Bass, Berry & Sims attorneys John Kelly and Julia Tamulis warned healthcare providers about the possibility of future scrutiny by government authorities following the passing of the $175 billion relief aid offered under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).

“Any time this amount of money goes out the door, the government is going to want to understand how it’s being spent,” John said. “And it’s going to put a tremendous amount of responsibility on the entities that are accepting and using it. They’re going to have to justify it.”

Healthcare providers that accept relief aid under the CARES Act will need to be cautious on how they spend the money. “The inclusion of lost revenue in the CARES Act suggests Congress intended to extend relief to providers beyond those directly involved in the front lines of the COVID-19 crisis, to those that are reeling from the forced cancellation of elective procedures …The statute doesn’t make clear how to calculate lost revenue, but HHS guidance includes suggestions as to how it might be done,” Julia said.

John recommends “A robust compliance program is an essential part of preparing for the time of auditing. That means a program that assesses the allowable uses of relief funds for the business, communicates that assessment throughout the organization, tracks how the funds are used, and documents everything.”

The full article, “Hospitals Wrestle With Scope of Relief Aid as Audits Loom,” was published on May 26 by Bloomberg Law and is available online.