Armanino Blog

FAQ: CARES Act Provider Relief Fund

May 07, 2020

What is the CARES Act Provider Relief Fund?

In the process of fighting the COVID-19 pandemic, health care providers have incurred unpredictable expenditures and experienced lost revenues from reprioritizing their routine services and treatments. In an effort to compensate health care providers (and various other industries) for expenses and lost revenues associated with the COVID-19 pandemic, the President signed into law the CARES Act on March 27.

The CARES Act designated $100 billion to the Provider Relief Fund to assist health care providers on the front lines of the COVID-19 fight, $50 billion of which is being distributed via the U.S. Department of Health & Human Services (“HHS”).

As of April 24, $30 billion was paid to health care providers across the nation in the form of a check or ACH payment from Optum Bank. If a provider received a relief payment in the initial round of disbursements, the provider should go to the Provider Relief Fund Application Portal to complete the attestation and submit the application for round two of the disbursements.

Which providers are eligible for the second round of disbursements from the Provider Relief Fund?

To be eligible for the second round of relief payments, the provider must have:

  • Received a disbursement from the Provider Relief Fund on or before April 24
  • Filed income tax returns for 2017, 2018 or 2019 (to the extent the provider is required to file in those years)

How can an eligible provider receive additional relief payments from the Provider Relief Fund?

If a provider received a payment on or before April 24, please go to the Provider Relief Fund Application Portal to complete the attestation (within 30 days of the first disbursement) and the application for round two of the disbursements. Providers will need to gather the following documentation for the application:

  • Gross receipts/sales or program service revenue as shown on most recent income tax return
  • Estimated revenue losses from March 2020 and April 2020 due to COVID-19
  • A copy of the most recent federal income tax return
  • A listing of the TINs in the provider’s organization that have received payments but do not file separate income tax returns.

A separate application should be completed for each Taxpayer Identification Number (“TIN”) that bills Medicare.

Which providers were eligible to receive Provider Relief Fund funds during the first round of disbursements?

All providers that received Medicare fee-for-service (“FFS”) reimbursements in 2019 should have received disbursements by April 24. Relief distributions were made based on the billing organization Taxpayer Identification Number (“TIN”). Specific guidance is provided for the following health care providers:

  • Large organizations and health systems should look to each of their TINs that bill Medicare.
  • Generally, employed physicians will not receive payments directly. The employer organization will receive the payment in the bank account corresponding to the Medicare billing TIN.
  • Generally, physicians in group practice will not receive payments directly. The group practice will receive the payment in the bank account corresponding to the Medicare billing TIN.
  • Sole practitioners will receive disbursements under the TIN used to bill Medicare.

All providers should look to the part of their organization that bills Medicare to assess the billing TIN and corresponding bank account.

How were the distributions calculated for the first round of disbursements?

Providers were paid their share of the initial $30 billion distribution in proportion to their share of Medicare FFS reimbursements in 2019 (total of $484 billion). Eligible providers can calculate their approximate distribution by dividing their 2019 Medicare FFS reimbursements by $484 billion and multiply that ratio by $30 billion.

How were the distributions made during the first round of disbursements?

Automated Clearing House (“ACH”) payments were made to accounts on file with UnitedHealth Group (“UHG”) or the Centers for Medicare & Medicaid Services (“CMS”). Automatic payments should have come to eligible providers via Optum Bank with “HHSPAYMENT” as the description.

Providers who typically receive reimbursement checks from CMS, will receive their relief payment in the form of a check.

Are there disallowed uses of the cash received?

The terms and conditions disallow the use of funds to:

  • Reimburse expenses or losses that have been reimbursed from other sources
  • Pay salaries of an individual at a rate in excess of Executive Level II
  • Advocate for or promote gun control
  • Lobby for or against legislation/political matters
  • Reimburse costs related to abortions, with some exceptions
  • Carry out embryo research
  • Promote the legalization of drugs or any other controlled substance
  • Establish a computer network that fails to establish security around pornography
  • Fund the Associate of Community Organizations for Reform Now (“ACORN”)
  • Purchase supplies for the hypodermic injection of any illegal drug

Are recipients required to document the use of funds on an ongoing basis?

Per the terms and conditions of the program, within 10 days after the end of each quarter, a recipient (receiving more than $150,000 of total funds under the program) must submit a report containing:

  • The total amount of funds received
  • The total amount of funds expended or obligated for each project or activity
  • A detailed list of all projects or activities for which substantial amounts were expended or obligated, including:
    • Name of project or activity
    • Description of project or activity
    • Estimated number of jobs created or sustained by the project or activity

The recipient should also maintain detailed financial records, store relevant invoices, and collect other cost documentation and be prepared to promptly submit the documentation to the government upon request.

See the program FAQs for more information.

For the latest regulatory changes and other information on keeping your organization running through disruption, visit our COVID 19 Resource Center.

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