The Cares Act – CMS Begins Immediate Distribution Of $30B From Public Health And Social Services Emergency Fund

The Coronavirus Aid, Relief, and Economic Security (CARES) Act included $100 billion for the Public Health and Social Services Emergency Fund (the “Fund”).  This funding is designed to support healthcare-related expenses or lost revenue attributed to the COVID-19 pandemic and ensure that patients can get testing and treatment for COVID-19.  On April 7, 2020, Seema Verma, CMS Administrator, announced that the $100 billion Fund would be distributed in phases.  The first phase began on April 10, 2020 and includes direct payments of $30 billion to eligible providers.  Detailed information regarding these payments is available at https://www.hhs.gov/provider-relief/index.html.

Eligible Providers

All facilities and providers that received Medicare Fee-For-Service (FFS) payments in 2019 are eligible for initial distributions from the Fund.

Amount of Distribution

The amount of each healthcare organization’s initial distribution is based on the organization’s share of total Medicare FFS payments (not including Medicare Advantage) in 2019.  To estimate the payment amount, CMS provides the following formula:  (Medicare FFS Payments in 2019 / $484B) x $30B. 

Distributions began on April 10, 2020 and are being delivered via direct deposit.  Payments are being made to billing organizations according to Taxpayer Identification Number (TIN).  CMS notes that the payment will include “HHSPAYMENT” as the payment description.  Providers who receive paper checks from CMS should expect a mailed check in the next few weeks. 

Terms and Conditions 

The direct distributions from the Fund are payments, not loans, and will not need to be repaid.  Within thirty (30) days of receipt of the funds, providers will be required to complete an attestation confirming receipt of the funds and agreeing to CMS’ terms and conditions.  According to CMS, the attestation portal will be available the week of April 13, 2020.  Importantly, CMS noted that providers must agree not to seek collection of payments from COVID-19 patients that are greater than what the patient would have otherwise been required to pay if he or she was in-network.  All of the CMS terms and conditions are available here.

The Remaining $70 Billion

CMS is still developing a plan for distribution of the remaining $70 billion.  Distributions will likely focus on providers in areas hardest hit by the COVID-19 pandemic, rural providers, providers with lower shares of Medicare reimbursement, and providers treating the uninsured.