COVID-19 Grants and Funding Updates for the Health Care Sector

By Karl Rebay
Partner, Moss Adams

By Georgia Green
Manager, Health Care Consulting Practice, Moss Adams

Original Publish Date: July 7, 2020

This article is up-to-date as of July 1, 2020. We’ll continue to revise it as new information becomes available.

There are a number of financial relief efforts for the health care sector due to COVID-19 disruption. Details about grants and funding opportunities as well as important considerations for health care entities are below.

Federal Funds

Congress approved funding packages that have been and will continue to be awarded to federal agencies, including the Federal Emergency Management Agency (FEMA), the Centers for Disease Control and Prevention (CDC), and the US Department of Health & Human Services (HHS).

Large sums have been designated for health care industry purposes. The federal agencies will award the funds directly to health care providers as well as to states or state agencies, which will then pass the funds to hospitals and provider recipients.

Following are the distribution amounts to date.

UPDATED—$175 billion Provider Relief Fund for hospitals and providers through the Coronavirus Aid, Relief, and Economic Security (CARES) Act (HR 748), which includes an additional $75 billion interim fund signed on April 24, 2020 (Paycheck Protection Program and Health Care Enhancement Act). Recipients must attest within 90 days, which was extended from the original 30 days, and agree to the Terms and Conditions, otherwise remit the payment back to HHS. Additionally, for awards over $150,000, quarterly reporting to HHS is required. HHS relaxed the initial quarterly reporting deadline of July 10, 2020; however, recipients should remain on standby for instructions on the form and timing of future required reports.
- $30 billion first tranche. On April 10, 2020, and April 17, 2020, HHS distributed $30 billion directly to hospitals and eligible providers, based on Medicare fee-for-service (FFS) historic billing.
- $20 billion second tranche: Beginning on April 24, 2020, $20 billion was distributed to hospitals and providers, based on 2018 net patient revenue from all payer sources and estimated losses for March and April 2020, which were to be reported via the General Distribution portal by June 3, 2020 (FAQs are updated frequently). Entities that submit CMS cost report data automatically received a payment; however, they must confirm the data via the portal. Similar to the first tranche, recipients must attest, prior to reporting the data above, and agree to the Terms and Conditions. Adjustment payments will be distributed on a weekly basis; the first batch was distributed May 15, 2020.
- $12 billion High Impact Allocation for hospitals located in so-called COVID-19 hot spots. Funds were distributed to 395 hospitals that provided inpatient care for 100 or more COVID-19 patients through April 10, 2020, mostly located in New York.
- $10 billion for rural providers. Funds were distributed to critical access hospitals (CAHs), rural health clinics (RHCs), and rural federally qualified health centers (FQHCs) on May 6, 2020, with a base payment of $1 million per CAH and $100,000 per clinic. Funds were adjusted based on operating expenses.
- $4.9 billion for skilled nursing facilities (SNFs). On May 22, 2020, SNFs received a base payment of $50,000, plus $2,500 per bed.
- $500 million for Indian Health Service (IHS) providers. This was distributed based on operating expenses.
- An unspecified amount of funds is available for testing and treatment for uninsured COVID-19 patients on or after February 4, 2020, which can be reimbursed at Medicare rates, subject to availability. Registration opened April 27, 2020, and claims could be submitted beginning May 6, 2020.
- UPDATED—$15 billion to providers that participate in state Medicaid and Children's Health Insurance Programs (CHIP) and haven’t previously received a payment from the Provider Relief Fund. HHS estimates nearly 1 million health care providers may be eligible for this funding, including but not limited to pediatricians, obstetrician-gynecologists, dentists, opioid treatment and behavioral health providers, assisted-living facilities, and other home and community-based services providers. Payments will be at least 2% of annual patient revenue, which providers must report through an enhanced portal by July 20, 2020.
- UPDATED—$10 billion to safety-net hospitals that serve a disproportionate number of Medicaid patients or provide large amounts of uncompensated care. To qualify, hospitals must have average uncompensated care per bed of at least $25,000; profitability of 3% or less, as reported in the most recent CMS cost report; and a Medicare Disproportionate Payment Percentage of 20.2% or greater. The payments were distributed on June 12, 2020, and each hospital received $5 million–$50 million.
- UPDATED—$10 billion for second round of High-Impact payments forthcoming. On June 8, 2020, HHS sent a request to hospitals to update information on their COVID-19 inpatient admissions for the period of January 1, 2020–June 10, 2020, to determine a second round of funding. Hospitals must submit their information via the TeleTracking portal by June 15, 2020, at 9:00 p.m. ET for this round of payment; however, the portal is open for reporting ongoing updates.
Nearly $2 billion distributed by Health Resources and Services Administration (HRSA) to 1,400 community health centers. The total awards were in three payments totaling $100 million, $1.3 billion, and $583 million, with the latter award being specifically for COVID-19 testing.
$225 million distributed by HRSA for RHC testing. On May 20, 2020, nearly $50,000 per RHC was distributed for COVID-19 testing and related expenses.
$955 million distributed to states and tribes to support seniors (see allocation by state and program) by the Administration for Community Living (ACL) for home and community-based services, nutrition, caregiver support services, and the long-term care ombudsman program.
State hospital association grants. Amounts and funding purpose vary by association.

