare participating providers.
  3. HHS has indicated that second round Funds will NOT be distributed on a first-come, first-serve basis, and that the second round Funds can be expected to be received within approximately 10 business days of submission of the required information.
  4. HHS provided a useful grid to assist providers with the required form tax form for submission and the information from that form that requires entry in the portal:

At this time, we recommend that providers whose COVID-19 losses exceeded their initial Funds payment who have the required information at hand submit such information into the Provider Portal as soon as possible. While HHS has indicated that Funds will not be distributed on a first-come, first-serve basis, the demand for these funds will be substantial and there will ultimately be a time shortly when new applications for Funds will no longer be accepted.