The Public Health and Social Services Emergency Fund (“Relief Fund”) was originally appropriated $100 billion from the CARES Act to provide payment to hospitals and other health care entities for COVID‑19-related expenses and lost revenue. The Relief Fund later received an additional $75 billion appropriation through the Paycheck Protection Program and Health Care Enhancement Act, bringing the total of the relief package to $175 billion.
Over the last few months, HHS has been rolling out allocations of the Relief Fund, some of which applied to broad swaths of providers, while others were more targeted. HHS recently announced several new allocations bringing the total amount earmarked from the Relief Fund to approximately $112 billion (not including coverage for uninsured patients). Below we describe the amounts that have already been allocated as well as the more recently announced Relief Fund allocations.
Highlights and Key Takeaways
- So far HHS has allocated approximately $112 billion out of the total $175 billion Relief Fund, meaning that only about $63 billion dollars remains. However, HHS has indicated that an unspecified portion of the remaining amount will go toward the COVID Uninsured Program.
- This includes the announcements this week of a second $10 Billion Hotpot Allocation as well as a $15 billion Allocation for Medicaid/CHIP providers and a $10 billion Allocation for safety net hospitals.
- Providers that qualify for the Medicaid/CHIP Allocation must upload revenue and other information to an HHS portal by July 20.
- Safety Net Hospitals eligible providers were determined based on cost report data and there is no need for providers to apply for these funds.
Total Relief Fund Allocations to Date
To date, HHS has announced the following allocations:
- $50 billion General Allocation (this includes the $30 Billion First Tranche and the $20 Billion Second Tranche)
- $12 billion Allocation for “Hotspots” or High-Impact COVID-19 Areas
- $10 billion Allocation for Rural Health Clinics and Rural Hospitals
- $400 million Allocation for Indian Health Services
- $4.9 billion Allocation for Skilled Nursing Facilities
- A Second Hotspot Allocation of $10 billion (we discuss this allocation in more detail in a previous article available here)
- Approximately $15 billion Allocation for Medicaid/CHIP Providers (described below)
- $10 billion Allocation for Safety Net Hospital (described below)
This brings the total allocations to $112.3 billion. However, this does not account for amounts that may be used in the COVID Uninsured Program.
Allocation for Medicaid/CHIP Providers
On June 10, HHS re-launched the Payment Portal, and it will now allow Medicaid and CHIP providers who did not qualify for the initial $50 billion General Allocation funds to submit revenue information and qualify for Relief Funds (“Medicaid/CHIP Allocation”). The Medicaid/CHIP Allocation will total approximately $15 billion and the payment to each provider will be at least 2% of reported gross revenue from patient care, similar to the General Allocation.
HHS estimates that the initial rounds of the General Allocation provided payments to approximately 62% of all providers participating in state Medicaid and CHIP programs. The Medicaid/CHIP Allocation will make the Relief Fund monies available to the remaining 38%. Examples of these Medicaid/CHIP-only providers may include pediatricians, obstetrician-gynecologists, dentists, opioid treatment and behavioral health providers, assisted living facilities and other home and community-based services providers.
To be eligible for this Medicaid/CHIP Allocation, providers must meet the following:
- The provider must not have received payment from the $50 billion General Allocation;
- The provider must have billed Medicaid for health care services (directly or through a subsidiary) during the period of January 1, 2018, to December 31, 2019; and
- The provider must have provided patient care after January 31, 2020 and not permanently ceased providing patient care
It is important to note that providers that were eligible for the General Allocation and rejected payment would also not be eligible for this allocation.
In addition, in order to receive amounts from the Medicaid/CHIP Allocation, eligible providers must upload their most recent tax return and submit certain information through the Medicaid/CHIP Portal by July 20, including the following:
- The number of facilities operated by the provider and number of beds at those facilities as of May 31.
- FTE information for employees, including breakdown by personnel categories.
- The organization’s gross revenue from its most recent federal tax return (2017, 2018 or 2019). Note that the gross revenue calculation for the Medicaid/CHIP Allocation is different than the calculation for the General Allocation. Specifically, Medicaid/CHIP Allocation providers are required to subtract Returns/Allowances and Bad Debt from gross revenue, whereas providers eligible for the General Allocation did not need to subtract those items. Since HHS intends to calculate Medicaid/CHIP Allocation amounts based on 2% of gross revenues this means that Medicaid/CHIP Allocation providers will receive a smaller proportionate distribution than a provider that received funds under the General Allocation.
- Breakdown of gross revenue attributable to Medicare, Medicare Advantage, Medicaid/CHIP, commercial payors, self-pay and other sources by percentage. Note that by definition providers eligible for the Medicaid/CHIP Allocation should not be receiving Medicare payments because then they would have been eligible for the General Allocation.
- The provider’s lost revenues and increased expenses due to COVID-19 for March and April 2020.
- The total amounts received from the Paycheck Protection Program and FEMA by the applicant and its included subsidiaries as of May 31st.
Payments will then be made by HHS on a rolling basis, but HHS may request additional information as necessary to complete the process.
Allocation for Safety Net Hospitals
On June 9, 2020, HHS announced that it would distribute $10 billion from the Relief Fund to more than 700 safety net hospitals that support vulnerable patient populations (“Safety Net Allocation”). The criteria for hospitals eligible for the Safety Net Allocation:
- A Medicare Disproportionate Patient Percentage of 20.2% or greater;
- Average Uncompensated Care per bed of $25,000 or more. For example, a hospital with 100 beds would need to provide $2,500,000 in Uncompensated Care in a year to meet this requirement;
- Profitability of 3% or less, as reported to CMS in its most recently filed Cost Report. It is unclear how exactly HHS calculated profitability, but presumably it was based on information in the Worksheet G series from the cost report.
It does not appear that hospitals need to upload or submit any information at this point for this allocation. HHS has already determined which hospitals are eligible and the amounts of the distributions. Hospitals eligible for the Safety Net Allocation will receive a minimum distribution of $5 million and a maximum distribution of $50 million based on the hospital’s DPP and number of beds.
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If you have questions or would like additional information about this topic, please contact:
- David Snow at (303) 801-3536 or dsnow@wp.hallrender.com;
- Lori Wink at (414) 721-0456 or lwink@wp.hallrender.com;
- Joseph Krause at (414) 721-0906 or jkrause@wp.hallrender.com;
- Elizabeth Elias at (317) 977-1468 or eelias@wp.hallrender.com;
- Benjamin Fee at (720) 282-2030 or bfee@wp.hallrender.com; or
- Your regular Hall Render attorney.
Hall Render’s attorneys and professionals continue to maintain the most up-to-date information and resources, which are available at our COVID-19 Resource page, through our 24/7 COVID‑19 Hotline at (317) 429-3900 or by contacting your regular Hall Render attorney.
Hall Render blog posts and articles are intended for informational purposes only. For ethical reasons, Hall Render attorneys cannot—outside of an attorney-client relationship—answer specific questions that would be legal advice.