Current Funding Sources Available

Here is a list of the funding sources available. We’ll continue to update it with new opportunities.

Note on FEMA Funds

FEMA funds are awarded via a state, tribal, or territorial agreement (recipient) and then distributed to government and not-for-profit organizations (applicants). Organizations, including private not-for-profits, district hospitals, nursing homes, assisted living facilities, and clinics, can apply for public assistance once the recipient sets up an account for the applicant. Applicants must use the Grants Portal to submit a Streamlined Application for COVID-19-related expenses.

Assistance for emergency protective measures and activities include, but aren’t limited to:

Management, control, and reduction of immediate threats to public health and safety
Emergency medical care
Medical sheltering
Purchase and distribution of food

Additional Resources

The complete list of eligible items and services can be found on FEMA.gov.
COVID-19 FEMA Relief for California, Washington, and Oregon Health Care has details for not-for-profits, including district hospitals, on how to submit the Request for Public Assistance.

Applicants in any state can contact their Moss Adams professional for further information and guidance through this process.

Medicare Accelerated and Advance Payments

Beginning on Monday, March 30, 2020, Medicare providers may submit Accelerated and Advance Payment Request forms to their Medicare Administrative Contractor (MAC), via the MAC’s website. Their goal is to review and issue payment within seven days.

There are four requirements:

Filed Medicare claims within 180 days
Not in bankruptcy
Not in active medical review or program integrity investigation, which includes any current Targeted Program Educate (TPE) audits or requests (known or unknown) and Recovery Audit Contractor (RAC) audits
No outstanding delinquent overpayment amounts due for which you’ve received notification, including any you believe are incorrect

The last two requirements could be challenging for many hospitals if they don’t know their current status on TPE or other audits with Medicare. It’s recommended providers assess their audits, medical review, and overpayments status.

According to the CMS Fact Sheet:

Most Part A and B providers and suppliers may request up to 100% of the Medicare payment amount for a three-month period and will have 210 days from the date of payment to repay the balance.

On April 26, 2020, CMS announced that applications from Part B providers will no longer be accepted, and pending applications will be reevaluated in light of newly available Provider Relief Fund.
Inpatient acute care hospitals, children’s hospitals, and certain cancer hospitals may request up to 100% of the Medicare payment amount for a six-month period and will have one year from the date of payment to repay the balance.
Critical access hospitals (CAH) may request up to 125% of their payment amount for a six-month period and will have one year from the date of payment to repay the balance.

Claims will continue to be submitted and paid for the first 120 days; after this point, an automatic recoupment process will begin.

Philanthropic Funds

Additional funding sources may be available through regional philanthropic organizations for COVID-19 response.

Philanthropy CA. Resources for a list of city, county, and regional organizations in California.
Philanthropy Northwest. A list of county and regional organizations in Washington, Oregon, Idaho, Montana, Wyoming, and Hawaii.
Oregon Community Fund. For community-based not-for-profits and small businesses in Oregon.
Grantmakers of Oregon and Southwest Washington. A list of grant-making organizations’ recent activities.
Protect the Heroes Campaign. Centralized website for the general public to donate to a local hospital of their choice for purchasing PPE.

Loans

One compelling option is the Small Business Administration’s (SBA) 7(a) Loan Expansion, the Paycheck Protection Program, which was part of the CARES Act signed into law on March 27, 2020, and greatly expanded and updated on April 24, 2020. Please see our updated guidance below.

