Skip to main content
08.12.2020 Legal News

CARES Act Provider Relief Funding Update: An Extension, a Second Bite at the Apple and a New Opportunity

Starting August 10, 2020, certain health care providers can act on a welcome announcement from the federal Department of Health and Human Services (HHS) affording additional (or new) opportunities to secure Provider Relief Funding. HHS will:

  • Reopen the funding application portal for certain Medicare providers.
  • Extend the funding application deadline for certain Medicaid, Medicaid managed care, Children’s Health Insurance Program (CHIP) and dental providers.
  • Provide an avenue for Medicare providers with a 2020 ownership change to secure funding.

By way of background, earlier this year, in response to the COVID-19 pandemic, HHS announced distribution of $175 billion to health care providers through the Provider Relief Fund.[1] These funds need not be repaid if certain conditions are met. HHS began with a General Allocation, designed to provide general financial relief to health care providers, as well as Targeted Distributions, intended for providers hit particularly hard by the pandemic.

In the Phase 1 General Allocation, HHS distributed $50 billion to eligible Medicare providers in two tranches—first $30 billion, and later $20 billion—according to providers’ pro rata share of net patient revenue.[2] However, many providers with low Medicare revenues did not apply. Thus, in a July 31, 2020 press release, HHS announced a “second chance” application opportunity. Providers must apply by August 28, 2020 for the balance of their Phase 1 additional funding, capped at 2 percent of their annual patient revenues.

In the Phase 2 General Allocation, which consisted of $15 billion, HHS allowed eligible Medicaid, Medicaid managed care, CHIP and dental providers (which did not receive a Phase 1 distribution) to apply by July 20, 2020 for funding of up to 2 percent of their reported patient care revenues. After an initial application deadline extension to August 3, 2020, HHS has now determined a second extension to August 28, 2020 would be beneficial to these providers and has promised a more “simplified application” aimed at improving “the provider experience.” Ahead of the deadline, HHS will host a webinar on Thursday, August 13, at 3:00 p.m. EDT.

HHS is also providing a funding application opportunity to providers who experienced a 2020 ownership change. Certain providers changing ownership in 2020 “missed out” on payments distributed to previous owners, which HHS restricted from transfer to the new owners. Instead, HHS required the previous owners to refund payments to HHS if they were unable to attest to diagnosing, testing, or caring for individuals with possible or actual COVID-19 cases on or after January 31, 2020. To remedy this, starting the week of August 10, 2020, HHS is allowing new owners to seek funding by submitting revenue information, along with documentation proving a change in ownership, by August 28, 2020.

In each scenario, the applicable deadline is Friday, August 28, 2020. Attestation portals, steps for applying and additional announcements are available here

[1] Congress appropriated a $100 billion General Allocation to health care providers pursuant to the Coronavirus Aid, Relief, and Economic Security (CARES) Act, as well as an additional $75 billion pursuant to the Paycheck Protection Program and Health Care Enhancement Act (PPPHCEA).
[2] Our firm circulated an alert describing this distribution in detail on May 1, 2020, available here

Please note: This alert contains general, condensed summaries of actual legal matters, statutes and opinions for information purposes. It is not meant to be and should not be construed as legal advice. Readers with particular needs on specific issues should retain the services of competent counsel.

Please click here for additional legal updates from Williams Mullen regarding COVID-19.