Health Care Provider Relief Fund Offers Support but Raises Questions

As of July 15, hospitals and other health care providers have accepted more than $62 billion in federal payments through the Provider Relief Fund. This fund was created as part of the federal CARES Act to provide financial support for health care providers affected by the coronavirus pandemic. Many hospitals and other providers have received and accepted the funds with the expectation of more information about reporting and audit requirements.

The CARES Act allocated $100 billion for the Provider Relief Fund, and $75 billion was added later under the revised Paycheck Protection Program and Health Care Enhancement Act. Health and Human Services (HHS) has been tasked with distributing the $175 billion.  

These funds are intended to be used for preventing, preparing for and responding to the coronavirus and may only be used to reimburse for health care-related expenses or lost revenues attributable to COVID-19.

The Provider Relief Fund includes a general distribution of $50 billion to hospitals and other health care providers as well as targeted allocations to specific groups, including health care providers in high-impact and rural areas and skilled nursing facilities.

For the general distribution, recipients did not apply for their allocations. Funds were distributed based on formulas driven by the provider’s 2019 Medicare Fee-For-Service payments and most recent annual gross receipts.

For all distributions from the Provider Relief Fund, those who received and retained payments for 90 days without contacting HHS are deemed to have accepted the terms and conditions associated with the funds.

In general, recipients are required to maintain appropriate records and cost documentation to substantiate the reimbursement of costs. In addition, the recipient agrees to fully cooperate with any audit requested by the federal Inspector General, Health and Human Services, or the Pandemic Response Accountability Committee, which was specifically created under the CARES Act.

At this time, HHS has not released specific guidelines regarding reporting and audit requirements for Provider Relief Funds distributed by HHS but detailed reporting requirements are expected to be released August 17, 2020.

On July 23, the Government Audit Quality Center (GAQC) released the following correspondence:

  • "There have been many questions about whether non-federal entities expending these funds will be subject to single audit and what, if any, the audit requirements will be for for-profit entities."
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  • “HHS recently informed the GAQC that for-profit entities that expend $750,000 or more of these funds during the entity's fiscal year will be subject to an audit as described in section 75.216 of HHS's adoption of the Uniform Guidance. That section discusses two options for audit of commercial organizations: (1) A financial related audit of a particular award or multiple HHS awards in accordance with Government Auditing Standards; or (2) A full single audit that meets the requirements contained in subpart F of the Uniform Guidance.”

HHS confirmed to the GAQC that these funds will be subject to the Audit Requirements under 2 CFR 200 Subpart F for non-federal entities.

The HRSA (Health Resource and Services Administration) has assigned CFDA number 93.498 to the $100 billion allocated under the CARES Act.

Weaver is working directly with HHS and other agencies and will provide more information as more detailed audit and reporting requirements become available. For information, contact us.

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