If your practice recently received an electronic payment as part of the Department of Health and Human Services (HHS) distribution of stimulus relief funds, you may be wondering whether or not you can retain those funds. Although the first reaction of many providers is to assume they have a right to retain the payment (after all, almost every practice has suffered losses as a result of COVID-19), this may not actually be a correct assumption.
As a condition to retaining the HHS funds, every provider receiving a payment is required to attest to meeting certain Terms and Conditions as laid out in a portal established by HHS. However, the language and detail of the Terms and Conditions are somewhat vague and poorly worded. Among the conditions are the following two attestations, which seem to be the most important on which to focus:
- The Recipient certifies that it billed Medicare in 2019; provides or provided after January 31, 2020 diagnoses, testing or care for individuals with possible or actual cases of COVID 19; is not currently terminated from participation in Medicare or precluded from receiving payment through Medicare Advantage or Part D; is not currently excluded from participation in Medicare, Medicaid, and other Federal health care programs; and does not currently have Medicare billing privileges revoked.
- The Recipient certifies that the Payment will only be used to prevent, prepare for, and respond to coronavirus, and that the Payment shall reimburse the Recipient only for health care related expenses or lost revenues that are attributable to coronavirus.
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Many providers will argue they are eligible under the first bullet point if they are providing any testing, care or diagnoses for patients. There is no minimum number of patients mentioned and it appears that even providers who may have rendered services earlier in the year and since ceased, would qualify. Of course, practices that closed their offices completely since the pandemic started and never treated a COVID patient, or which are limiting care to non-COVID patients, cannot satisfy the requirement of treating/testing coronavirus patients and should return the funds. Even providers that do meet the first bullet point need to carefully review the second bullet point, which makes it clear funds received can only be used for expenses or lost revenue attributable to the coronavirus. What are coronavirus expenses exactly? Did the practice provide enough care to infected patients to have incurred coronavirus expenses and could they prove such expenses were directly related to coronavirus? The answers to these are questions are not entirely clear, which is why practices must be careful before signing off on the attestations.
Another very important consideration is whether a physician practice that accepts payment will be able to satisfy the record-keeping requirements. All relief fund recipients must maintain appropriate records and cost documentation, which must be submitted upon request to HHS. Providers must also agree to cooperate with audits to assure their compliance with the Terms and Conditions. I think we can assume that the Office of Inspector General will be looking carefully over the next couple of years at exactly how these relief funds were used by health care providers. We can also be certain they will seek repayment of any funds which were wrongly retained or used. Funds retained improperly will also likely be considered a claim under the False Claims Act, which penalizes anyone who “knowingly presented or caused to be presented a false claim for payment to the government” and is subject to treble damages. Additionally, the False Claims Act prohibits “reverse false claims,” which occurs when a provider retains money that should have been returned to the government. For these reasons, extra caution should be used by physician practices when assessing their rights and obligations as it relates to retaining the relief funds.
How can any practice make sure it has a right to retain the relief funds from HHS? Consider these steps:
- Confirm your practice is currently providing diagnosis, testing, or care for individuals with possible or actual cases of COVID-19 or did so within the required timeframe. The government has suggested they consider any patient a “possible” COVID-19 patient, and this broad interpretation may help many practices. Think about the services being offered in the practice, the volume of patients being served and the records being retained to support this premise.
- Make sure every use of the funds by your practice is properly documented and retained for the foreseeable future, and be ready to turn records over if requested. For practices that received in excess of $150,000 there will be greater record-keeping requirements established as well.
- Work with legal and financial counsel to set up a tracking system and a process to confirm that all use of relief funds is legitimate. Expenses such as purchasing PPE, COVID- test kits, COVID-antibody testing kits, etc. are clearly the type of expenses that would be covered. Salary and overhead expenses are something that should be reviewed more carefully.
- HHS relief funds may not be used for the same purpose that a practice may receive other funds, such as through the Paycheck Protection Program (PPP) loan. This overlap must be carefully avoided. If a practice’s expenses have been covered by a PPP loan, there should be serious thought given to returning the HHS funds.
- There are certain compliance policies that must be developed as described in the Terms and Conditions. Work with legal counsel to make sure these policies are developed and retained.
A physician practice that does not believe it is eligible to retain the relief funds or meet the record-keeping requirements should promptly refund the payment. Providers can reach out to HHS to arrange for repayment of the funds or to ask any questions they may have. Some providers may feel they should retain some, but not all, of the funds, and this is something that can also be pursued with HHS.
Ericka L. Adler, JD, LLM has practiced in the area of regulatory and transactional healthcare law for more than 20 years. She represents physicians and other healthcare providers across the country in their day-to-day legal needs, including contract negotiations, sale transactions, and complex joint ventures. She also works with providers on a wide variety of compliance issues such as Stark Law, Anti-Kickback Statute, and HIPAA. Ericka has been writing for Physicians Practice since 2011.