This article is up-to-date as of July 23, 2020. We’ll continue to revise it as new information becomes available.
There are a number of financial relief efforts for the health care sector due to COVID-19 disruption. Details about grants and funding opportunities as well as important considerations for health care entities are below.
Congress approved funding packages that have been and will continue to be awarded to federal agencies, including the Federal Emergency Management Agency (FEMA), the Centers for Disease Control and Prevention (CDC), and the US Department of Health & Human Services (HHS).
Large sums have been designated for health care industry purposes. The federal agencies will award the funds directly to health care providers as well as to states or state agencies, which will then pass the funds to hospitals and provider recipients.
Following are the distribution amounts to date.
- UPDATED—$175 billion Provider Relief Fund for hospitals and providers through the Coronavirus Aid, Relief, and Economic Security (CARES) Act (HR 748), which includes an additional $75 billion interim fund signed on April 24, 2020 (Paycheck Protection Program and Health Care Enhancement Act). Recipients must attest to each payment received within 90 days, which was extended from the original 30 days, and agree to the Terms and Conditions, otherwise remit the payment back to HHS. HHS has explicitly stated that the funds are taxable income.
Provider Relief Fund reporting requirement: On July 20, 2020, HHS released a short guidance document stating that recipients of awards exceeding $10,000 in aggregate will be required to report all expenses incurred through December 31, 2020. The portal will open on October 1, 2020, and reporting will be due on February 15, 2021. If funds haven’t been fully expended by December 31, 2020, recipients can file a final report due July 31, 2021. HHS will release the detailed reporting specifications by August 17, 2020.
- $30 billion first tranche. On April 10, 2020, and April 17, 2020, HHS distributed $30 billion directly to hospitals and eligible providers, based on Medicare fee-for-service (FFS) historic billing.
- $20 billion second tranche: Beginning on April 24, 2020, $20 billion was distributed to hospitals and providers, based on 2018 net patient revenue from all payer sources and estimated losses for March and April 2020, which were to be reported via the General Distribution portal by June 3, 2020 (FAQs are updated frequently). Entities that submit CMS cost report data automatically received a payment; however, they must confirm the data via the portal. Similar to the first tranche, recipients must attest, prior to reporting the data above, and agree to the Terms and Conditions. Adjustment payments will be distributed on a weekly basis; the first batch was distributed May 15, 2020.
- $12 billion High Impact Allocation for hospitals located in so-called COVID-19 hot spots. Funds were distributed to 395 hospitals that provided inpatient care for 100 or more COVID-19 patients through April 10, 2020, mostly located in New York.
- UPDATED—$10 billion for second round of High-Impact payments. On June 8, 2020, HHS sent a request to hospitals to update information on their COVID-19 inpatient admissions for the January 1, 2020–June 10, 2020 period to determine a second round of funding. Payments of $50,000 per eligible admission will be distributed to hospitals with 161 or more admissions, beginning the week of July 20, 2020. The TeleTracking portal is open for reporting ongoing updates.
- UPDATED—$10 billion for rural providers. Funds were distributed to critical access hospitals (CAHs), rural health clinics (RHCs), and rural federally qualified health centers (FQHCs) on May 6, 2020, with a base payment of $1 million per CAH and $100,000 per clinic. Funds were adjusted based on operating expenses.
A subset of RHCs did not receive payments on the first distribution, in error. To correct this, on June 25, 2020, HHS distributed a payment of approximately $103,000 to each of these RHCs.
On July 10, 2020, HHS announced that it will expand its payment formula to include certain special rural Medicare-designation hospitals in urban areas as well as others that provide care in smaller, nonrural communities. These could include some suburban hospitals that aren’t considered rural but serve rural populations and operate with smaller profit margins and limited resources than larger hospitals. HHS estimates the funding will provide relief of over $1 billion to 500 recipients with payments ranging from $100,000 to $4.5 million for rural-designated providers and $100,000 to $2 million for suburban providers.
- $4.9 billion for skilled nursing facilities (SNFs). On May 22, 2020, SNFs received a base payment of $50,000, plus $2,500 per bed.
- $500 million for Indian Health Service (IHS) providers. This was distributed based on operating expenses.
- An unspecified amount of funds is available for testing and treatment for uninsured COVID-19 patients on or after February 4, 2020, which can be reimbursed at Medicare rates, subject to availability. Registration opened April 27, 2020, and claims could be submitted beginning May 6, 2020.
