On Friday, April 10, the U.S. Department of Health and Human Services (HHS) issued a press release announcing the immediate delivery of the first $30 billion tranche of the $100 billion Public Health and Social Services Emergency Fund (PHSSEF) that Congress had allocated to eligible healthcare providers in the CARES Act. The HHS pronouncement follows the remarks on April 7 at the White House Coronavirus Task Force press briefing by Seema Verma, the Administrator of the Centers for Medicare & Medicaid Services (CMS), in which Verma indicated that the $100 billion PHSSEF would be distributed in tranches beginning this week.

According to HHS, today the initial $30 billion will begin to be delivered to hospitals and providers across the United States that are enrolled in Medicare. HHS will allot a portion of the $30 billion based on the facilities’ and providers’ share of 2019 Medicare fee-for-service (FFS) reimbursements. Given that 2019 total Medicare FFS payments were approximately $484 billion, providers should expect to receive approximately 6.2% of their 2019 Medicare FFS billings (which they can obtain from their organization’s revenue management system) from this first $30 billion tranche.

HHS emphasizes that these are payments, not loans, and will not need to be repaid. However, there are several terms and conditions to accepting the funding that providers will want to understand before using the funds they receive today.

HHS provides the following additional details regarding the initial rapid $30 billion distribution:

  • All relief payments are being made to providers and according to their tax identification number (TIN). HHS provides the following examples:
    • Large Organizations and Health Systems: Large organizations will receive relief payments for each of their billing TINs that bill Medicare. Each organization should look to the part of their organization that bills Medicare to identify details on Medicare payments for 2019 or to identify the accounts where they should expect relief payments.
    • Employed Physicians: Employed physicians should not expect to receive an individual payment directly. The employer organization will receive the relief payment as the billing organization.
    • Physicians in a Group Practice: Individual physicians and providers in a group practice are unlikely to receive individual payments directly, as the group practice will receive the relief fund payment as the billing organization. Providers should look to the part of their organization that bills Medicare to identify details on Medicare payments for 2019 or to identify the accounts where they should expect relief payments.
    • Solo Practitioners: Solo practitioners who bill Medicare will receive a payment under the TIN used to bill Medicare.
  • HHS is partnering with UnitedHealth Group (UHG) to deliver the first $30 billion tranche. Providers will be paid via Automated Clearing House account information on file with UHG, UnitedHealthcare, or Optum Bank, or used for reimbursements from CMS. The automatic payments will come to providers via Optum Bank with “HHSPAYMENT” as the payment description. Providers who normally receive a paper check for reimbursement from CMS will receive a paper check in the mail for this payment within the next few weeks.
  • HHS requires providers to sign an attestation confirming receipt of the funds and agreeing to a number of Terms and Conditions of payment within 30 days of receiving the payment, including certification, documentation and detailed reporting requirements. For example, a provider will need to certify, among other things, that it currently provides diagnoses, testing or care for individuals with possible or actual cases of COVID-19 and is not terminated or excluded from participation in Medicare. However, HHS also states that a provider that ceased operation due to COVID-19 pandemic would still be eligible to receive funds so long as it diagnosed, tested, or cared for individuals with possible or actual COVID-19. HHS clarifies that “care does not have to be specific to treating COVID-19,” and that it “broadly views every patient as a possible case of COVID-19.” Moreover, for treatment of commercial patients, 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. HHS will open a portal for signing the attestation the week of April 13, 2020, and will be linked from gov/providerrelief. HHS states that any provider that receives payment and does not wish to comply with these terms and conditions must contact HHS within 30 days of receipt of payment and then remit the full payment to HHS as instructed.

For the remaining $70 billion, HHS will focus on providers in areas particularly impacted by the COVID-19 pandemic, 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. HHS indicates it is “working rapidly” on targeted distributions to these groups.

We are continuing to monitor for additional guidance from HHS regarding the current distribution, the terms and conditions and HHS’ plans for the second tranche of PHSSEF distributions.

If you have any questions about the PHSSEF and guidance in the context of the COVID-19 pandemic, please contact the authors of this alert.