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Alerts and Updates

HHS Announces Initial $30 Billion Distribution from CARES Act Provider Relief Fund

April 13, 2020

HHS Announces Initial $30 Billion Distribution from CARES Act Provider Relief Fund

April 13, 2020

Read below

HHS has noted that these are payments, not loans, to healthcare providers, and will not need to be repaid unless the provider does not comply with the terms and conditions.

Immediate funds are now available for providers to receive a cash influx at a critical time. The challenge will not be receiving the funds, but rather keeping the funds after a future audit of compliance with the terms and conditions.

On April 10, 2020, the United States Department of Health and Human Services (HHS) announced the immediate distribution of an initial $30 billion in relief funding to providers in support of the nationwide COVID-19 response. The distribution is part of the $100 billion provider relief fund included in the Coronavirus Aid, Relief and Economic Security (CARES) Act recently passed by Congress. Importantly, HHS has noted that these are payments, not loans, to healthcare providers, and will not need to be repaid unless the provider does not comply with the terms and conditions.

The funding is intended to support healthcare-related expenses or lost revenue attributable to COVID-19. Additionally, the funding measures seek to reimburse providers for COVID-19 testing and treatment of uninsured Americans.

The initial distribution of the $30 billion will go to hospitals and providers across the nation enrolled in Medicare. According to HHS, facilities and providers will be allotted a portion of the $30 billion based on their share of the 2019 Medicare fee-for-service (FFS) reimbursements.

Who Is Eligible for the Initial $30 Billion Distribution?

All facilities and providers that received Medicare FFS reimbursements in 2019 are eligible for the initial rapid distribution.

Payments to practices that are part of larger medical groups will be sent to the group’s central billing office.

HHS has indicated that all relief payments are made to the billing organization according to its Taxpayer Identification Number (TIN).

Large organizations and health systems will receive relief payments for each of their billing TINs that bill Medicare.

Employed physicians should not expect to receive an individual payment directly. The employer organization will receive the relief payment as the billing organization.

Physicians 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. 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.

Solo practitioners who bill Medicare will receive a payment under the TIN used to bill Medicare.

It is important to note, particularly as many hospitals are struggling to remain financially viable, that providers who ceased operations as a result of the COVID-19 pandemic are still eligible to receive funds so long as the provider provided diagnoses, testing or care for individuals with possible or actual cases of COVID-19. “Care” does not have to be specific to treating COVID-19. HHS stated that it broadly views every patient as a possible case of COVID-19.

How Payment Distributions Are Determined

Providers will be distributed a portion of the $30 billion based on their share of total Medicare FFS reimbursements in 2019. Total FFS payments were approximately $484 billion in 2019. According to HHS, providers can access their 2019 Medicare FFS billings from their organization’s revenue management system.

Providers can estimate their payment using the following steps:

  • Step 1: Divide 2019 Medicare FFS (excluding Medicare Advantage) payments they received by $484 billion.
  • Step 2: Multiply that ratio by $30 billion.

For example, a community hospital that billed Medicare FFS $121 million in 2019 would receive $7.5 million: ($121 million/$484 billion) x $30 billion = $7.5 million.

How Providers Will Receive Payment Distributions

HHS has partnered with UnitedHealth Group (UHG) to facilitate the initial $30 billion disbursement. UHG is expected to donate all fees for the administration of the CARES Act provider relief fund.

HHS stated that providers will receive payment via Automated Clearing House account information currently on file with UHG or the Centers for Medicare and Medicaid Services (CMS).

The automatic payments will come to providers via Optum Bank with “HHSPAYMENT” as the payment description.

Additionally, providers who normally receive a paper check for reimbursement from CMS will receive a paper check in the mail for the immediate distributions within the next few weeks.

What Providers Must Do After Receiving Payment

Within 30 days of receiving the initial payment, providers must sign an attestation confirming receipt of the funds. The attestation also confirms the provider’s agreement to the terms and conditions of payment. If a provider receives payment and does not wish to comply with the terms and conditions, the provider must (1) contact HHS within 30 days of receipt of payment and then (2) remit the full payment to HHS as instructed.

Failure to return payment within 30 days will be viewed as acceptance of the terms and conditions.

Providers can access HHS’ online portal for signing the attestation.

Terms and Conditions of Payment

In order to receive the funds, providers “must agree not to seek collection of out-of-pocket payments 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.

According to HHS’ Relief Fund Payment Terms and Conditions, to receive its payment, the provider must certify that it billed Medicare in 2019, currently provides testing or care for actual or possible cases of COVID-19, is not currently terminated or excluded from participation in Medicare, Medicaid and other federal healthcare programs and does not currently have Medicare billing privileges revoked.

Furthermore, as a condition of payment, the provider must certify that the payment will only be used for responding to COVID-19 and the provider will not use the payment to reimburse expenses or losses that have been reimbursed from other sources or that other sources are obligated to reimburse.

A special quarterly reporting requirement applies for providers receiving more than $150,000 total in federal funds for COVID-19 response. Not later than 10 days after the end of each calendar quarter, recipients receiving more than $150,000 total in funds under the CARES Act, the Coronavirus Preparedness and Response Supplemental Appropriations Act, the Families First Coronavirus Response Act or any other act making appropriations related to COVID-19 response, must submit a report to HHS. The report must include various information and data, including a detailed list of all projects or activities for which large covered funds were expended or obligated.


Providers should ensure they receive their fair share of the distribution by taking an accounting of 2019 Medicare FFS billing. Providers and facilities with multiple Tax Identification Numbers should conduct this accounting for each TIN. Additionally, any providers that receive more than $150,000 total in federal funding through COVID-19 relief appropriations should ensure compliance with HHS’ terms and conditions and the quarterly reporting requirements. These providers should continually document the allocation of CARES Act funds among the provider’s projects and activities. It is important for providers to act quickly to receive the funds and to make sure they comply with all applicable terms and conditions so that they can keep the funds. Prepare now for an audit later.

About Duane Morris

Duane Morris has created a COVID-19 Strategy Team to help organizations plan, respond to and address this fast-moving situation. Contact your Duane Morris attorney for more information. Prior Alerts on the topic are available on the team’s webpage.

For More Information

If you have any questions about this Alert, please contact Delphine O'Rourke, Kevin Moran, any member of the COVID-19 Strategy Team or the attorney in the firm with whom you are regularly in contact.

Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.