Health Care Funding, Grants, Relief Opportunities Under COVID Packages

• April 16, 2020
• Jennifer Boese

To date there have been three COVID-19 relief packages enacted, each with funding mechanisms to stir the economy and help individuals. CLA has been active in assisting our clients with all of these moving parts. Our hope is that we can help with maneuvering through rapidly changing details and processes related to accessing funds and, ultimately, to help everyone begin the rebuilding process.

Small Business Administration Loans and Main Street Lending Program

CLA has an entire team assembled and working with current and new clients related to the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan (EIDL) program under the Coronavirus Aid, Relief and Security Act (CARES). As of today (April 16), the PPP has fully tapped the $349 billion allocated to it under the CARES Act. A fourth COVID package to replenish the PPP has been under negotiation in Congress, but an agreement has not yet been reached.

For regular updates and insights, take a look at our COVID-19 resource page for details and register for our free, twice-weekly Livestreams to stay up-to-date on key COVID topics. And, if you have questions on these programs, human resource-related implications from various COVID funding laws or the impending Main Street Lending program also under the CARES Act, please reach out.

That said, today’s blog is focused specifically on the funds targeted at health care, health care programs and health care providers.

Health Care Provider Relief Fund ($100 billion)

This is the most talked about fund for health care providers. Under the CARES Act, $100 billion was allocated to “eligible health care providers for health care related expenses or lost revenues that are attributable to coronavirus.”

An initial $30 billion of the $100 billion was released by the Department of Health & Human Services (HHS) on Friday, April 10. If you received Medicare Part A or B fee-for-service (FFS) reimbursements in 2019 then you were eligible for this first bucket of funding. That funding was distributed based on a provider’s share of total Medicare FFS reimbursements in 2019. Taking out items like copays, CMS put total FFS payments at approximately $484 billion in 2019. See CMS example.

If you received these dollars, there are several key things to keep in mind with the funds:

• Providers must agree not to seek collection of out-of-pocket payments from a COVID-19 patient that are greater than what the patient would have otherwise been required to pay if the care had been provided by an in-network provider. In other words, no balance billing.
• Within 30 days of receiving the payment, providers must sign an attestation confirming receipt of the funds and agreeing to the terms and conditions of payment. The attestation portal is live now.

We have fielded many questions related to these funds. Some of the most pressing questions relate to the 10 pages of terms and conditions and yet-to-be-known compliance requirements. These terms are not insignificant, and we encourage you to consider them closely. We expect HHS to release additional guidance since there are many unknowns.

HHS is also indicating the next bucket of funds from the $70 billion remaining will come out quickly and will focus on providers with less Medicare revenue, higher levels of Medicaid, rural providers, and hot zones.

Watch for updates via HHS’s provider relief portal.

Telehealth Grant Funding

There are several telehealth grant funding opportunities available under the CARES Act. The Federal Communications Commission (FCC) received $200 million under the CARES Act to help health care providers provide connected care services to patients. The FCC grant is called the COVID-19 Telehealth Program and will award up to $1 million per grantee for eligible services.

The FCC defines “eligible services” or service-enabled technologies as those that deliver remote medical, diagnostic, patient-centered, and treatment-related services directly to patients outside of traditional brick-and-mortar medical facilities—including to patients in their homes, rather than at a healthcare provider’s physical location. There are various steps applicants will need to take to apply. The FCC’s application portal is open now.

In addition, the CARES Act funds several telehealth grant programs with $29 million per year from 2021 through 2025. Various requirements related to these grant programs, Telehealth Network and Telehealth Resource Center, are relaxed, such as allowing for-profit entities to apply and removing the cap on maximum award amounts.

In general, these grant programs are designed to help telehealth programs and networks improve access to quality health care services in rural and underserved communities.