- UPDATED—$15 billion to providers that participate in state Medicaid and Children's Health Insurance Programs (CHIP)and dentists who haven’t previously received a payment from the Provider Relief Fund. HHS estimates nearly 1 million health care providers may be eligible for this funding, including but not limited to pediatricians, obstetrician-gynecologists, opioid treatment and behavioral health providers, assisted-living facilities, and other home and community-based services providers. Payments will be at least 2% of annual patient revenue, which providers must report through an enhanced portal by August 3, 2020.
On July 10, 2020, HHS announced that this portal is now open to dentists who may not have previously been eligible to receive funding through the Provider Relief Fund. Eligible dentists will receive a reimbursement of 2% of their annual reported patient revenue and will have until August 3, 2020, to apply.
- UPDATED—$10 billion to safety-net hospitals that serve a disproportionate number of Medicaid patients or provide large amounts of uncompensated care. To qualify, hospitals must have average uncompensated care per bed of at least $25,000; profitability of 3% or less, as reported in the most recent CMS cost report; and a Medicare Disproportionate Payment Percentage of 20.2% or greater. The payments were distributed on June 12, 2020, and each hospital received $5 million–$50 million.
On July 10, 2020, HHS announced that it would expand its criterion. Now, certain acute care hospitals will be eligible for payment if they meet the revised profitability threshold of less than 3% averaged consecutively over two or more of the past five cost reporting periods. HHS expects to distribute over $3 billion across 215 acute care facilities, bringing the total payments for safety net hospitals to $12.8 billion across 959 facilities.
- Nearly $2 billion distributed by Health Resources and Services Administration (HRSA) to 1,400 community health centers. The total awards were in three payments totaling $100 million, $1.3 billion, and $583 million, with the latter award being specifically for COVID-19 testing.
- $225 million distributed by HRSA for RHC testing. On May 20, 2020, $49,461 per RHC was distributed for COVID-19 testing and related expenses.
- $955 million distributed to states and tribes to support seniors (see allocation by state and program) by the Administration for Community Living (ACL) for home and community-based services, nutrition, caregiver support services, and the long-term care ombudsman program.
- State hospital association grants. Amounts and funding purpose vary by association.
- NEW—SNF distribution of COVID-19 diagnostic testing equipment. On July 14, 2020, HHS announced that it will distribute a point-of-care antigen testing instrument and approximately 400 tests to SNFs in high-impact areas or those that have three or more cases.
Current Funding Sources Available
Below is a list of the funding sources available. We’ll continue to update it with new opportunities.
Note on FEMA Funds
FEMA funds are awarded via a state, tribal, or territorial agreement (recipient) and then distributed to government and not-for-profit organizations (applicants). Organizations, including private not-for-profits, district hospitals, nursing homes, assisted living facilities, and clinics, can apply for public assistance once the recipient sets up an account for the applicant. Applicants must use the Grants Portal to submit a Streamlined Application for COVID-19-related expenses.
Assistance for emergency protective measures and activities include, but aren’t limited to:
- Management, control, and reduction of immediate threats to public health and safety
- Emergency medical care
- Medical sheltering
- Purchase and distribution of food
Applicants in any state can contact their Moss Adams professional for further information and guidance through this process.
Medicare Accelerated and Advance Payments
Beginning on Monday, March 30, 2020, Medicare providers may submit Accelerated and Advance Payment Request forms to their Medicare Administrative Contractor (MAC), via the MAC’s website. Their goal is to review and issue payment within seven days.
There are four requirements:
- Filed Medicare claims within 180 days
- Not in bankruptcy
- Not in active medical review or program integrity investigation, which includes any current Targeted Program Educate (TPE) audits or requests (known or unknown) and Recovery Audit Contractor (RAC) audits
- No outstanding delinquent overpayment amounts due for which you’ve received notification, including any you believe are incorrect
The last two requirements could be challenging for many hospitals if they don’t know their current status on TPE or other audits with Medicare. It’s recommended providers assess their audits, medical review, and overpayments status.
According to the CMS Fact Sheet:
- Most Part A and B providers and suppliers may request up to 100% of the Medicare payment amount for a three-month period and will have 210 days from the date of payment to repay the balance.
On April 26, 2020, CMS announced that applications from Part B providers will no longer be accepted, and pending applications will be reevaluated in light of newly available Provider Relief Fund.
- Inpatient acute care hospitals, children’s hospitals, and certain cancer hospitals may request up to 100% of the Medicare payment amount for a six-month period and will have one year from the date of payment to repay the balance.
