As part of a suite of COVID-19 relief programs, the CARES Act appropriated $100 billion into a Provider Relief Fund meant for “hospitals and other healthcare providers on the front lines of the coronavirus response.” Medicare providers and facilities should have seen funds appear in their accounts between April 10 and April 17 when the first $30 billion of the $50 billion general allocation was distributed. Further, eligible recipients should begin to see funds from the remaining $20 billion of the general allocation as well as additional targeted allocations for hospitals in hot zones or rural areas.
The initial distribution was based on providers’ proportional share of Medicare Fee-For-Service reimbursements in 2019. For the sake of efficiency, these distributions were made based on the Tax Identification Numbers used when submitting bills. This approach, while expeditious, has also resulted in several potentially undesirable consequences. For example, practices or facilities that experienced a change of ownership during 2019 may notice that their distribution excluded the proportional share of reimbursement for the period prior to the change of ownership when the prior owner’s TIN was still in place. In fact, the prior owner may have received those funds attributable to that time period. Additionally, the interests of facilities and group practices may not align with the providers for whom they bill as they face the dilemma of how to appropriately allocate relief funds and whether credit should be given for compensation based on collections. The resolution of these issues will likely hinge on the terms of the contracts that govern these employment relationships.
Hospitals, facilities, providers, and all other affected parties are advised to consult with legal counsel when faced with the nuances of CARES Act funding. Further, as Congress debates additional funding packages, stakeholders should have a plan in place that suits their particular and unique needs. The Health Law Practice Group at Duane Morris is prepared to guide clients through the intricacies of these programs and advise on the most advantageous approach for future relief fund packages. Facilities and providers should contact Neville Bilimoria, Erin Duffy, Kirk Domescik, Ryan Wesley Brown, or your usual contact within the Health Law Practice Group with any questions regarding CARES Act funding.
In a recent 5-4 decision by the U.S. Supreme Court, Armstrong v. Exceptional Child Center, Inc., Slip. Op., 575 U.S. ____ (March 31, 2015), Justice Scalia, writing for the majority, took aim at health care providers seeking to enforce Medicaid rate-setting provisions against a state that refused to incorporate those provisions in the state’s Medicaid plan, and instead reimbursed providers for Medicaid services at lower rates.
In Armstrong, the plaintiffs, providers of habilitation services under Idaho’s Medicaid plan sought an injunction to prevent Idaho’s State Department of Health from violating Section 30(A) of Medicaid, 42 U.S.C. § 1396(a)(30)(A), which requires a state to “assure that payments are consistent with efficiency, economy, and quality of care,” while “safeguard[ing] against unnecessary utilization of. . . care and services.” The Court reversed the Ninth Circuit’s decision that the Supremacy Clause gave the providers an implied right of action to seek an injunction requiring Idaho to comply with Section 30(a). Continue reading SCOTUS Limits Claims Brought by Healthcare Providers’ for Denied Medicaid Reimbursement
Effective June 17, 2013, state Medicaid fraud control units (MFCU) will be permitted to use federal matching funds to pay for data mining activities to detect potentially fraudulent utilization and billing patterns. Historically, MFCUs have been prohibited from using federal matching funds to pay for the cost of data mining. Given the financial constraints facing MFCUs, this funding is likely to result in a substantial increase in activities by MFCUs across the United States. While this rule in and of itself is noteworthy, it is likely to have a more significant impact on healthcare providers when coupled with the regulation implementing the Patient Protection and Affordable Care Act (ACA) that requires states to suspend all Medicaid payments to a provider upon credible allegation of fraud during, or triggering, a Medicaid investigation.
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On July 29, 2011, the U.S. Department of Health and Human Services (HHS) announced that it would provide a total of $71.3 million in grant funding to expand the education and training of nurses and nursing diversity. The monies will be distributed among six types of awards: Nurse Education, Practice, Quality and Retention; Nursing Workforce Diversity; Nurse Faculty Loan Program; Advanced Nursing Education Program; Advanced Education Nursing Traineeships; Nurse Anesthetist Traineeships. Monies from these awards will support all levels of education from entry-level nursing to advanced traineeships, increase opportunities for individuals from disadvantaged backgrounds, and provide partial loan-forgiveness for nursing faculty.
To read more about this announcement and see details of each of the awards, please go to http://www.hhs.gov/news/press/2011pres/07/20110729a.html.
On February 24, 2011, the U.S. Department of Health and Human Services (HHS) announced that states can begin to apply for a second round of grants, which they can use to create or improve existing health insurance premium review programs. Approximately $200 million is available to states to better track and review premium rate increases, and make the rate process more transparent to consumers. HHS anticipates that the state review programs will also enable states to challenge or even prevent unreasonable premium increases from being implemented. This round of grants marks the federal government’s continued effort to combat rising health insurance premiums.
To read more about this announcement and to see how to access grant funding, please go to http://www.healthcare.gov/news/factsheets/ratereview02242011a.html.
On February 22, 2011, the U.S. Department of Health and Human Services (HHS) announced that it would provide $45 million in grant funding to 13 states for the startup and operation of Money Follows the Person (MFP) demonstration projects. States operate MFP programs to provide financial support and assist Medicaid beneficiaries with moving from institutions (i.e., hospitals and nursing facilities) and transitioning back into their communities to live in their own homes or other facilities. HHS anticipates that this federal funding will help 13,000 more Medicaid beneficiaries, and it will continue to provide grant funding through 2016 by committing at least $621 million to the state projects.
To read more about this announcement and see the list of 13 states scheduled to receive grant funding, please go to http://www.hhs.gov/news/press/2011pres/02/20110222b.html.
On February 16, 2011, the U.S. Department of Health and Human Services (HHS) announced the states that will receive a total of $241 million to design and implement the IT infrastructure used to operate health insurance exchanges. The seven states selected by HHS are known as “early innovator” states because the infrastructure that they establish may be adopted by other states to set up their own exchanges. This announcement demonstrates HHS’s commitment to funding the development of user-friendly systems that will enable consumers to easily navigate the exchanges.
To read more about the IT grants and see the list of states scheduled to receive grant funding, please go to http://www.healthcare.gov/news/factsheets/exchanges02162011a.html.
On January 20, 2011, the Department of Health and Human Services (HHS) announced an additional grant funding opportunity for states to establish their health insurance exchanges. Two types of grants will be available: Level One and Level Two. Level One grants will provide states with funding for up to one year, and subsequent to the first year, states may apply for a second year of Level One funding. Level Two grants, which provide states with funding through December 31, 2014, are available for those states that are further along in the implementation of their exchanges. For states to receive funding at either level, they must submit plans to HHS outlining how they intend to implement the exchanges along with anticipated expenditures. HHS did not disclose the amount of funding available for the grants, but it noted that funding will vary based on state need. For additional information regarding the grants, please see the Health Insurance Exchange Establishment Grants Fact Sheet.
On October 26, 2010, HHS announced that there is up to $335 million in available funding for existing community centers throughout the United States. The purpose of the additional funding is to increase access to preventative and primary care services. Health centers interested in obtaining federal funds must submit an application in which they have to explain how they intend to expand their medical capacity and services to underserved populations. The applications must be submitted by January 6, 2011, and they are available at bphc.hrsa.gov/es/. For additional information regarding this news release, please go to the following website: http://www.hhs.gov/news/press/2010pres/10/20101026a.html.