When the first laboratory-confirmed COVID-19 case was reported by the Centers for Disease Control & Prevention (CDC) on Jan. 22, it was difficult to predict an ensuing global pandemic would last for more than half the year. Approximately one week after the initial CDC report, the U.S. Department of Health & Human Services (HHS) declared a public health emergency, followed by the national emergency declaration in March. Together, these COVID-19 emergency declarations set in motion an array of regulatory waivers and emergency funding for healthcare providers that was largely unprecedented in modern times.
Although these emergency measures were implemented with good intentions for the public and healthcare community at large, providers must be prepared for audits in several overlapping areas due to their corresponding risks for fraud and abuse.
CARES Act Provider Relief Funds
The Coronavirus Aid, Relief and Economic Security (CARES) Act was signed into law on March 27 and allocated more than $100 billion in funding for eligible providers in their medical response to COVID-19. The Paycheck Protection Program and Health Care Enhancement Act followed, adding an additional $75 billion to this Provider Relief Fund (PRF).
These emergency funds were distributed to certain providers by the HHS commencing in April. The PRF payments are separated into general, targeted and uninsured distribution categories. Providers are required to attest to compliance with certain terms and conditions before they can accept the funds. If a provider retains the funds without an affirmative attestation, the HHS is deeming that to be an attestation to comply with the terms and conditions of the PRF.
Relief Fund Terms & Conditions:
Each PRF payment has its own terms and conditions, with common requirements for recipients to use the funds as reimbursement only for healthcare-related expenses or lost revenue attributable to COVID-19; maintain and submit documents (as required or upon request) sufficient to demonstrate the funds were used properly; abstain from balance billing any COVID-19-related treatment or any uninsured patient for whom the provider seeks reimbursement for COVID-19-related treatment; not seek collection of out-of-pocket payments from a presumptive or actual COVID-19 patient greater than what the patient would have otherwise been required to pay if the care had been provided by an in-network provider; and maintain all records for at least three years from the final date of fund expenditure.
The terms and conditions expressly state, the “Recipient acknowledges that the Recipient’s full compliance with all Terms and Conditions is material to the Secretary’s decision to disburse funds to the Recipient. Non-compliance with any Term or Condition is grounds for the Secretary to recoup some or all of the payments made.”
This language is critical because it sets up false claims liability for recipients of these funds who do not comply with the terms and conditions.
The terms and conditions indicate provider-recipients of these funds must promptly submit records and cost documentation upon HHS request and fully cooperate with audits by the HHS, the Office of the Inspector General (OIG) or the Pandemic Response Accountability Committee. On June 30, the HHS warned that significant anti-fraud monitoring of the funds would occur and that the OIG would provide oversight to ensure the funds were used appropriately.
The HHS has noted forthcoming reporting requirements and instructions for general and targeted dstribution payments exceeding $10,000. An online reporting system will open on Oct. 1. (Editor’s note 12/7/2020: The launch of the reporting system was postponed. It is now expected to open on Jan. 15, 2021.) In addition, the HHS has indicated varying audit requirements for recipients of annual federal awards exceeding $750,000.
Best practices: Although many guidelines have been relaxed and waivers implemented during this public health emergency, it is strongly recommended that providers maintain supporting documentation for the use of these funds. Providers should: