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CARES Act - Health Care Providers to Receive Immediate 6.2% Bonus on 2019 Medicare Fees

April 20, 2020 | Category: Corporate and Taxation, Health Law, News

In addition to relief provided to small businesses, pursuant to the Paycheck Protection Program (PPP), under the Coronavirus Aid, Relief and Economic Security (CARES) Act, the Act earmarked $100 billion for health care providers.  The Department of Health and Human Services (HHS) announced April 10 that an initial outlay of $30 billion would be distributed directly to physicians, group practices and hospitals.
 
However, a major difference between the PPP and HHS programs is that, while most small businesses must jump through many hoops in order to apply and qualify for a PPP loan (and, as most of us know, the PPP has, at least temporarily, exhausted its funds and is awaiting Congress to approve additional funding), the HHS program provides that any health care provider who billed Medicare in 2019 automatically receive a one-time payment in an amount based on a percentage of their 2019 Medicare fees. The lump sum will equal roughly 6.2% of total Medicare fee for-service payments in 2019. By now, most health care providers should have already received their payment!

Additionally, health care providers are not precluded from independently applying for a PPP loan, provided they qualify for them.  
 
HHS began distributing the funds on April 10 via direct deposit, and the agency reminds providers that the disbursements are theirs to keep. "These are payments, not loans, to health care providers, and will not need to be repaid," HHS states.
 
All payments are going to a medical group's billing organization according to its taxpayer identification number (TIN).

As a condition to receiving these funds, hospitals, hospices and physicians must agree not to seek collection of out-of-pocket payments, such as co-payments and deductibles from a COVID-19 patient that are greater than what the patient would have otherwise been required to pay if the care had been provided by an in-network provider.
 
"Individual physicians and providers in a group practice are unlikely to receive individual payments directly, as the group practice will receive the relief fund payment as the billing organization," HHS says. "Providers should look to the part of their organization that bills Medicare to identify details on Medicare payments for 2019 or to identify the accounts where they should expect relief payments."
 
The agency is using a calculation, based on a provider's 2019 fees in relation to the $484 billion in total fee-for-service expenditures, to distribute the $30 billion in relief funds. To estimate your payment, you can calculate a 6.2% rate on your 2019 Medicare fees.

HHS has partnered with UnitedHealth Group to distribute the relief funds. Providers will receive the payment in one of two ways: If you typically get paid electronically, you'll see an automatic payment via Optum Bank with "HHSPAYMENT" as the payment description; if you normally receive a check in the mail, you can expect the bonus payment "within the next few weeks."

While providers are not required to fill out any paperwork to receive the funds, the provider must accept HHS' terms and conditions within 30 days of receipt of the payments.  Those terms come with certain stipulations. For instance, any entity receiving more than $150,000 in relief funds must submit a quarterly report to the HHS Secretary outlining how the funds are being used. You can find the full terms and conditions HERE.  If the provider receives payment and does not wish to comply with these Terms and Conditions, the provider must contact HHS within 30 days of receipt of payment and remit the full payment to HHS as instructed.

HHS is making the funds available to medical practices that may have had to close due to the current economic situation. "If you ceased operation as a result of the COVID-19 pandemic, you are still eligible to receive funds so long as you provided diagnoses, testing or care for individuals with possible or actual cases of COVID-19," the agency says. "Care does not have to be specific to treating COVID-19. HHS broadly views every patient as a possible case of COVID-19."
 
It remains to be seen how HHS will distribute the remaining $70 billion of the health care relief fund.

I will provide continuing updates on other information relevant or helpful to my readers as I learn of same, as we all strive to survive, both personally and financially, through the coronavirus crisis together!

We are all in this together! We will get through this, together!

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