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Home Health & Hospice Week

Finance:

Watch Out For Hidden Strings In 'No Strings Attached' Relief

Published on Fri Apr 17, 2020

Recording and reporting requirements under CARES Act money are significant.

The feds’ quick action to relieve health care providers’ financial pressures in the face of COVID-19 is greatly appreciated — but beware of some of the hidden pitfalls.

Newest program: After launching the Coronavirus Aid, Relief, and Economic Security (CARES) Act Paycheck Protection Program (PPP) administered by the Small Business Adminis­tration and Medicare’s expanded Accelerated Payment program earlier this month, the Trump administration surprised many in the industry by depositing billions in health care providers’ bank accounts without them even asking — and without expectation of the funds being repaid.

Under the CARES Act Provider Relief fund, the Department of Health and Human Services began delivering an “initial $30 billion in immediate relief funds” on Fri.April 10.“These are payments, not loans, to healthcare providers, and will not need to be repaid,” HHS emphasized in a release that day.

While the CARES Act had earmarked $100 million for provider relief payments, CMS’ distri­bution of money to providers without even requiring a request came out of the blue, many observers say. In President Trump’s April 7 Coronavirus Task Force press briefing, Centers for Medicare & Medicaid Services Administrator Seema Verma said that “this week, we will be putting out another $30 billion, which are grants.” CMS was focused on “getting these dollars out as quickly as possible,” she said.

The payments are “very, very welcome” by providers pressured by increased COVID-19 costs ranging from personal protective equipment to staffing to shorter lengths of stay, notes Judi Lund Person with the National Hospice & Palliative Care Organization.(For an overview of how payments are calculated and dispersed, see story, p. 105.)

The payments “are no strings attached,” Verma explained in the briefing.“So the healthcare providers that are receiving these dollars can essentially spend that in any way that they see fit.”

But the fine print that comes with the payments doesn’t exactly support that statement, industry experts point out.

“Providers will not be required to repay the funding provided,” acknowledges consulting from The Health Group in Morgantown, West Virginia. But they will be required to accept the payment’s terms and conditions.

“Within 30 days of receiving the payment, providers must sign an attestation confirming receipt of the funds and agreeing to the terms and conditions of payment,” HHS explains in a fact sheet about the relief fund program. It’s those terms and conditions that may trip up providers — and cause repayment of the relief funding.

No-strings-attached payments that don’t have to be repaid “sounds sweet,” enthuses finance expert Dave Macke with VonLehman & Co. in Fort Wright, Kentucky. But the reality is, there are strings in the terms and conditions, Macke warns.“It isn’t a slam dunk,” he stresses.

Problem #1: The program requires you to certify that you “currently provide diagnoses, testing, or care for individuals with possible or actual cases of COVID-19,” according to the 10-page terms and condition sheet.

That may not be the case for every home health and hospice agency that received automatic relief fund payments, Macke points out.

Problem #2: The program also requires you to certify “that the Payment will only be used to prevent, prepare for, and respond to coronavirus, and shall reimburse the Recipient only for health care related expenses or lost revenues that are attrib­utable to coronavirus,” the fact sheet says. Providers receiving $150,000 or more under the program must submit reports to the Department of Health and Human Services “to ensure compliance with conditions that are imposed on this Payment,” the sheet continues.“Such reports shall be in such form, with such content, as specified by [HHS] in future program instructions directed to all Recipients.”

The reports must contain a laundry list of items, including “a detailed list of all projects or activities for which large covered funds were expended or obligated” and “the estimated number of jobs created or retained by the project or activity,” the sheet says.

“The Recipient shall maintain appropriate records and cost documentation … and other information required by future program instructions to substantiate the reimbursement of costs under this award,” the HHS sheet adds.

The reporting requirement is giving providers pause.“There are unanswered questions with how best to track the spending of the money in a way that would satisfy the government’s tracking and reporting requirements,” notes reimbursement expert M. Aaron Little with BKD in Springfield, Missouri.

“There are definitely strings attached,” Macke judges.

Agencies that saw the funds show up in their accounts overnight aren’t clear on the concept, fears Tom Boyd with Simione Healthcare Consultants in Rohnert Park, California.“Most assume it is free money,” Boyd says.“I have been pointing out the eligibility requirements.”

Problem #3: There may be issues for agencies that receive funds from both the CARES Act Paycheck Protection Program (PPP) administered by the Small Business Administration and the relief fund.“The Recipient certifies that it 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,” the sheet specifies.

There are “questions about how this interplays with other relief options such as those offered through the SBA,” Little notes.

Problem #4: Audits are likely on the horizon for those providers receiving more than $150,000 from the relief fund, Boyd predicts. The sheet specifies that the “Recipient agrees to fully cooperate in all audits the [HHS] Secretary, Inspector General, or Pandemic Response Accountability Committee conducts to ensure compliance with these Terms and Conditions.”

“What a mess,” Boyd remarks.

Note: More details, including a link to the terms and conditions, are at www.hhs.gov/provider-relief/index.html.

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