PROVIDER ALERT: If You Have Received and Intend to Keep CARES Act Relief Fund Monies, Be Prepared to Open Your Books
If you are a Medicare billing provider, you may have received a portion of the $30 Billion CARES Act Provider Relief Fund monies, with little or no notice or detail. While these monies may have been automatically deposited into your bank account and are considered a grant rather than a loan or payment advance by the government, in order to accept these funds, you must attest to a series of terms and conditions within 30 days of their receipt. A list of those terms and conditions (“T&C”), can be found here. https://www.hhs.gov/sites/default/files/relief-fund-payment-terms-and-conditions-04132020.pdf. Taking no action to attest to these terms and conditions or to return the funds within 30 days will be deemed an acceptance of funds and their terms and conditions by the government.
Most importantly, be aware that the funds received, while calculated based on your Medicare 2019 billings, must be used solely to “prevent, prepare for, and respond to Coronavirus, [and] reimburse the Recipient only for health care related expenses or lost revenues that are attributable to Coronavirus.” In other words, the funds CANNOT be used for expenses such as previously planned capital improvements or hiring, and are NOT a supplement to 2019 income. A provider who left the practice of medicine or significantly downsized their practice before the COVID-19 crisis, or who has had no loss in revenue or additional expense due to the COVID-19 crisis, should not attest to the terms and conditions and should determine how to return the monies appropriately.
How will the government know how these funds were utilized? The terms and conditions to which you are attesting require you to keep accurate records of the use of these funds for auditing purposes – whether these funds are utilized for COVID-19 related spending or to replace revenue loss caused by the COVID-19 crisis. Additionally, if you received over $150,000 in funds through this grant or other CARES Act and other COVD-19-related programs administered by the Department of Health and Human Services, you are required to proactively send a report to the Department and the Pandemic Response Accountability Committee established to ensure the appropriate use of federal government fund associated with the COVID-19 crisis. This report needs to be submitted on a quarterly basis beginning in July 2020 and must contain information including the total amount of funds received from under the program, the amount of funds received that were expended or obligated by project or activity, and the estimated number of jobs created or retained by the project or activity, as applicable.
Providers who intend to retain CARES Act Relief Fund monies must think carefully about, among other things, how to carefully allocate funds to Coronavirus-related response activities for their practice and how to document and monitor the flow of these funds to ensure they are properly accounted for. This may be particularly challenging for larger practices with multiple providers or care centers billed under a single TIN. The result of non-compliance with these reporting requirements could be civil or criminal prosecution for fraud against the federal government.
How Frier Levitt Can Help
Retaining counsel familiar with both healthcare law and the new Coronavirus-relief-related legislation to preemptively address these issues is thus strongly recommended. Contact Us today if we can be of assistance.