The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) provides for billions of dollars in relief funds to healthcare providers responding to the coronavirus (COVID-19) pandemic. In April 2020, the U.S. Department of Health and Human Services (HHS) began distributing these funds. Unlike other aspects of the CARES Act, this money is not a loan and need not be repaid.
In general, healthcare providers who received reimbursement for Medicare fee-for-service (FFS) claims in 2019 are eligible for these funds, with the CARES Act payment allocations based on the share of Medicare FFS reimbursements in 2019.
According to various reports, money has been deposited into various healthcare providers' accounts with no notice. HHS has provided information about these funds on its website. The information includes that:
In the haste to get much-needed funds to the frontline providers who are giving so much to treat coronavirus patients in need, there may be a certain lack of clarity from the government of the obligations of those who have received deposits, particularly those who may not have received a "dear valued provider" letter from HHS referring to the website and the terms and conditions. Providers should be mindful that money received under the CARES Act is not a windfall from the government. In addition to the attestation and certification requirements regarding receipt and use of funds, providers currently involved in disputes with CMS – such as provider enrollment issues, billing and overpayment claims raised by CMS and fraud allegations – should carefully weigh the implications of receiving and retaining such funds.
CARES Act funding also has the potential to trigger enforcement actions under the False Claims Act (FCA). A violation of the FCA can occur when a provider receives a payment from the government and knowingly fails to report and return it within 60 days after the date on which the provider determines that the provider was not entitled to receive funds. Providers who have received funding from the government should carefully assess eligibility to maintain the funds.
Providers should also be aware that provider enrollment agreements signed by providers contain the following provisions that can also merit consideration:
If you have questions regarding the receipt of CARES Act funding, submission of an attestation statement or the implications regarding use of such funds if you have ongoing disputes with CMS, contact the authors or another member of Holland & Knight's Healthcare & Life Sciences Team. Holland & Knight's healthcare attorneys have in-depth experience to help you navigate these issues as well as other healthcare regulatory enforcement actions.
DISCLAIMER: Please note that the situation surrounding COVID-19 is evolving and that the subject matter discussed in these publications may change on a daily basis. Please contact your responsible Holland & Knight lawyer or the authors of this alert for timely advice.
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