Health Care Providers Should Prepare for $100 Billion Reimbursement

Eligible Health Care Providers

Funds are to be available to “eligible health care providers,” a broad category that is not yet fully defined. Eligible health care providers are those located in the United States or its territories that provide diagnosis, testing or care for individuals with possible or actual cases of COVID-19. Governmental entities and Medicare and Medicaid providers and suppliers are specifically included, and the Secretary is authorized to include other providers, both for-profit and nonprofit.

Eligible Expenses

Funds are to be available for:

• Building or construction of temporary structures;
• Leasing of properties;
• Medical supplies and equipment, including personal protective equipment (PPE) and testing supplies;
• Increased workforce and trainings;
• Emergency operation centers;
• Retrofitting facilities; and
• Surge capacity.

Important Limitations

The Act states that appropriated funds are not to be used to reimburse expenses or losses that have been or will be reimbursed from other sources. Notably, the list of expenses eligible for reimbursement does not include the costs of providing health care services generally, expenses for which the Medicare Program has historically said its payments are adequate reimbursement.

Applications, Reports and Payments

The specific process for the submission and review of applications for reimbursement has yet to be issued. At a minimum, an application must include a statement “justifying the need of the provider for the payment” and a valid tax identification number. The Secretary is instructed to review these applications and make payments “on a rolling basis.”

The Act gives the Secretary broad discretion to determine both the amounts of reimbursement payments and how they are made, but directs the Secretary to use the “most efficient payments practicable to provide emergency payment,” which may include pre-payments, prospective payments, or retrospective payments.

Those who receive payments will be required to maintain documentation and submit reports to the Secretary. The specific requirements remain to be established. There may be particular challenges to HHS establishing mechanisms to make payments to providers who do not participate in Medicare, participation in Medicaid alone not creating the necessary linkage to a Federal payment mechanism.

Best Practices

The Secretary has yet to provide essential guidance. However, as the allocated funds will not be processed under a typical regulatory review and timeframe, health care providers should not wait to begin quantifying coronavirus-related expenses and lost revenues and analyzing whether they fall within the categories eligible for reimbursement. Those wishing to pursue these funds should have their numbers ready to plug into the formulae and documentation that HHS will specify.

For more information, please reach out to your regular Pillsbury contact or the authors of this client alert.

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