Home Health & Hospice Week

Second-wave COVID-19 funding leaves home, hospice care all wet.

The unveiling of the second wave of CARES Act Provider Relief Fund payments may equal no help at best and reduced funding at worst, according to initial analysis.

On April 24, the Department of Health and Human Services began releasing $20 billion more in CARES Act Provider Relief Fund money to assist providers in combatting the pandemic. That’s on top of the $30 billion it automatically released last month (see Eli’s HCW, Vol. XXIX, No. 14).HHS will make weekly Relief Fund payments going forward until all funds are dispersed, it says.

But the move is unlikely to do home care agencies much good — and might even do them harm.

Why? In the first wave, HHS distributed $30 billion based on a provider’s percentage of total Medicare fee-for-service reimbursement in 2019. To calculate that amount, HHS divided your 2019 FFS revenues by the total ($484 billion) and multiplied by the amount available ($30 billion).

In the second wave, HHS is distributing $20 billion more by taking all revenues into account, and by using revenues from 2018. It will divide your 2018 revenues from all sources by the total 2018 revenues ($2.5 trillion) and multiply that by the total amount available ($50 billion), according to a letter United Healthcare Group sent to providers. Then HHS will subtract what you’ve already received in the first wave from your second-wave payment.

In other words: “To calculate your estimated total allocation, divide your ‘Gross Receipts or Sales’ or ‘Program Service Revenue’ by 2.5 trillion and then multiply by 50 billion ((Gross Receipts or Sales)/ 2,500,000,000,000) * 50,000,000,000),’” HHS explains on the CARES Act Provider Relief Fund General Distribution Portal.“To estimate the amount likely to be received via this portal application, subtract the amount of payments already received from your total estimated total allocation above.”

The problem: The decision to change to all revenue sources is aimed at helping hospitals, particularly those serving largely non-Medicare populations such as children’s hospitals, secure adequate funding. But home health and particularly hospice agencies often have a large percentage of their revenues from Medicare.

That means HHAs and hospices are likely to have received as much — or even more — than they are entitled to under the second-wave formula in their first-wave payments based only on Medicare, explains Dave Macke with VonLehman & Co. in Fort Wright, Kentucky.

No joy: With the new all-revenue-source formula, “HHAs and hospices would get extra money only if their net revenues are in the neighborhood of three times their Medicare fee-for-service revues,” calculates National Association for Home Care & Hospice President William Dombi.“HHAs average 47 percent Medicare FFS revenues, which means the average HHA will not get any more from this distri­bution.Hospices are 90+ percent Medicare FFS, so nothing should be expected,” Dombi tells Eli.

No Provider Relief Funds Recouped Yet

While receiving no further funding from the $20 billion Provider Relief Fund pool is disappointing enough, it might get worse. If your first-wave payment is larger than the second-wave total, it is unclear what HHS plans to do — but so-called “clawbacks” are a real possibility.

Under a clawback, HHS would take back the portion of money that is higher than the all-revenue-source calculation.“If they do a clawback, hospices are particularly vulnerable,” Macke warns.

“We are still waiting for clarification,” Dombi says. But it’s a good sign that “we have not seen any provider asked to give money back. As such, the formula may be used just to add monies for providers, but not reduce what they already received.”

But that promising signal is no guarantee.“What’s going to happen?” Macke asks.“Nobody knows.”

In the meantime: Providers should “be careful in using the April 10 [first-wave] distribution and understand that not only is the pending clarifi­cation important, but that they must report to HHS cost and lost revenue information to account for the entitlement to the amount received,” Dombi advises.“Not all providers should feel confident that they can justify all they received, although most should be able to do so.”

And “stay tuned” for an HHS clarification, Macke counsels.“It might change tomorrow.”

Note: See HHS’ nine-page frequently asked question set on Provider Relief Fund payments at www.hhs.gov/sites/default/files/20200425-general-distribution-portal-faqs.pdf.