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HHS Announces Plans for Distribution of Remaining CARES Act Provider Relief Funding

HHS Announces Plans for Distribution of Remaining CARES Act Provider Relief Funding
By Brian S. Werfel, Esq.

March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).  As part of that Act, Congress allocated $100 billion to the creation of a “CARES Act Provider Relief Fund,” which will be used to support hospitals and other healthcare providers on the front lines of the nation’s coronavirus response.  These funds will be used to fund healthcare-related expenses or to offset lost revenue attributable to COVID-10.  These funds will also be used to ensure that uninsured Americans have access to testing a treatment for COVID-19.  Collectively, this funding is referred to as the “CARES Act Provider Relief Fund.”

The Department of Health and Human Services (HHS) began the disbursement of the first $30 billion tranche of the CARES Act Provider Relief Funding on April 10, 2020, with full disbursement of this tranche being completed by April 17, 2020.  The American Ambulance Association has issued a Frequently Asked Question that provides additional details on how the payments under this first tranche were calculated, as well as the terms and conditions that are applicable to this disbursement.

On April 22, 2020, HHS announced its plans for the disbursement of the remaining $70 billion in CARES Act Provider Relief Funding.  These monies will be distributed using four broad categories:

  1. General Allocation. HHS indicated that it will be supplementing the initial $30 billion tranche with an additional $20 billion.  Ultimately, HHS’ intent is to distribute this $50 billion to all eligible healthcare providers and suppliers (including ambulance providers and suppliers) based on the provider’s or supplier’s 2018 net patient revenue.  “Net patient revenue” is a term of art in the Medicare world, and is used to describe all patient revenues (from whatever source) minus: (i) provision for bad debts, (ii) contractual adjustments, (iii) charity discounts, (iv) teaching allowances, (v) policy discounts, (vi) administrative adjustments, and (vii) other deductions from revenue.  HHS indicated that it would calculate every provider’s and supplier’s proportionate share of the entire $50 billion would be using their 2018 net patient revenue.  HHS would then subtract the amounts that the provider or supplier received during the first tranche, and pay the unpaid balance over the next few weeks.  For institutional providers that have already submitted 2018 cost reports, these payments will go out on April 24, 2020.  Providers or suppliers that do not have adequate cost report data on file will need to submit their revenue information using an online portal that will become available this week, with payments to follow on a rolling basis once a provider’s or supplier’s information has been validated.  As with the first tranche, recipients of relief funding will be required to sign an attestation confirming receipt of the funds, and agreeing to the terms and conditions, including the restrictions on surprise medical billing.
  2. Targeted Allocations. HHS indicated that it would be setting aside an additional $20.4 billion for certain targeted segments of the health care industry.  This includes: (i) $10 billion being allocated to hospitals in areas that have been particularly hard-hit by the COVID-19 outbreak, (ii) $10 billion for rural health clinics and hospitals, and (iii) $400 for the Indian Health Service.
  3. Reimbursement for Uninsured Patients. HHS indicated that it will allocate an undisclosed portion of the remaining $29.6 billion to reimburse healthcare providers and suppliers for COVID-related treatment of the uninsured.  This allocation is available for the reimbursement of emergency and non-emergency ground ambulance transportation furnished to uninsured COVID-19 patients; however, air and water ambulance providers are not eligible to participate.  Reimbursement will be available for COVID-related care furnished with dates of service on or after February 4, 2020.  Payments will be made at the Medicare rates, subject to available funding.  To be eligible for reimbursement for care furnished to uninsured COVID-19 patients, ambulance providers and suppliers will need to enroll as a provider participant, which can be done starting on April 27, 2020.  Claims will be accepted starting in early May 2020.  As a condition to receiving reimbursement for the care of uninsured COVID-19 patients, you will be required to accept HHS’ payment as payment-in-full, i.e., you will not be permitted to balance bill the patient.  Additional information on HHS’ reimbursement for uninsured COVID-19 patients can be found at:
  4. Reimbursement for Certain Medicaid-Only Providers. HHS indicated that it will allocate an undisclosed portion of the remaining $29.6 billion to reimburse skilled nursing facilities, dentist, and provides that only participate in State Medicaid Programs.

Upcoming Important Dates

 To participate in these future funding tranches, AAA Members will need to keep the following dates in mind:

  1. On or after April 23/24 – You will need to access the online portal to submit your revenue information in order to receive the second tranche of the $50 billion general allocation of provider relief funds.
  2. April 27, 2020 – You will need to register for the COVID-19 Uninsured Reimbursement Allocation. Once open, the online portal can be accessed from the following webpage:
  3. Early May 2020 – You will be able to start submitting claims to the COVID-19 Uninsured Reimbursement Allocation.


Centers for Medicare and Medicaid Services (CMS), Coronavirus Aid Relief and Economic Security Act (CARES Act), COVID-19 coronavirus

Brian Werfel

Brian S. Werfel, Esq. is a partner in Werfel & Werfel, PLLC, a New York based law firm specializing in Medicare issues related to the ambulance industry. Brian is a Medicare Consultant to the American Ambulance Association, and has authored numerous articles on Medicare reimbursement, most recently on issues such as the beneficiary signature requirement, repeat admissions and interrupted stays. He is a frequent lecturer on issues of ambulance coverage and reimbursement. Brian is co-author of the AAA’s Medicare Reference Manual for Ambulance, as well as the author of the AAA’s HIPAA Reference Manual. Brian is a graduate of the University of Pennsylvania and the Columbia School of Law. Prior to joining the firm in 2005, he specialized in mergers & acquisitions and commercial real estate at a prominent New York law firm. Werfel & Werfel, PLLC was founded by David M. Werfel, who has been the Medicare Consultant to the American Ambulance Association for over 20 years.

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