Additional FAQ Released Regarding Recent Practice Acquisitions
As you are likely aware, the U.S. Department of Health and Human Services (“DHHS”) has allocated a total of $50 billion in Provider Relief Funds for general distribution to Medicare Part A and Part B-billing healthcare providers. These Provider Relief Funds were authorized under the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) and are intended to assist healthcare providers in covering additional expenses and revenue shortfalls that healthcare providers are experiencing as a result of the COVID-19 crisis. After an initial $30 billion in funds was automatically granted to those providers that billed Medicare Part A or Part B for services in 2019, an additional $20 billion of funding was made available to these same providers. In order to receive a second round of funding, providers are required to apply via an online DHHS portal, and to submit information regarding provider revenue and COVID-19 related expenses or revenue losses, which we highlighted in this attached article. When the second round application process began in late April, there was no submission deadline announced, but DHHS has now announced that any second round applications must be submitted by June 3rd in order to be eligible for payment. We previously provided important information regarding the terms and conditions and compliance aspects associated with these funds in this attached article.
On May 20, DHHS also provided additional information for providers who received Provider Relief Funds but had either been acquired by, or have acquired, another provider since their last tax filing. This DHHS FAQ clarified that a provider TIN# that was acquired by another is not entitled to the Provider Relief Funds received, because that specific TIN# has not provided services related to the COVID-19 crisis, as is required under the CARES Act. Additionally, the acquiring practice TIN# is not allowed to accept the Provider Relief Funds and transfer them to the TIN# of the practice. These Provider Relief Funds must be returned to DHHS, per the instructions provided in the full FAQ, which can be found here.
While an acquired practice is not entitled to the Provider Relief Funds, another FAQ has clarified that the acquiring practice may be entitled to the Provider Relief Funds of the acquired practice. This was a significant change from previous HHS guidance which indicated that HHS would rely only on the organization’s last tax filing to calculate the total amount of Provider Relief Payment available for that entity. The new guidance clarifies that if the acquired practice’s total revenue, when added to the acquiring practice’s total revenue, would increase that figure by over 20%, then the acquiring practice is allowed to include the acquired practice within its stated revenue figure for purposes of providing DHHS with information to determine its total Provider Relief Payment. To illustrate:
A Provider Relief Fund recipient received $10 million in total patient revenue in 2018 (its last tax filing year). During sometime 2019, that recipient recently acquired a practice with $3 million in total patient revenue in 2018 (its last tax filing year). The acquired practice should return its Provider Relief Funds to DHHS because it is not an active billing entity during the COVID-19 crisis. However, the acquiring practice is able to report a total of $13 million in total patient revenue for purposing of having its total Provider Relief Fund payment calculated. Because DHHS is aiming to provide all eligible providers with total Provider Relief Payments equal to 2% of its 2019 total revenue, reporting the information from the acquired practice could lead to an increase in Provider Relief Funds of $60,000 for the practice.
How Frier Levitt Can Help
The attorneys of Frier Levitt have been carefully monitoring developments related to the Provider Relief Fund and are available to assist in determining your eligibility for Provider Relief Fund payments and providing guidance regarding the second-round application process, including for providers who have recently acquired practices and may be eligible to benefit from this recent DHHS guidance. Contact us today for additional guidance.