- A new chance to apply for CARES Act grants was offered to providers that previously rejected the funds, among other prospective applicants.
- Some providers returned the initial CARES Act grants.
- New legislation would prevent not-for-profit providers from owing taxes on the grants.
Providers that rejected or missed applying for federal grants to mitigate revenue shortfalls from the COVID-19 pandemic will have another chance to apply.
The U.S. Department of Health and Human Services (HHS) on Aug. 10 announced it has reopened the application process, which had closed June 3, for providers to garner Provider Relief Fund (PRF) payments.
The assistance from the $50 billion general-distribution fund created by the Coronavirus Aid, Relief and Economic Security (CARES) Act is open to:
- Providers that rejected and returned the initial funding but are now interested in obtaining funds
- Providers that previously missed applying
- Medicaid and Children’s Health Insurance Program (CHIP) providers
- Dental providers with low Medicare revenues
- Providers with a change in ownership that now makes them eligible
- Providers that did not have Medicare fee-for-service revenue in 2019
Applications for the latest grants, which will provide 2% of a recipient’s total patient care revenue, are due Aug. 28.
Why the new application round?
A senior HHS official previously said an unspecified number of providers had returned their CARES Act grants.
The expanded eligibility also targets providers that did not earn Medicare revenue. The American Medical Association has been urging HHS to target CARES Act funding to such providers, including pediatric and OB-GYN practices.
The new deadline aligns with an extension for other providers that are eligible for Phase 2 funding, such as Medicaid, Medicaid managed care, CHIP and dental providers.
PRF funds have been paid in two waves: Phase 1, which was based on a share of Medicare revenue, and Phase 2, which is based on total patient care revenue. Those receiving Phase 1 payments were eligible for additional funding if their total patient revenue was larger than the Phase 1 calculation.
In the latest application process, providers previously paid under Phase 1 will have that amount factored in when determining their eligibility for Phase 2 payments.
All payment recipients are required to accept HHS’s terms and conditions. They may be subject to audits to ensure accuracy of the data provided to HHS for payment calculation.
HHS will hold an Aug. 13 provider webinar to address the payments.
Preventing taxation on CARES Act funding
Legislation, backed by hospital advocates, was recently introduced to prevent taxation of the CARES Act provider grants.
The Eliminating the Provider Relief Fund Tax Penalties Act of 2020 would prevent healthcare providers from losing at least 21% of their grants to taxes, based on calculations by the American Hospital Association (AHA).
“With the enactment of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, Congress recognized the urgent need to shore up our nation’s health care providers so they could support their communities during the current pandemic,” AHA wrote in a letter of support to the bill’s author, Rep. Cindy Axne (D-Iowa). “To then tax those same resources runs counter to that goal.”