UPDATE: CARES Act Provider Relief Fund

On April 16, 2020, HHS announced how it will distribute an initial $30 billion round of funding to providers, part of a $100 billion fund Congress included in the recently-passed CARES Act. This announcement will be followed by additional funding announcements in coming weeks.

What It Means

Congress passed the bipartisan CARES Act a few weeks ago, with the President signing the bill into law on March 27. The bill included significant pots of money intended to address the health and economic impact of the COVID-19 pandemic on the country.

Specific to the health care provider community, Congress included a Public Health and Social Services emergency fund that set aside $100 billion to address the costs of the COVID-19 pandemic.

Earlier this week, CMS Administrator Seema Verma announced at a White House press conference that HHS would be making an initial round of $30 billion in funding available this week. The details of that round of funding was announced this morning.

Key details:

  • Grants, not loans – the funding released today will not need to be repaid, unlike the advance claims payment CMS announced March 28
  • Not just hospitals – if you received a Medicare FFS claim in 2019, you’re on the eligibility list.
  • Amounts – shares of the $30 billion are going to be awarded based on the recipient’s share of the $484 billion in claims CMS paid out in 2019.
    • In other words – determine how much you totally billed Medicare fee for service in 2019; find out what percentage of the total $484 billion that is; and apply that percentage to $30 billion
  • Automatic payments – HHS is partnering with United Health Group to get the funds out the door. Looks like UHG/Optum is just going to start sending payments with no application necessary.

Please do read the fine print below. There are some conditions.

This methodology isn’t going to make everyone happy. For example, basing the payments entirely on Medicare claims doesn’t recognize any of the challenges providers with high Medicaid patients have faced.

Administrator Verma acknowledged this challenge even in the initial announcement earlier this weekHHS is pledging to make adjustments in the second tranche of funding.

“HHS and the Administration are working rapidly on additional targeted distributions to providers that will focus on providers in areas particularly impacted by the COVID-19 outbreak, rural providers, and providers of services with lower shares of Medicare FFS reimbursement or who predominantly serve the Medicaid population. This supplemental funding will also be used to reimburse providers for COVID-19 care for uninsured Americans.”

What It Means for You

If you’re a provider who has billed Medicare FFS – this announcement is a big deal. HHS is sending checks out the door with a limited number of strings attached.

What’s Next

The next set of funding will arguably be more complicated to get out. In today’s announcement, HHS used a relatively simple formula, but dodged some complex challenges – like addressing disparate impact on high Medicaid providers, those dealing with the uninsured, and other issues.

Look for additional guidance from HHS in the coming weeks on the second round of funding – and possibly more.


Details on the first announcement (also below)

Press Release

Update: CARES Act Provider Relief Fund

Relief Fund Payment Terms & Conditions