The CARES Act Earmarks $100 Billion for Eligible Health Care Providers

Last updated April 1, 2020

The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) includes an emergency appropriation of $100 billion to the Public Health and Social Services Emergency Fund. That amount is earmarked to reimburse, through grants or other mechanisms, “eligible health care providers” for health care related expenses or lost revenues attributable to COVID-19.

“Eligible health care providers” include public entities, Medicare or Medicaid enrolled suppliers and providers, “and such for-profit entities and not-for-profit entities not otherwise described” as the Secretary of Health and Human Services may specify, that provide diagnoses, testing, or care for individuals with possible or actual cases of COVID–19. It is possible that eligible health care providers could include everything from hospitals to physician’s offices to nursing facilities to clinics.

Funds will be available for the following types of health care related expenses: building or construction of temporary structures, leasing of properties, medical supplies and equipment including personal protective equipment (PPE) and testing supplies, increased workforce and trainings, emergency operation centers, retrofitting facilities, and surge capacity.

Funds will also be available for “lost revenues”. The term “lost revenues” is not defined in the Act. Presumably, it will include lost revenues due to cancelled appointments and procedures as a result of quarantine measures and lost revenues due to the need to direct all efforts to the care of COVID-19 patients.

It will undoubtedly be very important for eligible providers to maintain careful records of all information relating to expenses and lost revenues.

The Secretary of Health and Human Services will review applications and make “payments” on a rolling basis. Note that the term “payment” means a pre-payment, prospective payment, or retrospective payment, as determined appropriate by the Secretary, and the Act states that payments “shall be made in consideration of the most efficient payment systems practicable to provide emergency payment.” Thus, it is possible that some payments may be available in advance – prospectively – perhaps in the form of upfront grants based on projected costs or projected lost revenue, likely to be followed by post-payment/post-expense proof and reconciliation.

Health care providers applying for funding will be required to provide a statement justifying the need for payment under the program.

The application process has not opened yet and additional guidance is expected from the U.S. Department of Health and Human Services.

If you have any questions about this program, please reach out to your CSG attorney.

For additional information pertaining to the coronavirus outbreak, please visit CSG’s COVID-19 Resource Center.

This publication contains general information on recent legal developments and is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. Attorney Advertising. Prior results do not guarantee a similar outcome.

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