News and Insights

Visit regularly for up-to-date information on relevant news, firm announcements and additions to our AZ Health Law Blog.

Written by James R. Taylor and Andres A. Sanchez

On Friday, April 24, 2020, the United States Department of Health & Human Services (“HHS”) announced the start of the remaining distributions from the $50 Billion General Distribution portion of the Provider Relief Fund.  HHS distributed the initial $30 Billion on April 10th and 17th to eligible Medicare providers. Unlike the initial distributions that were sent directly to eligible providers, the remaining $20 Billion will be distributed through an application process, with the goal of a final allocation of all General Distribution funds proportionate to a provider’s share of 2018 net patient revenue.

Although some providers that are subject to cost reporting may automatically receive a second distribution from HHS, most providers will need to apply for the additional funding through the General Distribution Portal, accessible at: https://covid19.linkhealth.com/docusign/#/step/1.  The application requires the provider to disclose the following financial information:

  • “Gross Receipt or Sales” or “Program Service Revenue” as submitted on the federal income tax return;
  • Estimated revenue losses in March 2020 and April 2020 due to COVID-19;
  • A copy of the provider’s most recently filed federal income tax return;
  • A listing of the TINs any of the provider’s subsidiary organizations that have received relief funds but which do not file separate tax returns.

Similar to the first distribution, recipients of a second distribution are required to agree to a set of Terms and Conditions.  While largely similar to the initial Terms and Conditions, the second batch contains the following additional requirements:

  • Recipient shall submit general revenue data for calendar year 2018; and
  • Recipient consents to HHS publicly disclosing the Recipient’s Relief Fund Payments.  Additionally, the “Recipient acknowledges that such disclosure may allow some third parties to estimate the Recipient’s gross receipts or sales, program service revenue, or other equivalent information.”

In its announcement, accessible at https://www.hhs.gov/coronavirus/cares-act-provider-relief-fund/index.html, HHS issued the following notice to providers:

“The Terms and Conditions also include other measures to help prevent fraud and misuse of the funds. All recipients will be required to submit documents sufficient to ensure that these funds were used for healthcare-related expenses or lost revenue attributable to coronavirus. There will be significant anti-fraud and auditing work done by HHS, including the work of the Office of the Inspector General.”

Andres Sanchez
Written by: Andres Sanchez

On April 22, 2020, Governor Ducey issued Executive Order 2020-32 removing current restrictions on conducting elective surgeries, starting on May 1, 2020.  Hospitals, healthcare facilities and providers (including dental surgery providers) may apply for an exemption to resume elective surgeries from the Arizona Department of Health Service (“ADHS”) if they demonstrate they have:

  1. A continuing supply of PPE that will support the hospital, healthcare facility or provider for more than 14 days and that is not reliant on the state or a county health department; and
  2. Adequate staffing and bed availability with no greater than 80% of total bed capacity occupied, if it is a hospital; and
  3. Implementation of  a robust COVID-19 testing plan to test all at-risk healthcare workers and each patient prior to the scheduling of an elective, non-essential surgery or during the pre-operative time period; and
  4. Implementation of a process to identify, inventory and document the availability of PPE, test collection kits, and the availability of a lab that can run the COVID-19 diagnostic test; and
  5. Implementation of a universal symptom screening process for all staff, patients, and visitors prior to entry into the facility; and
  6. Implementation of an enhanced cleaning process for patient and waiting areas; and
  7. Implementation of policies and procedures for appropriate discharge planning of patients, including pre-discharge diagnostic COVID-19 testing for patients transferring to a nursing care institution, residential care institution setting, or Group Home for the Developmentally Disabled; and
  8. Implementation of policies and procedures that prioritize elective, non-essential surgeries based upon urgency following the Centers for Medicaid and Medicare Services (CMS) Adult Elective Surgery and Procedures Recommendations.

ADHS will be implementing a process to request an exemption.  Exempt hospitals, facilities and providers are not eligible to request or receive PPE distributed by ADHS or county health departments.  The Governor’s Executive Order is available: here.

Andres Sanchez
Written by: Andres Sanchez

On April 10, 2020, the United States Department of Health & Human Services (“HHS”) commenced “Provider Relief Fund” distributions to Medicare providers (“Recipients”). The initial distributions totaled $30 Billion out of a total $100 Billion appropriated by the CARES Act for a Public Health and Social Services Emergency Fund.  The initial grant distributions went to each Recipient based on the Recipient’s share of the total Medicare fee-for-service reimbursements (excluding Medicare Advantage payments) in 2019.

Distributions are being direct deposited to eligible Recipients via Optum Bank. Within 30 days of receiving a payment, a Recipient is required to sign an attestation confirming that they have received the funds and agreeing to the Relief Fund Payment Terms and Conditions. The full text of the Term and Conditions is located here.

The Terms and Conditions impose the following requirements and restrictions:

  • The grant funds can only be used for the prevention, preparation and response to the coronavirus. A Recipient can only be reimbursed for healthcare related expenses or lost revenues attributable to the coronavirus.
  • The Recipient cannot use the grant funds to reimburse expenses or losses that are reimbursed from other sources, or that other sources are obliged to reimburse.
  • The Recipient is required to submit reports to ensure compliance with all Terms and Conditions. The form and requirements of the reports will be specified at a future time by the HHS Secretary.
  • Any Recipient that receives more than $150,000 total in funds from any act primarily making appropriations for the coronavirus response will also be required to submit a report to the HHS Secretary and the Pandemic Response Accountability Committee detailing, among other things, the total amount of funds received; a list of all projects or activities for which funds were expended, including the name, description, and the estimated number of jobs created or retained; as well as information on all sub-contracts or subgrants awarded by the recipient, its subcontractors or subgrantees.
  • All Recipients are required to keep records and cost documentations for the award, to be submitted at the request of the HHS Secretary, and to cooperate in all audits to ensure compliance with the Terms and Conditions.
  • A Recipient agrees that for all care for a possible or actual case of COVID-19, they will not seek to collect from patient’s out-of-pocket expenses greater than what the patient would have been required to pay if the care had been provided by an in-network recipient.
  • Additional restrictions include a ban on the use of funds for executive pay at a rate in excess of Executive Level II of the Federal Executive Pay Scale, funding gun control advocacy, lobbying, abortions, embryo research, promotion of the legalization of controlled substances, etc.

HHS has announced the remaining $70 Billion will be used for targeted distributions focusing on “providers in areas particularly impacted by the COVID-19 outbreak, rural providers, providers of services with lower shares of Medical reimbursement or who predominantly serve the Medicaid population, and providers requesting reimbursement for the treatment of uninsured Americans.”