- Critical access hospitals (CAH) may request up to 125% of their payment amount for a six-month period and will have one year from the date of payment to repay the balance.
Claims will continue to be submitted and paid for the first 120 days; after this point, an automatic recoupment process will begin.
Additional funding sources may be available through regional philanthropic organizations for COVID-19 response.
One compelling option is the Small Business Administration’s (SBA) 7(a) Loan Expansion, the Paycheck Protection Program, which was part of the CARES Act signed into law on March 27, 2020, and greatly expanded and updated on April 24, 2020. Please see our updated guidance below.
Additional Non-Application Based Assistance
Some benefits to help reduce hardship will be given to health care providers universally, without requiring an application or reporting process.
- The relaxation of Medicare Quality Payment Program, Merit-based Incentive Payment System (MIPS), and Value-Based Purchasing (VBP) reporting requirements.
- Temporary, enhanced federal Medicaid funding by 6.2% for states.
- A 20% increase in Medicare reimbursement for hospitals discharging COVID-19 patients.
- Delayed planned spending cuts to Medicaid DSH hospitals.
- Elimination of 2% sequestration Medicare payment cuts from May 1, 2020, to December 31, 2020.
- Waiver of face-to-face visit requirement for home dialysis, hospice, and home health, which enables telehealth.
- Ability for midlevel providers to refer Medicare patients into home health.
- Blanket waivers of Stark Physician Self-Referral Prohibitions, as related to COVID-19.
- Legal waivers allowing unprecedented use of novel locations as hospital facilities (Ambulatory Surgery Centers, stadiums, dorms, and hotels, for example) and expanded telehealth flexibilities.
- Medicare guidance to Durable Medical Equipment suppliers allowing coverage for upgraded multifunction ventilators, even when not medically necessary.
- Enhanced opportunity for collaboration via joint ventures, research, and other partnerships, due to the Federal Trade Commission and US Department of Justice offering expedited seven-day reviews.
- Delayed deadlines to meet interoperability requirements.
- Ability to earn MIPS credit from new COVID-19 Clinical Trials improvement activity.
- Major updates to the Medicare Shared Savings Program—application cycle, attribution, benchmark and cost calculations, down-side risk.
- Extended deadlines for hospitals and CAHs to submit the Promoting Interoperability hardship exception to September 1, and November 30, respectively.
- CMS Innovation Center models announced flexibilities for COVID-19 including updates to financial methodology, quality reporting requirements, and timelines.
- The IRS extended the Community Health Needs Assessment deadline to December 31, 2020.
To utilize current and future grant funding, staff must be trained on COVID-19 billing and coding procedures. This will help them provide complete and accurate counts of patients, procedures, and tests specifically related to the disaster.
Thorough record-keeping is essential—both for reimbursable direct costs such as testing kits as well as timekeeping for administrative staff that reflects added tasks and time related to the disaster.
Demand and reimbursement for telehealth services is greatly expanded with required matching to the equivalent in-person service. It’s incumbent upon providers to develop capacity to provide these services.
Both telehealth and visits using noninteractive audio and video are available to furnish services. Ideally, telehealth service should integrate with the electronic health record for continuity of documentation practices and staff should be trained in telehealth billing procedures. Concise information about telehealth can be found on a web page created by the Health Resources & Services Administration (HRSA).
Use the following when billing for telehealth during the pandemic:
- Place of Service (POS) equal to what it would have been if the service was furnished in-person
- Modifier 95, indicating the service rendered was actually performed via telehealth
- Effective March 18, 2020, the modifier CS should be added for Cost Sharing for specified COVID-19 testing-related services that result in an order to administer a COVID-19 test
- No billing changes for institutional claims; CAH method II claims should continue to bill with modifier GT
- Services performed via telephone, patient portal or other methods that aren’t interactive should be documented but billed with a specific set of codes for Medicare
We’re Here to Help
Navigating the application process for federal and state grants as well as other funding sources can be challenging, requires swift action, and oftentimes needs extensive supporting documentation.
And the process doesn’t stop once you apply for the funds. After an application is submitted, you’ll need to have ongoing administration to help receive available funds, account for them correctly, and decipher complex rules and regulations relating to funding overlap.
To learn more about applying for available grants and funding and subsequent administration, contact your Moss Adams professional.
Note on COVID-19
During this unparalleled time, we’re closely monitoring the COVID-19 situation as it evolves so we can provide up-to-date guidance and support to help you combat uncertainty. For regulatory updates, strategies to help cope with subsequent risk, and possible steps to bolster your workforce and organization, please see the following resources: