On September 1, 2020, the Department of Health and Human Services (“HHS”) announced that assisted living facilities (“ALFs”) may now apply for funds from the Public Health and Social Services Emergency Provider Relief Fund (the “CARES Act Provider Relief Fund”) under the Phase 2 General Distribution. HHS estimates that nearly one million older adults live in an estimated 28,000 assisted living facilities across the U.S. ALFs are also known as residential care facilities or boarding care in some states.
Purpose?
HHS intends for ALFs to use the funds to support ALFs suffering from significant expenses or lost revenue attributable to COVID-19. The funds are to be used to prevent, prepare for and respond to COVID-19, and that the funds shall reimburse the ALF only for health care-related expenses or lost revenues that are attributable to COVID-19.
Who Will Receive Funds?
HHS has developed a curated list of ALF Tax Identification Numbers (“TIN”) from third-party sources and HHS datasets. HHS developed the curated list of ALFs from state licensing boards/organizations and several ALF groups. ALFs with TINs on the curated list must meet other eligibility requirements including operating in good standing and not be excluded from receiving federal payments.
How Are the Amounts Determined?
Like other providers applying for Phase 2 funding, eligible ALFs will receive two percent of their annual revenue from patient care.
For ALFs, “patient care” means health care, services and supports, as provided in a medical setting, at home, or in the community to individuals who may currently have or be at risk for COVID-19, whereby HHS broadly views every patient as a possible case of COVID-19. ALFs that are applying for Phase 2 – General Distribution funds may include patient care revenue that supports residents’ nutritional, housing, activities of daily living and medical needs, including purchased services.
The application instructions indicate that “real estate revenues” should be excluded from revenues for patient care. HHS did confirm, however, in a CARES Act Provider Relief Fund FAQ that resident fees that cover accommodations can be considered patient service revenue. Many assisted living and memory care communities also offer independent living units within the same community and those independent living residents benefit from services and supports offered by the community. The revenue from independent living units as a part of larger assisted or skilled nursing facilities fits within the definition of “patient care” applying for the Phase 2 – General Distribution.
Are There Conditions Required to Accept the Funds?
Yes, consistent with other distributions from the Phase 2 – General Distributions of the Provider Relief Fund, ALFs will be required to attest that they will only use the funds for the permissible purposes described in a set of Terms and Conditions specific to these payments. The Terms and Conditions are similar to the Terms and Conditions created for other Relief Fund payments and include certain obligations and restrictions attached to the receipt of payments, including complying with future government audit and reporting requirements.
Timing to Apply?
ALFs have until September 13, 2020 to begin their application by entering their TIN for validation.
Five Actions to Take Now
- Apply for the funds by September 13, 2020.
- Review the HHS Terms and Conditions and sign and submit the attestation.
- Attestations must be submitted within 90 days of receipt of the payment.
- If the ALF receives a payment and retains that payment for at least 90 days without contacting HHS regarding the emittance of those funds, the ALF is deemed to have accepted the HHS Terms and Conditions.
- Review and create procedures for tracking the use of the funds and that funds were not used for prohibited purposes.
If you have questions or would like assistance with this topic, please contact:
- Sean Fahey at (317) 977-1472 or sfahey@wp.hallrender.com;
- Benjamin Fee at (720) 282-2030 or bfee@wp.hallrender.com;
- Todd Selby at (317) 977-1440 or tselby@wp.hallrender.com;
- Brian Jent at (317) 977-1402 or bjent@wp.hallrender.com; or
- 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.
