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Through the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), and the Paycheck Protection Program and Health Care Enhancement Act, $175 billion has been appropriated to the Provider Relief Fund.  HHS has paid out these relief funds as grants to health care providers in order to prevent, prepare for, and respond to COVID-19. Members of Alvarez & Marsal Healthcare Industry Group’s Regulatory and Compliance Services have partnered with Healthcare Performance Insider to review Provider Relief Fund requirements, rules on how grant monies are to be spent and accounted for, and how to best position your organization for future federal audits and enforcement activities.

Can you explain how HHS has allocated these funds to Recipients?

• HHS has provided distributions in two broad categories: General Distributions and Targeted Distributions. To date, these allocations have totaled approximately $116 billion.
• General distributions include $50 billion dollars for Medicare providers who bill Medicare fee-for-service and approximately $15 billion dollars for providers who predominantly serve the Medicaid/CHIP population and dental providers. Under these distributions, providers generally are eligible for 2% of the providers gross patient revenue, regardless of the providers payor mix.
• Targeted distributions total approximately $51 billion and are allocated to providers in areas particularly impacted by the COVID-19 outbreak ($22B), rural/small metro providers ($11B), skilled nursing facilities ($4.9B), tribal hospitals ($500M), safety net hospitals ($13B) and providers requesting reimbursement for the treatment of the uninsured.

What are the requirements that Recipients need to keep in mind when accepting these funds?

• Recipients of these funds are required to meet the allocation specific Terms and Conditions and attest to the Terms and Conditions within 90 days of receiving payment.
• There are different Terms and Conditions based upon the various funding types that are provided. So far, HHS has posted 15 different T&Cs with variations based upon the allocation.
• The CARES Act Provider Relief Fund Attestation Portal found on the HHS website will guide you through the attestation process.

Are recipients required to pay back the money received from these distributions? 

• Provider Relief Fund dollars are not required to be paid back so long as a Recipient is able to meet the Terms and Conditions for the specific allocation.

What do the Terms and Conditions are Recipients required to attest to?

• Since funding allocations have unique Terms and Conditions it’s very important for Recipients to review and understand the specific requirements with the Terms and Conditions for that particular funding source.
• The Recipient must be able to certify that, among other requirements, it was eligible to receive the funds and that the funds were used in accordance with allowable purposes (e.g., to prevent, prepare for, and respond to coronavirus).
• There are some consistencies that apply across most Terms and Conditions, including:
• Eligibility: Recipients provided, on or after 1/31/2020, diagnosis, testing, or care for COVID-19 patients, is not terminated, revoked, or excluded from participating in Medicare, Medicaid, or other Federal health care programs.
• Use of Payments: Prevent, prepare for, and respond to coronavirus & to reimburse for health care related expenses or lost revenues.
• Prohibitions on Double Dipping and Balancing Billing
• Appropriations requirements – limitation on executive pay
• Comply with reporting, record keeping and auditing requirements
• Consent to public disclosure of the payment

It is important for Recipients to pay attention to the details of the specific funding source requirements and be able to support that they meet the requirements.

What if a Recipient reviews the Terms and Conditions and finds they cannot or do not want to meet the requirements? 

• If a Recipient cannot meet the Terms and Conditions or chooses not to, he/she must reject and return the payment within 90 days.
• Providers may return a payment by going into the attestation portal within 90 days of receiving payment and indicating they are rejecting the funds.
• If they do not do so within the required time they will be deemed to have agreed to the Terms and Conditions and be subject to the requirements.

What happens if a Recipient attests to the Terms and Conditions but fails to adhere to them? 

• Non-compliance with any term or condition will serve as grounds for HHS to recoup some or all of the payments received.
• Provider Relief Fund Recipients who violate the terms of the grants are also subject to civil and criminal prosecutions for fraud under the federal False Claims Act (FCA). The FCA provides for civil penalties ofup to $23,331 per claim, plus three times the amount of actual damage to the government and can result in imprisonment.
• HHS also has the authority to impose administrative penalties including revocation of Medicare billing privileges, exclusion from federal healthcare programs, fines, civil damages, and/or imprisonment.
• Failing to meet the Terms and Conditions can have severe consequences for Recipients.

