Deadline for HHS Fund Distributions for Medicaid and CHIP Providers

New details were released, June 10 by the U.S Department of Health and Human Services (HHS) regarding the distribution of more CARES Act Provider Relief Fund payments. After distributing $50 billion to Medicare providers through its General Distribution fund, $15 billion will now be distributed to eligible Medicaid and CHIP providers who apply by the deadline through a Targeted Distribution. Applicants must apply through the Enhanced Provider Relief Fund Payment Portal and are due by July 20, and the application can be found here. 

You must meet ALL of the following requirements to be considered for the Targeted Distribution:

1. Must not have received payment from the $50 billion General Distribution; and
2. Must have directly billed Medicaid (or Medicaid Managed Care Plans) for healthcare-related services during the period of January 1, 2018, to December 31, 2019, or (ii) own (on the application date) an included subsidiary that has billed Medicaid for healthcare-related services during the period of January 1, 2018, to December 31, 2019; and
3. Must have either (i) filed a federal income tax return for fiscal years 2017, 2018, or 2019 or (ii) be an entity exempt from the requirement to file a federal income tax return and have no beneficial owner required to file a federal income tax return. (e.g., a state-owned hospital or healthcare clinic); and
4. Must have provided patient care after January 31, 2020; and
5. Must not have permanently ceased providing patient care directly, or indirectly through included subsidiaries; and
6. If the applicant is an individual, have gross receipts or sales from providing patient care reported on Form 1040, Schedule C, Line 1, excluding income reported on a W-2 as a (statutory) employee.

Please note: If a provider received a General Distribution payment and returned it, they will not be eligible for this Targeted Distribution. 

Providers who qualify should apply as soon as possible to ensure they meet the July 20 deadline. Payments will be disbursed on a rolling basis, as HHS validates the information. In the application process, the provider requesting an allocation will specify whether they want to base this calculation on the calendar year 2017, 2018, or 2019 revenues. Once all data is submitted the final amount each provider receives will be based on this formula:

Payment Allocation = 2% (Gross Revenues x percent of Gross Revenues from Patient Care) 

Once a provider is approved for and receives the Targeted Distribution funds, they will have 90 days to accept the payment and attest to Terms & Condition. If a provider finds they cannot satisfy one of the terms or conditions, they should return their payment back to HHS within the 90-day period following receipt of the payment.

Like the General Distribution funds, the Targeted Distribution funds may only be used to reimburse the provider for health care expenses incurred in the prevention, preparation for, and response to coronavirus or for lost revenues attributable to coronavirus. Providers may not use the Targeted Distribution funds to pay for expenses or losses that have been reimbursed from other sources. Additionally, the Targeted Distribution Funds are characterized as federal grants, which requires the provider to take the following steps:

• Adopt a policy regarding the proper use of the funds, procedure for ensuring proper use of the funds, and appointment of a compliance officer.
• Ensure proper maintenance of records and documentation of expenditures as HHS can audit over a 3-year look back period.
• If the provider has received a Paycheck Protection Program or other coronavirus-related funds, the provider must submit separate reports and account for each pool of funds separately.