Hospitals, Medical Practices, Healthcare Practices Can Claim HHS Relief Payments
The Coronavirus Aid, Relief, and Economic Security (CARES) Act, has been a much-needed source of funds for businesses. Ever since COVID-19 was introduced to the American people, the government took quick action to reduce the spread of the virus. The result has meant the closure of countless businesses, wide-spread social distancing and a healthcare industry on edge.
Since the CARES Act was passed in March, business owners have been working closely with their advisors and bankers to secure the necessary funds to keep afloat. And while the Paycheck Protection Act and Disaster Relief funds have proven to be vital to the economic security of so many, those in the health and human services have found themselves in a particularly fragile state. Fortunately, the CARES Act includes a $30 billion provision just for those in this particular sector.
HHS Relief Fund Payments Now Available
Initially, the Health and Human Services (HHS) Relief Fund Payment is designed to be a $30 billion infusion to the country’s healthcare system for the purpose of supporting healthcare-related expenses and/or lost revenues directly resulting from the COVID-19 pandemic. HHS is working on additional targeted distributions with a focus on provides in areas more impacted by the COVID-19 outbreak, rural providers and providers of services with lower shares of Medicare FFS reimbursement or who predominantly serve the Medicaid population.
Already up-and-running, the program places the essential funds directly into the accounts of Medicare fee for service providers as soon as this week and will appear as “HHSPayment” in the recipient’s account. Additionally, it’s important to note, that these funds are not loans. Rather, they are payments to healthcare providers that will not have to be repaid. All you have to do is, within 30 days of receiving the funds, you must sign an attestation confirming that you have received the funds and that you agree to the terms and conditions of the payment.
Initially, there was some confusion about who would be eligible to receive the payments. Fortunately, as of April 15, 2020, the Department of Health and Human Services cleared up the matter by stating:
“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.”
Click to view the entire HHS Relief Fund Payment Summary and to view the Relief Fund Terms and Conditions Sheet.
Healthcare Providers Encouraged To Take Advantage Of The CMS Accelerated and Advanced Payment Program
In addition to the HHS Relief Fund Payments outlined above, healthcare providers are also encouraged to take advantage of the expanded Centers for Medicare & Medicaid Services (CMS) Accelerated and Advance Payment Program. This form of relief is being provided to a broader group of Medicare Part A providers and Part B suppliers.
In this scenario, a provider can request/apply a CMS advance a Medicare provider up to 100 percent of their Medicare 3 monthly payment history. However, while the HHS Relief Funds were a direct payment, the CMS Accelerated and Advanced Payment is a loan and will need to be paid back.
After 120 days of providing the healthcare provider the advance of funds, CMS will begin withholding the advance from any new claims the practice submits. Additionally, according to the program, all advanced money must be repaid to CMS in 210 days after withholding begins. Additionally, these advanced payments currently carry a 10.25 percent interest rate. However, the State Medical Association and the American Medical Association are working to reverse this interest rate when Congress takes steps to push through the next COVID-19 response legislation.
Click here to read the Accelerated Advanced Payment Program Fact Sheet.
To learn more about these options and to determine the right course of action for your medical practice, email your Rea & Associates advisor. Or, you can contact me directly at alan.hill@reacpa.com or 440.266.0907.
By Alan Hill, CPA (Mentor office)
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