Do you have any insights on what the enforcement environment will look like? 

• The CARES Act establishes an oversight enforcement structure similar to what was seen when stimulus money was provided during the economic crisis of 2008, with three new oversight bodies that are focused on the disbursement of CARES Act funds.
• HHS will have significant anti-fraud monitoring of funds distributed and the Office of Inspector General will provide oversight to ensure that Federal dollars are used appropriately.
• The government has allocated over $100 million dollars for enforcement activities, so we anticipate that significant auditing and monitoring activities will occur.
• The OIG’s oversight efforts will include audits of Recipients to assess whether they met use, reporting and other requirements, and where appropriate, recommend the recovery of misspent funds. The OIG also announced that it will use risk assessment and data analytics to identify, monitor and target potential fraud, waste and abuse affecting HHS programs and beneficiaries. Recipients should be acutely focused on ensuring compliance with the terms and conditions.

Can you explain the authority and oversight responsibilities that government agencies, like HHS, haven when Congress appropriates funds, such as the CARES Act?

• When an agency, such as HHS, is granted the authority to distribute appropriated funds, it must strictly adhere to the requirements within the authorizing Act.
• The CARES Act makes it clear that funds are to be used to prevent, prepare for, and respond to coronavirus OR reimburse Recipients for attributable healthcare-related expenses or lost revenues.
• HHS has the fundamental responsibility to ensure that CARES Act funds are distributed and utilized only for that purpose and must strictly adhere to those requirements.

How will HHS ensure that funds are utilized in accordance with the requirements of the CARES Act?

• HHS requires Recipients to comply with specific Terms and Conditions for the specific distribution made from the Provider Relief Fund…these are the “strings attached” that each Recipient is required to attest to within 90 days of receiving a distribution.
• All Recipients are required to attest to and comply with the Terms and Conditions or return funds.
• HHS will have significant anti-fraud monitoring of the funds distributed, and the Office of Inspector General will provide oversight to ensure that Federal dollars are used appropriately. There has been over $100 million allocated to the OIG for enforcement activities.
• Expect the OIG to audit providers in the future and will require repayment of any Provider Relief Fund payments that were used inappropriately.
• Recipients of CARES Act funds must be very careful to conduct effective diligence to demonstrate compliance with Terms and Conditions.

What do Recipients need to know and understand when it comes to the Terms and Conditions?

• Recipients must be able to truthfully and accurately attest to each Provider Relief Fund distribution received. Non-compliance with any term or condition is grounds for HHS to recoup some or all of the payments received and impose fines and penalties.
• It’s important for a Recipient to have a clear understanding of the funding sources being sought and obtained, as well as the designated use for each source of funds.
• Approach the Terms and Conditions and attestation process with a compliance mindset and establish a framework that enables you to track, document and provide a rationale for the determinations made and actions taken in real time.
• Auditing may not occur for years; document your rational now to save future time and trouble.

How do Provider Relief Fund Recipients establish compliance with the Terms and Conditions?

• Recipients should develop a framework, such as a comprehensive checklist, for tracking the requirements, distinctions and use of each distribution.
  • Track important dates to ensure the organization has sufficient time to conduct due diligence prior to each attestation deadline
  • Document the basis for meeting each term and condition
  • Include a specific “documentation” column to allow for easy reference to all supporting information/documents for each item.
  • Identify a business owner who is responsible and accountable for the information. Consider sub-attestation process
  • Centralize the information underlying documentation
• Centralizing this information is important for several reasons:
  • Provides insight into what sources of funding have been obtained,
  • Remember that Receipt of funds from one source may impact the organization’s eligibility for funding from another source, so it’s important to keep record of all funding sources
  • It will be easier to ascertain the information upon audit
• Since funding allocations have unique Terms and Conditions it’s very important for Recipients to review and understand the specific requirements with the T&Cs for that particular funding source.
• Recipients should determine how to best support and document support for each term and condition contemporaneously rather than waiting for an inevitable OIG audit.

Are there specific areas that Recipient’s should pay close attention to when attesting to the T&Cs?