Additional Resources

Additional Non-Application Based Assistance

Some benefits to help reduce hardship will be given to health care providers universally, without requiring an application or reporting process.

Universal Benefits

The relaxation of Medicare Quality Payment Program, Merit-based Incentive Payment System (MIPS), and Value-Based Purchasing (VBP) reporting requirements
Temporary, enhanced federal Medicaid funding by 6.2% for states
A 20% increase in Medicare reimbursement for hospitals discharging COVID-19 patients
Delayed planned spending cuts to Medicaid DSH hospitals
Elimination of 2% sequestration Medicare payment cuts from May 1, 2020, to December 31, 2020
Waiver of face-to-face visit requirement for home dialysis, hospice, and home health, which enables telehealth
Ability for midlevel providers to refer Medicare patients into home health
Blanket waivers of Stark Physician Self-Referral Prohibitions, as related to COVID-19
Legal waivers allowing unprecedented use of novel locations as hospital facilities (Ambulatory Surgery Centers, stadiums, dorms, and hotels, for example) and expanded telehealth flexibilities
Medicare guidance to Durable Medical Equipment suppliers allowing coverage for upgraded multifunction ventilators, even when not medically necessary
Enhanced opportunity for collaboration via joint ventures, research, and other partnerships, due to the Federal Trade Commission and US Department of Justice offering expedited seven-day reviews
Delayed deadlines to meet interoperability requirements
Ability to earn MIPS credit from new COVID-19 Clinical Trials improvement activity
Major updates to the Medicare Shared Savings Program—application cycle, attribution, benchmark and cost calculations, down-side risk
Extended deadlines for hospitals and CAHs to submit the Promoting Interoperability hardship exception to September 1, and November 30, respectively
CMS Innovation Center models announced flexibilities for COVID-19 including updates to financial methodology, quality reporting requirements, and timelines

Strategic Considerations

To utilize current and future grant funding, staff must be trained on COVID-19 billing and coding procedures. This will help them provide complete and accurate counts of patients, procedures, and tests specifically related to the disaster.

Thorough record-keeping is essential—both for reimbursable direct costs such as testing kits as well as timekeeping for administrative staff that reflects added tasks and time related to the disaster.

Telehealth Billing

Demand and reimbursement for telehealth services is greatly expanded with required matching to the equivalent in-person service. It’s incumbent upon providers to develop capacity to provide these services.

Both telehealth and visits using noninteractive audio and video are available to furnish services. Ideally, telehealth service should integrate with the electronic health record for continuity of documentation practices and staff should be trained in telehealth billing procedures. Concise information about telehealth can be found on a web page created by the Health Resources & Services Administration (HRSA).

Use the following when billing for telehealth during the pandemic:

Place of Service (POS) equal to what it would have been if the service was furnished in-person
Modifier 95, indicating the service rendered was actually performed via telehealth
Effective March 18, 2020, the modifier CS should be added for Cost Sharing for specified COVID-19 testing-related services that result in an order to administer a COVID-19 test
No billing changes for institutional claims; CAH method II claims should continue to bill with modifier GT
Services performed via telephone, patient portal or other methods that aren’t interactive should be documented but billed with a specific set of codes for Medicare

We’re Here to Help

Navigating the application process for federal and state grants as well as other funding sources can be challenging, requires swift action, and oftentimes needs extensive supporting documentation.

And the process doesn’t stop once you apply for the funds. After an application is submitted, you’ll need to have ongoing administration to help receive available funds, account for them correctly, and decipher complex rules and regulations relating to funding overlap.

To learn more about applying for available grants and funding and subsequent administration, contact your Moss Adams professional.

Note on COVID-19

During this unparalleled time, we’re closely monitoring the COVID-19 situation as it evolves so we can provide up-to-date guidance and support to help you combat uncertainty. For regulatory updates, strategies to help cope with subsequent risk, and possible steps to bolster your workforce and organization, please see the following resources:

Karl Rebay has worked in health care consulting since 1994. He specializes in provider operations and finance, strategic business planning, and capitation arrangements to assist hospitals, physician organizations, health plans, and management services organizations. He can be reached at (949) 623-4193 or karl.rebay@mossadams.com.

Georgia Green has worked in the health care industry since 2011. She provides strategic and operational consulting services to health care providers and payers and has extensive experience helping clients integrate value-based care models from start to finish. She can be reached at (916) 503-8251 or georgia.green@mossadams.com.