You’ve seen the CARES Act stimulus payment, but did you see the strings?
Know what you are agreeing to when you accept CARES Act COVID-19 stimulus funding
By Christopher Kelly and Dan Pedersen, Attorneys, Page, Wolfberg & Wirth
During the week of Apr. 6, 2020, ambulance service suppliers began receiving their portion of $30 billion in relief money that was made available under the Coronavirus Aid, Relief and Economic Security Act (the CARES ACT).
Within 30 days of receipt of this payment, CMS is requiring all recipients to agree to Terms and Conditions. You should have also received an email from HHS that outlines the distribution of these funds and the action you must take if you wish to keep them. If you do not sign the acceptance, keeping the funds will automatically obligate you to the Terms and Conditions if you do not return the money in 30 days, so make sure you are aware of what you are agreeing to.
If you complete the Terms and Conditions requirement now available here, or if you simply keep the funds, then you ultimately agree, among other things, that:
- You are in good standing with Medicare/Medicaid and provide COVID-19 related care. If you are currently excluded or had your billing privileges revoked, you should not keep the stimulus money. Likewise, if you are not providing care to COIVD-19 patients, or are not providing care at all, it might be hard to justify keeping the funds.
- Funds must be used for COVID-19. Consider isolating the stimulus money from other accounts, or at least keeping track of it very carefully. Funds should only be used to “prevent, prepare for and respond to coronavirus, and shall reimburse the Recipient only for healthcare related expenses or lost revenues that are attributable to coronavirus.” This begs for some very careful accounting. A list of examples of what may and may not be included as related expenses/losses is included below.
- No double-dipping is allowed – other funding matters too. The stimulus funds cannot be used to pay expenses or losses that have been reimbursed from other sources. So, for example, you cannot count payroll as an expense for stimulus purposes if that payroll was paid by a CARES Act SBA loan (which will likely be forgiven).
- Reporting is mandatory for every recipient. Any person or entity receiving stimulus funds will be required to submit reports to ensure the Terms and Conditions are followed. We do not know what these will look like yet, but the Secretary of HHS will set those parameters later. For now, prepare like this report will look a lot like an accounting audit of how you spent the funds.
Additional reporting is required for higher aggregated payments. If you receive more than $150,000 in total from all the various coronavirus related relief funds (CARES Act, the Coronavirus Preparedness and Response Supplemental Appropriations Act, the Families First Coronavirus Response Act, or “any other Act primarily making appropriations for the coronavirus response”), then you will be required to file quarterly reports.
These reports must include the total amount of funds received, the amount of the funds that were spent, and each item they were spent on.
For example, if you got $100,000 in CARES stimulus funds and were also approved for $60,000 in other federal COVID-19 related funding, you would have a total above the $150,000 threshold for quarterly reporting. Therefore, keep your receipts! You must keep and, upon request, show documentation that substantiates all of the expenses and losses claimed in your reports.
- You will waive out-of-network costs to the patient. For all possible or actual cases of COVID-19, you cannot require the patient to pay out-of-pocket expenses in an amount greater than what they would have otherwise been required to pay if the care had been provided in-network. For a more thorough discussion of what this means, click here.
- There are some unallowable expenses. One frequent question we are receiving is: how can we spend these funds? While there is no official guidance on this and some of the unallowed expenses are described in the complete terms and condition document, below are some examples of what we think allowable expenses/ losses might be, with some specific non-allowed expenses (most of which come from the Terms and Conditions).
You should carefully read the entire Terms and Conditions to see what sections apply to you and begin preparing immediately to comply with the document collection, reporting, and fee-waiving requirements. If you are not willing to accept these strings, then you must return the money.
About the authors
Christopher Kelly and Dan Pedersen are attorneys with Page, Wolfberg & Wirth LLC, a law firm that focuses on healthcare law as it relates to the EMS and ambulance industry. This article is not intended as legal advice. For more information or for assistance, they can be reached at (717) 691-0100 or email to email@example.com.