HHS has recently issued a great number of clarifications to multiple aspects of its Provider Relief Fund programs authorized by the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
Attestation Deadline Extension
The Department of Health and Human Services (HHS) announced on May 7, 2020 an extension to the deadline for health care providers to attest to receipt of payments from the Provider Relief Fund and accept the terms and conditions from 30 days to 45 days from the date the provider received the payment. Not returning the payment within 45 days of receipt of payment will be viewed as acceptance of the terms and conditions.
Additional General Distribution FAQs
On May 6, 2020, HHS released additional General Distribution FAQs including information about recoupment of payment, overpayments and returning payments, and balance billing. The “General Distribution” refers to $50 billion in funds that HHS made available from the Provider Relief Fund to providers that billed Medicare on a fee-for-service basis in 2019 and that provided diagnosis, testing or care for individuals with possible or actual cases of COVID-19 after January 31, 2020. The funds were issued in a $30 billion tranche and $20 billion tranche, respectively.
In the General Distribution FAQs, HHS has announced that it “does not intend to recoup funds as long as a provider’s lost revenue and increased expenses exceed the amount of Provider Relief funding a provider has received.” This guidance suggests that as long as recipients of funds from the General Distribution are able to prove that lost revenues and expenses attributable to COVID-19 exceed the total payments from the Provider Relief fund, then the recipient will be able to keep those funds. However, HHS will maintain the right to audit recipients to ensure that this requirement is met and to recoup any payments that were made in error or exceed lost revenue or increased expenses due to COVID-19. HHS has made clear that it will have significant anti-fraud monitoring and the Office of Inspector General will provide oversight.
Overpayment and Returning Payments
According to HHS, providers who believe they were overpaid or were paid in error should reject the entire General Distribution payment and submit revenue documents through the General Distribution portal so that HHS can determine the provider’s correct payment. HHS has specified that overpayment may occur when a provider does not have or does not anticipate having COVID-19-related lost revenues or increased expenses equal to or in excess of the relief payments received. As HHS explains, providers may return their General Distribution payment by going to the attestation portal within 45 days of payment and indicating that they are rejecting the funds. Providers who received their payment through Automated Clearinghouse (ACH) credit must reject the payment using the ACH return code of “R23 - Credit Entry Refused by Receiver." If a provider was paid via paper check, the provider can reject the payment by destroying the check or mailing the check back to the contractor who is administering payments on behalf of HHS.
If a provider believes it was underpaid, it should accept the payment and submit its revenues in the provider portal to determine its correct payment.
HHS emphasized that the prohibition on balance billing in the terms and conditions for the General Distribution does not apply to all patients and/or all care. Instead, the balance billing prohibition applies to “all care for a presumptive or actual case of COVID-19.” HHS defines a presumptive case of COVID-19 as a case “where a patient’s medical record documentation supports a diagnosis of COVID-19, even if the patient does not have a positive in vitro diagnostic test result in his or her medical record.”
HHS confirmed that the terms and conditions related to balance billing do not prevent a provider from submitting a claim for payment from a patient’s insurance company. However, an out-of-network provider delivering COVID-19-related care to an insured patient may not seek to collect out-of-pocket expenses from the patient in an amount greater than what the patient would have been required to pay if the care was provided in-network.
According to HHS, most health insurers have committed to reimbursing out-of-network providers that treat their health plan members for COVID-19-related care at the insurer’s prevailing in-network rate. However, in cases where the health insurer is not willing to do so, providers may collect out-of-pocket expenses from the patient in an amount that is no greater than what the patient would have otherwise been required to pay if the care had been provided by an in-network provider.
Additionally, HHS clarified that an independently contracted provider (such as an anesthesiologist or laboratory) is also prohibited from balance billing for care related to actual or presumptive COVID-19 patients if the independent contract has attested to receiving a payment from the Provider Relief Fund.
Payment Allocation Methodology for High Impact Payments and Rural Hospital and Provider Payments
HHS released payment allocation methodology on May 8, 2020 to explain high impact payments and rural hospital and provider payments from the Provider Relief Fund.
High Impact Payments
For a general discussion of the high impact payments, please see here.
HHS allocated $10 billion in Provider Relief Funds to hospitals with 100 or more COVID-19 inpatient admissions through April 20, 2020 based on a flat rate of $76,975 per admission.
The agency clarified that the payments were not intended to reimburse the facilities for the cost of admission. Instead, the number of admissions was used as a “proxy for the extent to which each facility experienced lost revenue and increased expenses associated with directly treating a substantial number of COVID-19 inpatient admission.”
HHS also allocated $2 billion to these hospitals based on each hospital’s Medicare Disproportionate Share.
Rural Hospital and Provider Payments
For a discussion of the overall distribution of the Rural Hospital and Provider Payments, please see here.
According to HHS, recipients of the Rural Hospital and Provider Distribution fall into three categories: rural acute care general hospitals and critical access hospitals (CAHs), rural health clinics (RHCs) and Community Health Center sites located in rural areas.Rural Acute Care Hospitals and Critical Access Hospitals:
HHS distributed funds based on a graduated base amount plus an additional amount to account for a portion of their usual operating costs and the volume of care they regularly provide. The most recent, publicly available Medicare hospital cost reports were used to identify operating costs. The calculation used to determine the amount of the base payment provided rural hospitals with more than $10 million in annual operating expenses with a base payment of $3 million. Rural hospitals with no operating expense data received a base payment of $1 million. The graduated base payment schedule is located here.
The total calculated amount was determined based on the following formula:
Per Hospital $ Allocation = Graduated Base payment + ~1.96777% of the hospital’s operating expenses
The total calculated amount was then multiplied by ~1.0325 to determine the actual payment per rural provider.Rural Health Clinics:
Provider-Based RHCs: RHCs connected with rural hospitals have their allocations included with their hospital’s allocation.
Independent RHCs: A base amount, plus a percentage of total operating costs, was calculated for independent RHCs not associated with a hospital using RHC Cost Report data according to the following formula:
Per Independent RHC $ Allocation = $100,000 per clinic site + 3.6% of the RHC’s operating expensesCommunity Health Centers:
The allocation for health centers in rural areas was a flat payment amount per health center site of $100,000. Funds were distributed to each organization based on the number of individual rural clinic sites it operates.
Per Federally Qualified Health Center $ Allocation = $100,000 per rural clinic site
The total calculated amount for RHCs and health centers was then multiplied by 1.03253231 to determine the actual payment per rural provider.
We are closely monitoring developments with the Provider Relief Program.
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