Hospitals and health care providers in America who have been impacted by the new coronavirus outbreak may notice a direct deposit from the Department of Health & Human Services (HHS) in their bank accounts.  The payments are a component of the CAREs Act legislation enacted on March 27, 2020.  The Act provides $100 billion in relief funds to hospitals and other healthcare providers on the front lines of the coronavirus response.

The payments that began Friday April 10th are a part of the initial disbursement of $30 billion intended to deliver funds quickly and transparently.  $26 billion was already disbursed to providers by direct deposit.  Providers who receive a paper check can expect to receive payment over the next several weeks.

The funds from this initial $30 billion do not need to be paid back. The money was deposited via Optum Bank and is labeled “stimulus payment” or ”HHSPAYMENT.”  Note that the funds will go to each physician organization’s TIN that normally receives Medicare payments, not to each individual physician.

The funds may be used either for health care related expenses or for lost revenues that are attributable to coronavirus.

There is a separate program called the CMS Accelerated and Advance Payment Program, which was expanded by the CAREs Act.  Those payments must be requested by a provider and do need to be repaid.  We will provide additional information on that expansion later this week.

Who is eligible for initial $30 billion?

All facilities and providers that received Medicare fee-for-service (FFS) reimbursements in 2019 are eligible for this initial rapid distribution.

This quick dispersal of funds is intended to provide relief to providers in areas heavily impacted by the COVID-19 pandemic and those providers who are struggling to keep their doors open due to healthy patients delaying care and cancelled elective services.

If you ceased operation as a result of the COVID-19 pandemic, you are still eligible to receive funds so long as you provided diagnoses, testing, or care for individuals with possible or actual cases of COVID-19. Care does not have to be specific to treating COVID-19. HHS broadly views every patient as a possible case of COVID-19.

Important information regarding payments:

Payments to practices that are part of larger medical groups will be sent to the group’s central billing office.

All relief payments are made to the billing organization according to its Taxpayer Identification Number (TIN).

As a condition to receiving these funds, providers must agree not to seek collection of 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.

A portion of the $100 billion Provider Relief Fund will be used to reimburse healthcare providers, at Medicare rates, for COVID-related treatment of the uninsured.  As a condition, providers are obligated to abstain from “balance billing” any patient for COVID-related treatment.  (The Families First Coronavirus Response Act also requires private insurers to cover an insurance plan member’s cost-sharing payments for COVID-19 testing).

How are payment distributions determined?

Providers will be distributed a portion of the initial $30 billion based on their share of total Medicare FFS reimbursements in 2019.

Total FFS payments were approximately $484 billion in 2019.  A provider can estimate their payment by dividing their 2019 Medicare FFS (not including Medicare Advantage) payments they received by $484,000,000,000, and multiply that ratio by $30,000,000,000. Providers can obtain their 2019 Medicare FFS billings from their organization’s revenue management system.

As an example (per HHS):

A community hospital billed Medicare FFS $121 million in 2019. To determine how much they would receive, use this equation:

$121,000,000/$484,000,000,000 x $30,000,000,000 = $7,500,000

What to do if you are an eligible provider?

HHS has partnered with UnitedHealth Group (UHG) to provide rapid payment to providers eligible for the distribution of the initial $30 billion in funds.  Providers will be paid via Automated Clearing House account information on file with UHG or the Centers for Medicare & Medicaid Services (CMS).

The automatic payments will come to providers via Optum Bank with “HHSPAYMENT” or “US HHS Stimulus HHSPAYMENT” as the payment description.

Within 30 days of receiving the payment, providers must sign an attestation confirming receipt of the funds and agreeing to the terms and conditions of payment. The portal for signing the attestation is due to open this week per HHS guidance.

HHS’ payment of this initial tranche of funds is conditioned on the healthcare provider’s acceptance of the Terms and Conditions – PDF, as referenced in prior paragraph.  Not returning the payment within 30 days of receipt will be viewed as acceptance of the Terms and Conditions. If a provider receives payment and does not wish to comply with these Terms and Conditions, the provider must do the following: contact HHS within 30 days of receipt of payment and then remit the full payment to HHS as instructed.  Contact information will be provided soon by HHS.

Priorities for the remaining $70 billion

The Administration indicates it will focus on providers in areas particularly impacted by the COVID-19 outbreak, rural providers, providers of services with lower shares of Medicare reimbursement or who predominantly serve the Medicaid population, and providers requesting reimbursement for the treatment of uninsured Americans.

We are happy to discuss any questions or comments you may have.  Our team is working and available to review with you.  Please contact our office at 610-544-5900 or .

We are in this together,

Brinker Simpson & Company, LLC

Disclaimer: This alert is for informational purposes only and does not constitute professional advice. Information contained in this communication is not intended or written to be used as tax advice & cannot be used by the recipient to avoid penalties that may be imposed under the Internal Revenue Code. We strongly advise you to seek professional assistance with respect to your specific issue(s).