Government Relief Fund Payments – Are there strings attached?
Many physicians were surprised to learn there was a deposit in their bank account from Health & Human Services (HHS) and felt more excitement when they found it was a grant from the government. These funds were likely from the Public Health and Social Services Emergency Fund, also known as the ‘Relief Fund’ related to the COVID-19 pandemic and the financial strain it has had on practices.
This was certainly a welcome surprise for many providers. A letter sent to Secretary Azar signed by more than 125 healthcare associations and medical societies may have helped bring light to the issue and aided in a quick delivery of funds.
However, before you rush to spend the money, it is important to understand the ‘Terms and Conditions’ attached to that money. A good suggestion would be to consult with your financial team of experts which may include your CPA, healthcare attorney, financial advisor, practice manager, billing company or department, just to name a few. These experts will help you understand what you can use the grant money for and what reporting requirements are attached to it.
Here are some Terms and Conditions provided by the Department of Health & Human Services (DHHS) you will want to review in further detail:
- Be certain that you understand and meet the detailed intent and purpose of the funding which is for healthcare-related expenses or lost revenues that are attributable to coronavirus.
- Reporting is required at different thresholds and timelines to demonstrate appropriate use as determined by the Secretary.
- Maintain appropriate records and cost documentation required by future program instructions including potential reporting to the Secretary.
- Out of network balance billing prohibitions for possible or actual cases of COVID-19 which requires attestation if you choose to keep the funds.
Other considerations that you may want to consult with your financial team may be:
- Paycheck Protection Program, part of the CARES Act – If you haven’t already applied for this, consider doing so right away if you meet the qualifications. The program provides a forgivable loan if used for specific costs related to coronavirus.
- Line of credit – If you have a line of credit, consider using that line to its fullest even if it is to set it aside in a separate bank account. With the instability of the market, it isn’t uncommon for lines of credit to be rescinded.
- Malpractice insurance – Consider negotiating with your malpractice insurance carrier to reduce your premium if your volumes have dropped. Be sure to scrutinize any documents to ensure you still have full and adequate coverage.
- Accelerated/Advanced Payments – CMS announced Medicare and Medicaid are offering accelerated and advanced payments. Consider checking the Fact Sheet to see if you qualify and how to apply.
- Many insurance companies are waiving co-pays and cost sharing for their insureds. Be sure you have a plan in place for appropriate billing. Healthcare Dive has been updating this link for many insurance companies participating in this.
More relief is expected to be forthcoming. However, it is unknown who the targeted recipients will be.
One important item to note, Surprise Billing is still unresolved outside of COVID-19 related cases. Before the pandemic, it was expected to move forward by mid-May. Now, some that are close to Congress believe it may be added to the next relief package. It is still vital that you express your concerns to your Senators and Representatives. Their contact information is listed in the links below. Please be sure your voice is heard.
Additional resources for you:
- US Senate Committee on Small Business & Entrepreneurship: The Small Business Owner’s Guide to the CARES Act
- US Department of the Treasury: The CARES Act
- Small Business Guidance & Loan Resources
- SBA Paycheck Protection Program