$15 Billion CARES Act Funding for Medicaid Providers

The U.S. Department of Health and Human Services (HHS) has announced that it will be distributing $15 billion of Provider Relief Funding under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) to Medicaid and Children’s Health Insurance Program (CHIP) providers including assisted living, home care agencies, and hospices. This funding, along with additional relief funding outside of the CARES Act, supports health care-related expenses or lost revenue attributable to COVID-19. Each qualifying provider that successfully applies will receive at least 2 percent of its reported gross revenue from patient care. Applications for this funding are due July 20^th, and the HHS portal for applying is now active.

This $15 billion installment of Provider Relief Funding is targeted at existing Medicaid and CHIP providers that did not receive Provider Relief Funding from the previous $50 billion General Distribution (NOTE: these payments went to Medicare providers that may also provide Medicaid services). HHS guidance indicates that the following provider categories are eligible for this funding if they meet other program requirements: assisted living facilities, home and community-based services (HCBS) providers, long term care or skilled nursing facilities (SNFs), ambulatory surgery centers, Comprehensive Outpatient Rehabilitation Facilities, Federally Qualified Health Centers, Rural Health Clinics, hospices, hospitals, drug treatment and behavioral health providers, and certain practitioners (pediatricians, obstetrician-gynecologists, and dentists). HHS has provided conflicting guidance on whether Programs of All-Inclusive Care for the Elderly (PACE) is an eligible provider category. Adult day health care (ADHC) programs, Medicaid waiver programs, licensed home care services agencies (LHCSAs), and certified home health agencies (CHHAs) are not specifically mentioned as eligible provider categories, although the categories of “home health” and “community-based social support providers” are included as applicant types in the application instructions.

To be eligible to apply, the applicant cannot be currently excluded from participation in Medicare, Medicaid, and other federal health programs and must meet all of the following requirements:

Cannot have received payment from the $50 billion General Distribution;
must have directly billed Medicaid for health care-related services during the period Jan. 1, 2018 to Dec. 31, 2019, or (ii) own (on the application date) an included subsidiary that has billed Medicaid for health care-related services during the same time period;
must have either (i) filed a federal income tax return for fiscal years 2017, 2018, or 2019, or (ii) be an entity exempt from the requirement to file a federal income tax return and have no beneficial owner that is required to file a federal income tax return (e.g., a state-owned hospital or health care clinic);
must have provided patient care after Jan. 31, 2020;
must not have permanently ceased providing patient care directly, or indirectly through included subsidiaries; and
if the applicant is an individual, have gross receipts or sales from providing patient care reported on Form 1040, Schedule C, Line 1, excluding income reported on a W-2 as a (statutory) employee.

The first criterion, “Cannot have received payment from the $50 billion General Distribution,” can be complicated to assess for multi-service providers. The key to determining if your organization meets this criterion is understanding which services your organization provides and how they are organized based on Tax Identification Numbers (TINs). The HHS Frequently Asked Questions (FAQs) indicate that providers may still be eligible for a Medicaid distribution “if their Filing TIN or one of the Billing TINs was not eligible for the $50 billion General Distribution and is a Medicaid provider on the state-provided list of eligible Medicaid and CHIP providers." So, for example, if an organization operates an Assisted Living Program (ALP) that bills Medicaid and operates under a different TIN than the organization’s SNF that received a General Distribution payment, this ALP provider would be eligible to apply. Conversely, an ADHC program that operates under the same TIN as its sponsoring SNF that received a General Distribution payment would be ineligible to apply. The provider’s billing TIN must be included in the state-provided list of eligible Medicaid and CHIP providers, or its application must pass additional validation by HHS. LeadingAge NY encourages members to review the HHS FAQ (currently beginning on page 34) and the application instructions carefully to determine their own eligibility to apply.

The second criterion, “must have directly billed Medicaid,” suggests that billing to the Medicaid fee-for-service (FFS) program would be required. However, the HHS announcement indicates that “To be eligible for this funding, health care providers must not have received payments from the $50 billion Provider Relief Fund General Distribution and either have directly billed their state Medicaid/CHIP programs or Medicaid managed care plans for healthcare-related services…” This is one of the discrepancies in guidance that we are seeking clarity on, which could have an important bearing on eligibility of LHCSAs and other programs that exclusively or predominantly bill Medicaid managed care plans for services provided.

HHS has updated its Provider Relief Fund FAQ to include questions and answers (beginning on page 31) on how the targeted Medicaid/CHIP distribution will be operationalized, including further details on eligibility, information needed for the application, and how payments will be calculated. The newly updated HHS Provider Relief Fund website also includes instructions on how to apply for the Medicaid distribution. These should be reviewed carefully prior to applying. Providers can only apply once, and the instructions outline the information that providers will need to collect in advance to be prepared to submit their application through the HHS portal. We are also seeking clarification as to the due date for applications. The HHS FAQs indicate a deadline of July 3^rd, while the application instructions note a July 20^th deadline for submitting applications.

The Medicaid Targeted Distribution funding methodology will be based on 2 percent of gross revenues times the percentage of gross revenues from patient care for calendar year 2017, or 2018 or 2019, as selected by the applicant and based on accompanying submitted tax documentation. Payments will be made to applicant providers that are on the filing TIN curated list submitted by states to HHS or whose applications underwent additional validation by HHS.

Contact: Dan Heim, dheim@leadingageny.org