October 7, 2020

Just as things seem to be getting back to a state of semi-normalcy in this last quarter of 2020, we get yet another reminder of just how difficult this year has been—especially for America’s healthcare industry.  Schools and restaurants are opening around the country, and there is even a smattering of fans coming out to high school, college and professional football games.  So, on the surface, we’re feeling a bit better about the way things are trending.  However, last week, the federal government provided another indication of the fragility of the nation’s well-being.

On October 1, the Department of Health and Human Services (HHS) released a third phase of relief funds into the healthcare sector.  As you’ll recall, the Coronavirus Aid, Relief and Economic Security (CARES) Act authorized billions of dollars to support struggling health providers and facilities in the wake of the coronavirus pandemic that swept the nation.  Of the $175 billion authorized by the CARES Act, about $107 billion had been released in the first two phases.  This third phase will pump another $20 billion into America’s healthcare system.

Focus of the Funds

While the first phase of CARES provided funds to providers and hospitals based on Medicare volume, and the second phase targeted general reimbursement decline, as well as rural and Native American services, this third round “is designed to balance an equitable payment of 2 percent of annual revenue from patient care for all applicants plus an add-on payment to account for revenue losses and expenses attributable to COVID-19,” according to a news release by HHS.

In other words, the government is using this latest installment of CARES money to keep at-risk practices and facilities afloat.  You’ll recall that, in one of our articles this summer, we pointed out that many of the larger health systems actually realized greater revenues in the second quarter of this year when compared to the same quarter in 2019.  This was due in no small part to the federal infusion of CARES funds during the height of the pandemic.  However, not all hospitals realized that kind of windfall.  The government’s view is that this third round of funding may help to further sustain those hospitals facing real financial difficulty due to the effects of COVID.

Eligible Recipients

According to the HHS news release pertaining to this topic, the third round of CARES funding will be made available to a wide range of providers, to include the following:

• Providers who previously received, rejected or accepted a General Distribution Provider Relief Fund payment. Providers that have already received payments of approximately two percent of annual revenue from patient care may submit more information to become eligible for an additional payment.
• Behavioral Health providers, including those that previously received funding and new providers.
• Healthcare providers that began practicing January 1, 2020 through March 31, 2020. This includes Medicare, Medicaid, CHIP, dentists, assisted living facilities and behavioral health providers.

Application and Payment

According to HHS, eligibility for this third phase of funding will be based on the following criteria:

• All provider submissions will be reviewed to confirm they have received a Provider Relief Fund payment equal to approximately 2 percent of patient care revenue from prior general distributions.  Applicants that have not yet received Relief Fund payments of 2 percent of patient revenue will receive a payment that, when combined with prior payments (if any), equals 2 percent of patient care revenue.
• With the remaining balance of the $20 billion budget, the government will then calculate an equitable add-on payment that considers the following:
  • A provider’s change in operating revenues from patient care
  • A provider’s change in operating expenses from patient care, including expenses incurred related to coronavirus
  • Payments already received through prior Provider Relief Fund distributions

Providers will have to apply for this money, and HHS is urging all eligible providers to begin the process early.  All payment recipients will be required to attest to receiving the phase three General Distribution payment and accept the associated Terms and Conditions.

The application process begins this week and will run through November 6.  According to the HHS website: “All applicants must submit their TIN and financial information to the Provider Relief Fund Application and Attestation Portal.”  For more information about the Provider Relief Program, visit: hhs.gov/providerrelief.

Loan Repayment Delay

In addition to the third phase of the CARES Act payouts, HealthcareDive is reporting that President Donald Trump signed a law on October 1 that would provide further help for healthcare entities.  The law “delays the repayment date for advanced and accelerated Medicare loans, giving providers an additional year.”  The law will also delay Medicaid payment cuts for disproportionate share hospitals.

We at MiraMed encourage our readers to take advantage of the phase three relief fund distribution by applying as soon as possible.  In addition, we invite you to review our array of hospital-specific services.  You can find us at www.miramedgs.com or email us at info@miramedgs.com.