May 1, 2020

CARES Act Provides Immediate Relief to Healthcare Providers Battling COVID-19

Written By

Kevin A. Imhof
Associate, Stoll Keenon Ogden PLLC

May 1, 2020

A summary of financial relief offered to healthcare providers in response to COVID-19

Eric M. Weihe
Member, Stoll Keenon Ogden, PLLC
(502) 568-5704


Kevin A. Imhof
Attorney, Stoll Keenon Ogden PLLC
(502) 599-8729

On March 27, 2020, Congress allocated $100 billion in relief funding specifically for healthcare facilities and healthcare providers (“Providers”) battling COVID-19 as part of the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act. This funding was intended to support Providers with healthcare-related expenses or lost revenue attributable to COVID-19 and ensure that all uninsured Americans receive testing and treatment for COVID-19. The funding is targeted to address COVID-19’s economic impact across the healthcare system due to the stoppage of elective procedures and added expenses for caring for COVID-19 patients.

$50 Billion Provider Relief Fund – General Allocation

The Provider Relief Fund allocated $50 billion for the general distribution to Providers impacted by COVID-19. To be eligible to receive a payment from the Provider Relief Fund, a Provider must have billed Medicare in 2019.

Initial $30 Billion

An initial $30 billion of the $50 billion allocated for general distribution was fast-tracked by the Department of Health and Human Services (“HHS”) to ensure that Providers received funding as quickly as possible.

On Friday, April 10, 2020, HHS delivered via direct-deposit $26 billion to qualifying Providers impacted by COVID-19. On April 17, 2020, HHS announced that the remaining $4 billion of the expedited $30 billion was delivered. This initial infusion of $30 billion was distributed proportionate to a recipient’s share of Medicare Fee-For-Service reimbursements in 2019. The HHS selected this formula to ensure that funding was delivered as quickly as possible.

Additional $20 Billion

On April 24, 2020, the HHS announced the release of the remaining $20 billion of the $50 billion allocated by the Provider Relief Fund for general distribution. This second wave of funding was delivered to Providers based off revenue data submitted via the Centers for Medicare and Medicaid (“CMS”) cost reports. The remaining $20 billion will supplement the initial $30 billion in a manner that is proportional to a recipient’s share of 2018 net patient revenue. Providers without adequate cost report data on file can submit their revenue information to the CARES Provider Relief Portal. Starting April 24, 2020, the funds from the remaining $20 billion will be delivered to Providers weekly on a rolling-basis.

Terms and Conditions

A Provider who receives a payment from the $50 billion appropriated for general distribution must comply with a number of terms and conditions. Recipients of payments distributed under the initial $30 billion[1] and under the additional $20 billion[2] have separate terms and conditions. For purposes of this summary, we have listed terms and conditions that are common to both sets of terms and conditions. Non-compliance with any of the terms and conditions is grounds for the HHS to recoup some or all of any payment distributed from the Provider Relief Fund. The following are terms and conditions included in both the terms and conditions for relief fund payment from the initial $30 billion and additional $20 billion general distribution:

• A recipient must certify that it billed Medicare in 2019.

• A recipient must be currently providing diagnoses, testing, or care for individuals with possible or actual cases of COVID-19; must not be currently terminated from participation in Medicare or currently excluded from participation in Medicare, Medicaid, and other federal healthcare programs; and, must not have Medicare billing privileges revoked.

• A recipient must certify that the funds will only be used to prevent, prepare for, and respond to COVID-19, and the recipient shall be reimbursed only for healthcare related expenses or lost revenues that are attributable to COVID-19.

• A recipient 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.

• A recipient is required to submit reports to the HHS Secretary to ensure compliance with the above outlined terms of conditions imposed on the funds. Recipients receiving more than $150,000 must submit a report within ten (10) days of the end of each quarter detailing certain information on use of the funds.

• A recipient must sign an attestation confirming the receipt of the funds and assenting to HHS’s additional terms and conditions for their use within thirty (30) days of the receipt of initial funds.
Targeted Allocations

The Executive Branch has earmarked a portion of the remaining $50 billion in CARES Act for target allocations. The following is a non-exhaustive list of targeted allocations selected by the administration as of the time of this publication:

Allocation for COVID-19 high impact areas ($10 Billion) — $10 billion has been allocated for Providers in areas that have been particularly devastated by the COVID-19 pandemic. For example, Providers in New York, which have served a high-volume of patients, are expected to receive a large share of this funding. Hospitals and other Providers can still apply for these funds by submitting the following information to the HHS: (1) Tax Identification Number; (2) National Provider Identifier; (3) Total Number of Intensive Care Unit beds as of April 10, 2020; and (4) Total number of admissions with a positive diagnosis for COVID-19 from January 1, 2020 to April 10, 2020. The submission deadline was 3:00 PM ET, Saturday, April 25, 2020.

Allocation for Rural Providers ($10 Billion) — $10 billion has been allocated for rural Providers, most of which operate on small margins and are less profitable than Providers located in major metropolitan cities. HHS states that this money will be distributed based on operating expenses, distributing payments proportionately to Providers.

Allocation for Indian Health Services ($400 million) — $400 million has been allocated for Indian Health Service Providers based on operating expenses.
CMS Expands Accelerated and Advance Payment Program

The funding allocated and provided to healthcare facilities and healthcare providers by the CARES Act is separate from the funding provided to medical providers and suppliers by CMS’ Accelerated and Advance Payment Program. The CMS Accelerated and Advance Payment Program has also delivered billions of dollars to medical providers and suppliers to combat COVID-19. In order to increase cash flow to medical providers and suppliers, CMS has expanded the Accelerated and Advance Payment Program to include a broader group of Medicare Part A providers and part B suppliers. The expansion of the program will only last for the duration of the public health emergency caused by the COVID-19 pandemic. The CMS Accelerated and Advance Payments are loans that medical providers and suppliers must pay back.

To be eligible for payments, a medical provider or supplier must have billed Medicare for claims within 180 days immediately prior to the date of signature on the medical provider or supplier’s request form; not be in bankruptcy; not be under active medical review or program integrity investigation; and, not have any outstanding delinquent Medicare overpayments. Qualified providers or suppliers will be able to request up to 100 percent of the Medicare payment amount for a three-month period. Inpatient acute hospitals, children’s hospitals, and certain cancer hospitals are able to request up to 100 percent of the Medicare payment amount for a six-month period. Critical access hospitals can request up to 135 percent of their payment amount for a six-month period. Repayment of the accelerated/advance payments received by a medical provider or supplier will begin after 120 days from receipt of the accelerated/advance payments and will automatically be by offset from new claims with the accelerated/advance payments balance to be reduced by the new claim amount. The time for repayment is between 210 days and one year, depending on the type of medical provider or supplier.


Stoll Keenon Ogden understands that these are trying times for our clients and our Commonwealth. Our firm operations have continued uninterrupted and our attorneys are equipped to serve as we always have – for over 120 years.

Members of our firm’s Tort, Trial and Insurance Services practice group will be glad to discuss the CARES Act relief funding, the effects of the COVID-19 pandemic on your operations, or any other important matters.

Please also be sure to check out the Stoll Keenon Ogden Coronavirus Resource webpage for additional articles and information related to the latest information on new laws and directives enacted by federal, state, and local governments in response to the Coronavirus pandemic.

[1] Terms and Conditions for Relief Fund Payment from $30 Billion General Distribution

[2] Terms and Conditions for Relief Fund Payment from $20 Billion General Distribution

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