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Hospital and Health Care Provider Reimbursement under the CARES Act

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The Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act") adds $100 billion to the Public Health and Social Services Emergency Fund to reimburse hospitals and health care providers for expenses and lost revenue related to the COVID-19 pandemic. A portion of the funds will be used to reimburse COVID-19 care for uninsured patients.

 

$100 Billion for Hospitals and Health Care Providers

The CARES Act appropriates $100 billion to the Public Health and Social Services Emergency Fund to prevent, prepare for and respond to the COVID-19 pandemic by reimbursing hospitals and health care providers for necessary health care expenses or revenue losses attributable to COVID-19. The CARES Act provides broad authority to the Secretary of the US Department of Health and Human Services (the "Secretary") to administer and distribute the funds.  On April 3, 2020, the Secretary announced that a portion of the funding will be used to cover health care providers' costs of delivering COVID-19 care for the uninsured. The Secretary has yet to publish guidance with respect to how remaining funds will be allocated and other requirements for reimbursement.

Eligible Health Care Providers

The funds are available to "eligible health care providers," defined as public entities, Medicare or Medicaid enrolled suppliers and providers, and such other for-profit entities and not-for-profit entities as the Secretary may specify. Only eligible health care providers located within the United States (including territories) that provide diagnoses, testing or care for individuals with possible or actual COVID-19 cases are eligible for reimbursement.

Eligible Reimbursements

Eligible health care providers can seek reimbursement only for "health care related expenses or lost revenues that are attributable to coronavirus." The CARES Act specifically provides that funds are to be available for:

  • building or construction of temporary structures; 
  • leasing of properties; 
  • medical supplies and equipment including personal protective equipment and testing supplies; 
  • increased workforce and trainings;
  • emergency operation centers; 
  • retrofitting facilities; and 
  • surge capacity.

Eligible health care providers may not receive reimbursement for expenses or revenue losses that have already been, or are otherwise required to be, reimbursed from other sources.

The CARES Act does not provide any specifics as to what documentation or other requirements are required for eligible health care providers to demonstrate its coronavirus connection and obtain the funds. The Secretary has broad discretion to determine what qualifies as reimbursable expenditures and the method and timing for dispersal of the funds (e.g., pre-payment, prospective payment or retrospective payment), subject to the requirement that the "most efficient payment systems practicable to provide emergency payment" are utilized.

On April 3, 2020, the Secretary announced that a portion of the $100 billion funding will be used to reimburse eligible health care providers for costs related to delivering COVID-19 care to uninsured patients. According to the Secretary's statement, eligible health care providers will be reimbursed at Medicare rates and will receive payments through the same mechanism used for reimbursement of COVID-19 diagnostic testing. In addition, as a condition to receiving funds under the program, health care providers will be forbidden from balance billing uninsured COVID-19 patients for the cost of care. The Secretary also stated that specifics on how remaining funds will be disbursed to providers will be available soon.

How to Access Funding

Eligible health care providers must submit an application, including a justification for receiving funding and a valid tax identification number, to receive funds. The CARES Act provides the Secretary broad discretion to review applications and make payments on a rolling basis. The application form is not yet available and the Secretary has not yet provided guidance with respect to documentation necessary to demonstrate attribution to COVID-19 and additional eligibility requirements. Eligible health care providers that receive funds will also be required to submit reports and maintain documentation, as deemed necessary by the Secretary, to certify compliance with any payment conditions.  
 

1 See Title VIII, Division B of the CARES Act.

 

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