MSL ALERT: CARES Act Relief Funds

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It is important to note that the rules and regulations are being issued at an incredible pace. However, since 1974 we have been the trusted advisor for health care providers. Please have a look at the section below, “How can MSL assist” for more information.

CARES Act Relief Funds

Medicare providers received the first round of immediate relief starting last Friday. This $30 billion in funds were part of the $100 billion in relief funds to assist healthcare providers in their coronavirus response. The intention is to support providers incurring healthcare-related expenses or lost revenue attributable to COVID-19.  

Who was eligible?

  • All facilities and providers that received Medicare fee-for-service (FFS) reimbursements in 2019 are eligible for this initial rapid distribution. (Note that Medicaid or reimbursement through Medicare advantage plan was not included in this round of relief.)

  • As a condition to receiving these funds, providers 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.

  • This quick dispersal of funds will provide relief to both providers in areas heavily impacted by the COVID-19 pandemic and those providers who are struggling to keep their doors open due to healthy patients delaying care and cancelling elective services.

How were payment distributions determined?

  • Providers received a portion of the initial $30 billion based on their share of total Medicare FFS reimbursements in 2019. Total FFS payments were approximately $484 billion in 2019.  

  • A provider can estimate their payment by dividing their 2019 Medicare FFS (not including Medicare Advantage) payments they received by $484,000,000,000, and multiply that ratio by $30,000,000,000. In more simple terms, providers should have received roughly 6.2% of their 2019 Medicare FFS reimbursements.

What should I do if I have not received these funds?

Contact DHHS at HOSPITALCOVID19@hhs.gov 

In the email include:

  • Company Name

  • Building Name

  • Certification Number (CCN) for the building (see an explanation of a CCN)

  • Billing tax identification number 

What should I do now?

  • 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. Click here to sign the attestation and accept the Terms and Conditions. Note that you can elect to not keep the funds and would be required to repay the amount received.

  • While the provided funds have been termed a payment and not a loan to healthcare providers, it is critical to read the applicable Terms and Conditions Terms and Conditions - PDF

  • Take steps now for proper accounting. Consider the following:

    • Record the payment in separate revenue account

    • Capture the specific expenses you are incurring that are COVID-19 related. There are numerous examples, but here are just a few:

      • Acquisition of PPE;

      • Additional staffing to screen employees and residents;

      • Cost to setup a separate COVID-19 unit;

      • Staff training; 

      • Costs incurred to retain staff, including overtime paid and meals provided for those employees assisting with COVID-19.

  • The guidance provided by HHS clearly stated “Care does not have to be specific to treating COVID-19. HHS broadly views every patient as a possible case of COVID-19." While specific guidance has not been provided, we recommend taking a holistic view of the expenses you have incurred.

What should the funds be used for?

  • The provider will certify that the funds are to be used to prevent, prepare for, and respond to coronavirus, and reimburse the provider only for health care related expenses or lost revenues that are attributable to coronavirus. 

  • The provider will also certify that it will not use the funds to reimburse expenses or losses that have been reimbursed from other sources or that other sources are obligated to reimburse. Remember that there are a number of programs (such as PPP) that you may have received funding from. As a result, it will be critical to track the expenses being incurred. (See below on how MSL can assist).

  • We expect additional guidance with regard to the use of these (and other coronavirus related) funds.  

How can MSL assist?

  • Providers will be need to properly segregate and account for the numerous expenses incurred in their effort of combatting the coronavirus

  • MSL can assist with establishing proper accounting procedures to capture how the relief funds were utilized and ensure that other relief funds are properly segregated.

  • MSL can assist with proper reporting when additional information is provided. Note that If you received more than $150,000 you have to report not later than 10 days after each calendar quarter a “Pandemic Response Accountability” report.

  • We can advise you on how to record and present these funds in your financial statements accordance with generally accepted accounting principles.

  • We can advise you on the most intelligent tax strategy for reporting these funds and other COVID 19 related tax strategies. 

Please contact us if you have any questions. 

For more COVID related resources, visit MSL COVID-19 Resources