Federal Emergency Management Agency Grants (FEMA)  

The CARES Act included $45 billion designated to the FEMA Disaster Relief Fund related to COVID-19 and other major disasters as declared by the President. Since the President declared a national emergency this means all 50 states, the District of Columbia, five territories, and numerous tribal governments are covered by the declarations. As such, State, territorial, tribal, and local government entities as well as certain private non-profit (PNP) organizations are eligible to apply for FEMA Public Assistance funds.

In general, all applicants must meet certain eligibility requirements related to four components: cost, work, facility and applicant type. There are some differences within these categories, particularly for PNPs. Health care providers may be considered an eligible PNP if several requirements are met:

• Must have a ruling letter from the Internal Revenue Service granting tax exemption under sections 501(c), (d), or (e) of the Internal Revenue Code of 1954 or be able to show documentation from the state substantiating that the non-revenue producing organization or entity is a nonprofit entity organized or doing business under state law.
• Must own or operate an eligible facility. An eligible facility is one that provides an eligible service, which includes education, utilities, emergency, medical, custodial care, and other essential social services

Private entities, including for profit hospitals or restaurants, are not eligible for FEMA Public Assistance grants. However, state, local, tribal, and territorial government entities may contract with these private entities to carry out eligible emergency protective measures.

Since this is emergency work under the FEMA Public Assistance program, emergency medical care and medical sheltering during COVID-19 are allowable for PNPs. Medical sheltering costs are eligible when existing facilities are reasonably forecasted to become overloaded in the near future and cannot accommodate needs.

Examples of allowable medical care includes:

• Triage and medically necessary tests and diagnosis related to COVID-19 cases
• Emergency medical treatment of COVID-19 patients
• Prescription costs related to COVID-19 treatment
• Use or lease of specialized medical equipment necessary to respond to COVID-19 cases
• Purchase of PPE, durable medical equipment, and consumable medical supplies necessary to respond to COVID-19 cases (note that disposition requirements may apply)
• Medical waste disposal related to eligible emergency medical care
• Emergency medical transport related to COVID-19
• Temporary medical facilities and expanded medical care facility capacity for COVID-19 for facilities overwhelmed by COVID-19 cases and/or to quarantine patients infected or potentially infected by COVID-19.
• Temporary facilities and expansions may be used to treat COVID-19 patients or non-COVID-19 patients, as appropriate. 

There are numerous restrictions and requirements related to FEMA funding, including that these dollars are funds of last resort. In other words, these costs cannot be covered by any other funding sources. We note that FEMA grants are a complicated process and there is more you will need to consider if applying.

Other Funds or Funding Opportunities

There are dozens of other changes in the COVID packages that also help to increase reimbursements, provide add-on payments or increase funding. These are just a few:

• $250 million in Hospital Preparedness Program funds (CARES Act), $100 million has already been released and will run through state hospital associations.
• $425 million for behavioral health, substance abuse and suicide prevention grants and funding (CARES Act). These are administered by the federal Substance Abuse and Mental Health Services Administration (SAMHSA). Some grant opportunities are already posted (www.grants.gov).
• $150 million for rural hospitals (CARES Act). These funds are in process and will run through respective state offices of rural health via the Small Rural Hospital Improvement Program (SHIP).
• $1.3+ billion in supplemental funds for community health centers (CARES Act and first COVID stimulus package). All of these funds have been disbursed to community health centers.
• $90 million for Ryan White HIV/AIDS grant programs (CARES Act). These funds are being disbursed now by HRSA.
• $8 billion+ for Tribal governments plus multiple additional grant funds (CARES Act). Some grants are already posted (www.grants.gov).
• Coverage and reimbursements for COVID-19 testing (CARES and “Families First” COVID package). The Centers for Medicare & Medicaid (CMS) Services has released guidance.
• 20% add-on payments for inpatient COVID patients at prospective payment system hospitals (CARES). For claims received by CMS April 20 or prior, CMS will reprocess (providers do not need to do anything). Claims on or after April 21, CMS will process with the add-on payment.

CLA is engaged with all of these moving parts and can help you decipher the funding source, see if you qualify, help with how to apply for grants, and then, prepare for reporting and compliance. We’re here to help.

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