Eligible Health Care Providers Must Take Action by June 3rd
The CARES Act and the Paycheck Protection Program and Health Care Enhancement Act allocated $175 billion in relief funding to hospitals and other health care providers in response to COVID-19. Every health care provider that received relief funding must take action by Wednesday, June 3rd and sign the CARES Act Provider Relief Fund attestation agreeing to the CARES Act terms and conditions. The terms and conditions are available here and differ depending upon the payment received. Multiple attestations may be required. Not returning the relief payment within 90 days of receipt will be viewed as acceptance of the terms and conditions.
In addition to attesting to the terms and conditions, if a provider received relief funds automatically before 5pm on April 24th, the provider must provide HHS with an accounting of its annual revenues by submitting tax forms or financial statements through the Financial Data portal. The submission of this information serves as an application for additional funding for those providers who have not already received an additional General Distribution payment. If a provider does not submit financial information by June 3rd, it will not be eligible for additional funding from the $50 billion General Distribution.
Providers should continue to monitor the CARES Act Provider Relief Fund website for developments, as HHS continues to modify and issue guidance on CARES Act attestation requirements.
Prior to signing the attestation, providers should assess how they have spent the relief funds and ensure that they are in compliance with the terms and conditions. For example, among other things, the terms and conditions require that the relief funds only be used to prevent, prepare for, and respond to COVID-19, and to reimburse the provider for health care related expenses or lost revenues that are attributable to COVID-19, but that have not been reimbursed from other sources. Furthermore, the relief funds cannot be used to pay an individual’s salary if it is greater than $197,300, exclusive of fringe benefits and indirect costs.
A provider must be able to demonstrate that its lost revenues and increased expenses attributable to COVID-19, excluding expenses and losses that have been reimbursed from other sources, exceed the total amount of relief funds it received. If not, the provider must determine if the relief funds must be returned. Overpaid providers must reject and refund the entire relief fund payment and submit revenue documents to facilitate payment of the correct amount. Likewise, if funds are received in error (e.g., the organization that received funding was sold), a provider must reject and return the entire amount it received. A provider cannot return a portion of the relief funds it received.
Providers may face significant liability if they fail to comply with the terms and conditions or fail to return overpaid funds. HHS announced that it will undertake “significant” anti-fraud monitoring and that the Office of Inspector General will oversee the use of the CARES Act funding to ensure federal dollars are used appropriately. If a provider accepts the relief funds in violation of the terms and conditions, this could be deemed a false claim under the Federal False Claims Act, which imposes severe penalties, including treble damages and fines. Many prosecutions under the Federal False Claims Act result from employee whistleblowers, who may receive a substantial share of the payment recovery.
You can learn more about the relief fund terms and conditions in Honigman’s COVID-19: Beyond the Headlines alert.
For questions, please contact your relationship attorney at Honigman.