• Recipients are required to meet all of the Terms and Conditions, so as part of Recipients due diligence they should make sure that each area is covered.
• Ensuring that funds are used appropriately, and no double dipping are two common concerns.
• While Terms and Conditions may vary between General and Targeted distributions, the resounding requirement is that the funds may only be used to prevent, prepare for and respond to coronavirus, and can only be used to reimburse a provider for healthcare related expenses and lost revenues.
• Recipients are required to attest this in the Terms and Conditions and will need to be able to support that the funds obtained were utilized for these purposes.

What actions do you recommend a Recipient take to support that funds were appropriately used?

• Recipients should carefully gather and track COVID-19 Expenses, ensuring they meet the required purpose and do not include any of the prohibited expenses specified in the statutory provisions of the terms and conditions. Consider utilizing approaches such as:
• Establishing general ledger accounts for each major type of COVID-19 Expense
• Creating COVID-19 specific expense accounts, defining what is coded to these accounts
• Instituting review and approval processes for COVID-19 Expenses
• Lost Revenues includes any revenue that a healthcare provider lost due to coronavirus. This may include revenue losses associated with fewer outpatient visits, postponement of elective procedures, change in payor mix, time to return to normal. Recipients should utilize reasonable methods to estimate Lost Revenues including, but not limited to:
• Comparing budgeted revenue without considering the impact of COVID-19 to actual revenue
• Comparing revenues to the same period of the previous year
• Recipients should have narratives to support assumptions/approaches for calculating Lost Revenues.
• Recipients should maintain detailed documentation of COVID-19 Expenses and Lost Revenues, including projections and assumptions utilized to support requests.

After a Recipient conducts the initial due diligence, receives funding, and attests to the Terms and Conditions does their obligation end?

• No, once a Recipient accepts any distribution from the Provider Relief Fund and certifies to compliance with applicable terms and conditions, they have ongoing compliance obligations.
• All providers receiving Provider Relief Fund payments are required to comply with the reporting requirements described in the T&Cs and specified in future directions issued by the HHS Secretary.
• Recipients of greater than $10,000 will be required to submit reports about the use of their Provider Relief Fund distribution by 2/15/2021 (within 45 days of the end of CY 2020) on their expenditures through the period ending 12/31/2020.
• Recipients with funds unexpended after December 31, 2020 must submit a second and final report no later than July 31, 2021.
• Detailed PRF reporting instructions and a data collection template with the necessary data elements will be available through the HRSA website.

Are there compliance considerations that an organization should consider?

• Recipients should integrate Provider Relief Fund compliance into their overall compliance structure. The organization’s Compliance Officer should be involved each step of the way from attesting to the Terms and Conditions, to tracking expenditures, to training employees and writing policies and procedures, turning in required reports to HHS and getting ready for audit.
• Recipients should develop a Policy and Procedure document that sets forth the required process and steps that need to occur. This should include controls and designated approvals.
• Conduct training on the process and procedures to inform and educate staff on the process. Staff should understand the critical nature of complying with the program.
• In preparation for anticipated OIG oversight actions, Recipients should conduct and document internal monitoring activities focusing on use of funds, double dipping, and balance billing.

Contributing Members of Alvarez & Marsal Healthcare Industry Group’s

Regulatory and Compliance Services Team

Peter Urbanowitz: Managing Director and co-lead of A&M’s Healthcare Industry group and former HHS Chief of Staff, responsible for coordinating all HHS agencies and staff divisions.

Colleen Curran: Managing Director in A&M’s Healthcare Industry Group’s Regulatory and Compliance Services practice who has over 20 years of healthcare regulatory and compliance experience including serving as in house counsel for a large hospital system,  CEO and COO for medical group practices and as a practicing healthcare attorney.

Mary Findley: Senior Director in A&M’s Healthcare Industry Group’s Regulatory and Compliance Services practice who has nearly 30 years of healthcare experience spanning compliance, regulatory, tax and ethics.  Most recently she served as Senior Vice President and Chief Compliance and Ethics Officer at Parkland Health & Hospital System, one of the largest public health systems in the U.S.