Healthcare Providers and Understanding the CARES Act
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At Lucas | Compton we’ve been actively working to help healthcare providers understand the new CARES Act language and regulatory rules that are being promulgated. Please find critical answers below to commonly asked and important questions below.
Please contact us if you need assistance.
What is the $100 Billion “Public Health and Social Services Emergency Fund”?
The real money to draw down on if you are a healthcare provider is the $100 billion fund run through the already existing Public Health and Social Services Emergency Fund (PHSSEF).
This fund will cover non-reimbursable expenses attributable to Covid-19.
All health care entities can get money through the PHSSEF.
What is the process and criteria for hospitals, health systems and health care providers to receive the PHSSEF funding?
HHS will review applications from healthcare providers and make payments on a rolling basis as qualified applications are received, in order to get money into the health system as quickly as possible. Healthcare providers don’t have to get the money through the traditional competitive grant process.
HHS is expected to release guidance on the application process soon.
What expenses qualify for funding?
All non-reimbursable expenses attributable to Covid-19 qualify for funding. Examples include: building or retrofitting new ICUs, increased staffing or training, personal protective equipment, the building of temporary structures and more. Any expenses reimbursed or obligated to be reimbursed by insurance or other mechanisms are not eligible.
“Forgone revenue” from cancelled procedures is also a qualified expense.
Can healthcare entities access funds under the PHSSEF fund if they are also eligible for funding for another government funding program?
Yes, they can — they can tap into many government funding sources at the same time. The CARES Act states that the funds may not be used for expenses or losses that have been reimbursed from other sources or that other sources are obligated to reimburse. Even if qualified expenses are eligible for reimbursement from another mechanism, an entity may still apply for funding from the PHSSEF fund while simultaneously applying for funding from other sources. If the entity subsequently receive reimbursement for expenses from any other source after receiving funding for the same expenses from the PHSSEF fund, the entity will be required to re-pay the funding it received from the PHSSEF fund.
What is the process for healthcare providers to draw down funding under the 7(a) SBA Paycheck Protection Program?
Small businesses and 501(c)(3) non-profit organizations, including hospitals, health systems, and health care providers, are eligible to apply for the Small Business Administration’s Paycheck Protection Program.
Through this program, small businesses and 501(c)(3) non-profit organizations, including hospitals, health systems, and health care providers can apply to an SBA-approved lender for a loan of up to 250% of your average monthly payroll costs to cover eight weeks of payroll as well as help with other expenses like rent, mortgage payments, and utilities.
This loan can be forgiven based on maintaining employee and salary levels. For any portion of the loan that is not forgiven, the terms include a maximum term of 10 years, a maximum interest rate of 4 percent.
Small businesses and 501(c)(3) non-profit organizations, including hospitals, health systems, and health care providers will be able to apply if they were harmed by COVID-19 between February 15, 2020 and June 30, 2020.
To be eligible, small businesses and 501(c)(3) non-profit organizations must have fewer than 500 employees, or more if SBA’s size standards for the non-profit allows.
This program is retroactive to February 15, 2020, in order to help bring workers who may have already been laid off back onto payrolls.
Loans are available through June 30, 2020.
Funding for community health centers?
Community health centers were given access to $100 million in the first coronavirus response bill.
In the CARES Act, they were given $1.32 billion to tap into.
They can also tap in the $100 billion PHSEFF fund.
They can also tap into a new CARES Act feature that provides a Medicare payment to community health centers for telehealth services provided to Medicare beneficiaries, including in the beneficiaries’ homes to avoid potential exposure to COVID-19, during the COVID-19 public health emergency. Medicare would be required to pay the FQHC or RHC at rates similar to those for telehealth services provided from a doctor’s office. Costs associated with those telehealth services would not affect the prospective payment system for FQHCs or the all-inclusive rates for RHCs.
Funding for hospitals to offset hospitals having to cancel all of those elective services?
Acute care hospitals, critical access hospitals (CAHs), children’s hospitals, and prospective payment system-exempt cancer hospitals (PCHs) can now request accelerated Medicare payments for inpatient hospital services.
Rather than waiting until claims have been processed to issue payment, Medicare will work with qualified and interested hospitals to estimate their upcoming payments and give that money to the hospital in advance.
Qualified facilities can request a lump sum or periodic payment reflecting up to six months of Medicare services.
Accelerated payments must be repaid to Medicare, however a qualifying hospital would not be required to start paying Medicare back for four months after receiving the first payment.
Hospitals would have at least 12 months to complete repayment without paying interest.
Hospitals interested in receiving accelerated payments should contact their Medicare Administrative Contractor (MAC).
What does the CARES Act do to help hospitals and inpatient rehabilitation hospitals (IRF) and long-term care hospitals (LTCH) in their attempts to help build bed capacity?
The CARES Act makes changes to both IRFs and LTCHs to provide hospitals with more flexibility when discharging patients in order to maximize bed capacity. It also opens up existing beds at IRFs and LTCHs to increase the availability of post-acute services.
Currently, in order to be admitted to an IRF, Medicare patients must be expected to participate in at least three hours of intensive rehabilitation at least five days per week (also known as the “three-hour rule”). The CARES Act waives this requirement so that IRFs have the ability to accept more patients who may otherwise be sent to other post-acute facilities, such as nursing homes. Patients who are admitted to LTCHs usually must meet certain clinical criteria for an LTCH to receive a higher Medicare payment. If less than half of an LTCH’s patients meet these criteria, they are no longer eligible to receive any LTCH payments. The CARES Act waives both of these policies for the duration of the PHE so that LTCHs may accept as many patients as necessary at their LTCH rate, without regard to the clinical criteria. By waiving these criteria, an LTCH will be able to take more patients from an acute care hospital and still get paid.
Does the CARES Act increase Medicare payments to hospitals?
The CARES Act increases Medicare reimbursement by 20 percent (specifically, the Act increases the weighting factor of DRGs for inpatients diagnosed with COVID-19 by 20 percent). This add-on payment for inpatient hospital services recognizes the increased costs incurred by providers and will be applied for the duration of the COVID-19 emergency.
Does the CARES Act lift the Medicare sequester on healthcare providers?
The CARES Act temporarily lifts the Medicare sequester, effectively adding an additional two percent for services provided from May 1 through December 31, 2020.
This will boost payments for hospital, physician, nursing home, home health, and other care.
Does the CARES Act give any additional flexibility for hospice providers?
Yes. A hospice physician or nurse practitioner must certify their eligibility. Typically, a recertification must be done in person. The CARES Act allows hospice physicians and nurse practitioners to conduct these visits via telehealth for the duration of the Public Health Emergency that was recently declared.