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May 26, 2020

Health Headlines – May 26, 2020


HHS Releases New Frequently Asked Questions Regarding CARES Act Provider Relief Funds – Last week, HHS released new and modified existing Frequently Asked Questions (FAQs) regarding payments distributed to providers via the CARES Act Provider Relief Fund.  Importantly, the CARES Act requires that providers attest that they meet certain Terms and Conditions to retain Provider Relief Funds. The FAQs released by HHS provide additional detail regarding requirements for the Provider Relief Funds.

Many of the new FAQs address questions relating to transactions, including mergers and acquisitions.  For example, HHS addressed the case of a merger of a provider entity into another entity, or the consolidation of two or more entities, resulting in the creation of a new entity with a single billing TIN between January 1, 2018 and January 31, 2020.  According to the FAQs, in that case, if the non-surviving entity received a Provider Relief Fund payment but was not providing diagnoses, testing, or care for individuals with possible or actual cases of COVID-19 on or after January 31, 2020, the provider must reject the Provider Relief Fund payment.  Further, HHS explained that, if the acquiring entity received a Provider Relief Fund payment, it should accept the payment only if its adjusted gross receipts exceed the gross receipts shown in the tax return by more than 20% in the Provider General Distribution Relief Fund Payment Portal to be considered for additional Provider Relief Fund payments.

The complete FAQ document is available on the HHS website here.

Reporter, Lauren S. Gennett, Atlanta, + 1 404 572 3592, lgennett@kslaw.com

HHS Announces $4.9 Billion Distribution to Nursing Facilities Affected by COVID-19 - On May 22, 2020, HHS announced that it has begun distributing $4.9 billion in additional relief funds to skilled nursing facilities (SNFs) to assist SNFs in weathering significant expenses or lost revenue attributable to the COVID-19 public health emergency.  Each eligible SNF will receive a fixed distribution of $50,000, plus a distribution of $2,500 per bed.  All certified SNFs with six or more certified beds are eligible for the distribution.  The funds will be distributed from the $175 billion Public Health and Social Services Emergency Fund (also known as the Provider Relief Fund), established by the Coronavirus Aid, Relief, and Economic Security Act and expanded by the Paycheck Protection Program and Health Care Enhancement Act.

In receiving the funds, SNF recipients must attest that they will use Provider Relief Fund payments only for health care related expenses or lost revenues that are attributable to COVID-19, as set forth in the Terms and Conditions, and agree to comply with future government audit and reporting requirements.  The Terms and Conditions include the following required certifications by the recipient:

  • the recipient provides or provided after January 31, 2020 diagnoses, testing, or care for individuals with possible or actual cases of COVID-19;
  • the payment will only be used to prevent, prepare for, and respond to COVID-19, and the payment shall reimburse the recipient only for health care related expenses or lost revenues that are attributable to COVID-19; and
  • the recipient will not use the payment to reimburse expenses or losses that have been reimbursed from other sources or that other sources are obligated to reimburse.

SNF recipients must maintain appropriate records and cost documentation to demonstrate compliance with the Terms and Conditions.

The May 22, 2020 distribution marks the first dedicated COVID-19 relief for nursing homes, which have been among the providers most affected by the COVID-19 pandemic.

Reporter, Igor Gorlach, Houston, +1 713 276 7326, igorlach@kslaw.com.

CMS Releases New Guidelines for Reopening Nursing Homes - On May 18, 2020, CMS released guidelines for State and local officials for phased nursing home reopenings.  The guidelines include recommendations for (1) the criteria for relaxing certain restrictions and mitigating the risk of resurgence, (2) visitation and service considerations and (3) restoration of survey activities.  The guidelines are non-binding recommendations and provide significant discretion to State and local leaders in making decisions specific to their communities.

One of the decisions that States are encouraged to make based on their specific communities is whether the phases should progress on a state-wide, region-wide, or individual facility level.  The guidelines include various factors that should be used to inform relaxing restrictions in nursing homes.  These factors include the case status in the community, the case status in the nursing home, the adequacy of staffing, access to adequate testing, universal source control, access to adequate personal protective equipment and local hospital capacity.  CMS recommends that nursing homes have a testing plan based on CDC recommendations that includes, at a minimum, the capacity for all nursing home residents to receive a single baseline COVID-19 test and the capacity for all nursing home staff to receive both a single baseline COVID-19 test as well as re-testing of all staff every week. 

The guidelines are structured in phases and crosswalk to the Opening Up America Again guidance for reopening State economies.  However, the guidelines emphasize that additional criteria are recommended for advancing through the phases of reopening nursing homes due to the elevated risk COVID-19 poses to nursing home residents.  The guidelines also recommend that a nursing home spend a minimum of 14 days in a given phase, with no new COVID-19 cases, prior to advancing to the next phase. 

Phase 1, which reflects the current state, includes strict limitations on visitors to nursing homes and also limited survey activity.  Specifically, in Phase I, surveying activity is limited to investigation of immediate jeopardy threats, revisit surveys to confirm the facility has removed any immediate jeopardy findings, focused infection control surveys, initial certification surveys, and State-based priority surveys (e.g., localized “hot spots,” “strike teams,” etc.). 

Phases 2 and 3 include a gradual relaxation of restrictions.  However, the guidelines recommend the general prohibition of all visitors except for compassionate care situations until Phase 3.  Normal survey activity is not recommended to resume until Phase 3, although Phase 2 adds surveys investigating complaints of actual harm to residents to the Phase 1 survey activity identified above.  Additionally, the recommendation that all staff are tested weekly continues through all three phases.  

CMS’s guidelines are available here

Reporter, Isabella E. Wood, Atlanta, + 1 404 572 3527, iwood@kslaw.com.

Also in the News

HHS Extends Deadline for Providers to Accept Receipt of Provider Relief Fund Payments – On March 20, 2020, HHS issued an alert to remind providers that they must accept the HHS Terms and Conditions by June 3, 2020, and submit the required revenue information on the General Distribution Portal to support receipt of additional General Distribution payments from the Public Health and Social Services Emergency Fund’s $50 billion (Provider Relief Fund).  Providers who received an additional general distribution payment prior to 5:00 p.m., on Friday, April 24, 2020 must submit an accounting of their annual revenues through tax forms or financial statements and must also agree to the program’s Terms and Conditions if they intend to keep the funds.  Providers with cases pending before HHS for adjudication regarding their eligibility for the general distribution funding will not be impacted by the General Distribution Portal submission closing.  Cases requiring individual adjudication will need to be received by HHS no later than June 3, 2020. The alert may be found here

King & Spalding Business Recovery Task Force Healthcare organizations now must navigate the challenge of both resuming and continuing work in the context of the ever-changing “new normal.”  To help our healthcare clients address this challenge, the King & Spalding Coronavirus Business Recovery Task Force has created a tool for healthcare organizations to assess and strengthen their recovery response.  Access the COVID-19 Recovery Response Assessment for Healthcare Organizations here.  Access the Coronavirus Business Recovery – Return to Work Hub here.