Guidance Issued on Spending the Cares Act Relief Fund Payments


Many HMA clients and other physicians that billed and collected money from Medicare in 2019 received an automatic electronic payment in their operating bank account in mid-April.  HHS then issued instructions and HMA consultants applied for and received (in most cases) a second deposit in mid-May.  Although there are some exceptions, the sum total of theses payments equaled approximately 2% of the gross revenue of each practice.  HMA consultants have been referring to these payments as “HHS 1” and “HHS 2”.  Both payments required physicians to attest and accept the terms and conditions of the payments or it was assumed by HHS that the group accepted the payments by default.


Since mid-April, HHS has issued very little guidance on how these funds can be appropriately spent other than they cannot be used for the same expenses that PPP funds are utilized.  Towards the end of June, HHS’s Frequently Asked Questions Website (Click Here) was updated and the following pertinent information was provided on pages 8 and 9. 


According to the guidance, the Terms and Conditions state that Provider Relief Fund payments will 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.


The term “lost revenues that are attributable to coronavirus” means any revenue that you as a healthcare provider lost due to coronavirus. This may include revenue losses associated with fewer outpatient visits, canceled elective procedures or services, or increased uncompensated care. Providers can use Provider Relief Fund payments to cover any cost that the lost revenue otherwise would have covered, so long as that cost prevents, prepares for, or responds to coronavirus. Thus, these costs do not need to be specific to providing care for possible or actual coronavirus patients, but the lost revenue that the Provider Relief Fund payment covers must have been lost due to coronavirus.


HHS encourages the use of funds to cover lost revenue so that providers can respond to the coronavirus public health emergency by maintaining healthcare delivery capacity, such as using Provider Relief Fund payments for:  Employee or contractor payroll;  Employee health insurance; Rent or mortgage payments; Equipment lease payments; and Electronic health record licensing fees.


The FAQs state that physicians may use any reasonable method of estimating the revenue during March and April 2020 compared to the same period had COVID-19 not appeared. For example, if you have a budget prepared without taking into account the impact of COVID-19, the estimated lost revenue could be the difference between your budgeted revenue and actual revenue. It would also be reasonable to compare the revenues to the same period last year.


HMA consultants will be working with our clients over the next couple of months to develop a strategy to spend this money in an appropriate manner.


It should be noted that all providers receiving Provider Relief Fund payments will be required to comply with the reporting requirements described in the Terms and Conditions and specified in future directions issued by the Secretary. HHS will provide guidance in the future about the type of documentation they expect recipients to submit. Additional guidance will be posted at Click Here.

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