15 April 202012 minute read

Immediate COVID-19 relief to Medicare providers arrives… with conditions

On April 10, 2020, healthcare providers that participated in Medicare in 2019 began to receive initial rapid distribution of $30 billion of the coronavirus disease 2019 (COVID-19) relief payments (“Relief Payments”) from the Public Health and Social Services Emergency Fund (“Relief Fund”) under the recently passed Coronavirus Aid, Relief, and Economic Security (CARES) Act without the need for submitting applications.  According to the United States Department of Health and Human Services (HHS), the Relief Payments are intended to provide relief to providers in areas heavily impacted by the COVID-19 pandemic and those who are struggling to keep their doors open because healthy patients are delaying care and cancelling elective surgeries.[1] The HHS further emphasized that “[t]hese are payments, not loans, to healthcare providers, and will not need to be repaid.”[2]

For eligible Medicare providers who continue to suffer economic losses stemming from the COVID-19 pandemic, this is a welcome financial relief; however, there are detailed conditions attached to the Relief Payments that are important not to overlook or discount, notwithstanding the declaration from HHS that such payments will not need to be repaid.

Set out below are frequently asked questions regarding (i) the implementation of the Relief Payments and (ii) the additional Relief Fund Payment terms and conditions[3] that providers will be required to adhere to in order to retain the Relief Payments. 

How are the Relief Payments being distributed?

The Relief Payments are being distributed to the billing organization according to its Taxpayer Identification Number (TIN) by either (i) automatic payments via Optum Bank with “HHSPAYMENT” as the payment description via Automated Clearing House account information on file with UnitedHealth Group (UGH) or the Centers for Medicare & Medicaid Services (CMS), or (ii) paper check in the mail for providers that normally receive a paper check for reimbursement from CMS.

Payments that are being made to practices that are part of larger medical groups will be sent to the group’s central billing office.  Many providers have reported receiving payments as early as the date of implementation, April 10, 2020.

When will the Relief Payments be distributed?

Relief Payments being distributed by automatic payments were scheduled to occur on April 10, 2020.  A few weeks later, providers that normally receive a paper check for reimbursement from CMS will receive their Relief Payment by paper check.

Will all healthcare providers receive the Relief Payments? 

No.  Only those facilities and providers that received Medicare fee-for-service (FFS) reimbursements in 2019 will receive the Relief Payments.

Are solo practitioners eligible?

Yes, so long as they meet the Medicare billing requirements.

Are individual physicians eligible?

No, neither employed physicians or physician owners in a group practice should expect to receive an individual Relief Payment.  If the physician’s employer organization is an eligible Medicare provider it will receive the Relief Payment as the billing organization.

Are large organizations and health systems eligible?

Large organizations will receive Relief Payments for each of their billing TINs that bill Medicare.

Do Relief Payments have to be paid back?

Possibly. Although initial indications were that there would be no strings attached to the Relief Payment, the receipt of the Relief Payments is conditioned on the provider’s acceptance of Relief Fund Payment terms and conditions within the 30-day period commencing on the date of receipt of the Relief Fund payment.  During this 30-day period, the provider must sign an attestation confirming receipt of the Relief Funds and agreeing to the Relief Fund Payment terms and conditions. Failure to return a signed attestation will be deemed acceptance of the terms and conditions. The portal for the attestation was made available on April 16, 2020 and is accessible here.

If the provider receives a Relief Payment and does not wish to comply with the Relief Fund Payment terms and conditions, the provider must (i) contact HHS within such 30-day period and (ii) remit the full Relief Payment to HHS at the contact information to be made available by HHS.

What are the key terms and conditions to Accepting the Relief Payments?

The Relief Payment terms and conditions require the provider recipient to certify or adhere to the following:

  1. It billed Medicare in 2019.
  2. It provides or provided after January 31, 2020 diagnoses, testing, or care for individuals with possible or actual cases of COVID-19.
  3. It is not currently terminated from participation in Medicare; is not currently excluded from participation in Medicare, Medicaid, and other Federal health care programs; and does not currently have Medicare billing privileges revoked.
  4. The Relief Payment will only be used to prevent, prepare for, and respond to COVID-19 cases, and shall reimburse the recipient only for health care related expenses or lost revenues that are attributable to COVID-19.
  5. It will not use the Relief Payment to reimburse expenses or losses that have been reimbursed from other sources or that other sources are obligated to reimburse.
  6. It shall submit certain reports as described further below.
  7. It shall refrain from COVID-19 related “Surprise Billing” as described further below.
  8. It shall maintain appropriate records and cost documentation as required to substantiate the reimbursement of costs under the Relief Payment.The recipient shall promptly submit copies of such records and cost documentation upon the request of the HHS Secretary and agrees to fully cooperate in all audits the Secretary, Inspector General, or Pandemic Response Accountability Committee conducts to ensure compliance with the Relief Payment terms and conditions.

We expect that HHS will offer additional guidance with respect to the terms and conditions during the 30-day period following April 10.

Will the Provider Recipient have reporting obligations if it keeps the Relief Payment?

Yes. The Relief Payment terms and conditions include the following reporting obligations:

  1. The recipient shall submit reports as the HHS Secretary determines as are needed to ensure compliance with conditions that are imposed on the Relief Payment, in such form, with such content, as specified by the Secretary.
  2. If the recipient received more than $150,000 in total funds from any COVID-19 related Act (including without limitation the CARES Act, the Coronavirus Preparedness and Response Supplemental Appropriations Act, and the Families First Coronavirus Response Act), it shall submit to the Secretary and the Pandemic Response Accountability Committee a report not later than 10 days after the end of each calendar quarter that contains: (a) the total amount of funds received from HHS under one of the foregoing Acts; (b) the amount of funds received that were expended or obligated for each project or activity; (c) a detailed list of all projects or activities for which large covered funds were expended or obligated, including the name and description of the project or activity, and the estimated number of jobs created or retained by the project or activity, where applicable; and (d) detailed information on any level of sub-contracts or subgrants awarded by the covered recipient or its subcontractors or subgrantees, to include the data elements required to comply with the Federal Funding Accountability and Transparency Act of 2006 allowing aggregate reporting on awards below $50,000 or to individuals, as prescribed by the Director of the Office of Management and Budget.
What are the COVID-19 “surprise billing” restrictions associated with the Relief Payment?

The recipient of a Relief Payment must certify that it will not seek to collect from a patient obtaining care for a possible or actual case of COVID-19 out-of-pocket expenses in an amount greater than what the patient would have otherwise been required to pay if the care had been provided by an in-network recipient.

Recipient billing teams are urged to review their revenue cycle management processes to ensure there is not an inadvertent violation of the terms and conditions stemming from their routine billing processes and the treatment of a patient for a possible or actual case of COVID-19.  Note as well that HHS has stated that it “broadly views every patient as a possible case of COVID-19”; consequently, the surprise billing restriction has broad application.

What if the provider’s operations are currently closed?

If the eligible provider’s operations are closed as a result of the COVID-19 pandemic, it may still be eligible to receive a Relief Payment so long as it provided diagnoses, testing or care for individual with possible or actual cases of COVID-19.

To be eligible, does the patient care have to be specific to COVID-19?

No.  HHS has stated that it “broadly views every patient as a possible case of COVID-19”.

What if the Relief Payment is not returned within the 30-day period?

The Relief Payment terms and conditions will be deemed accepted by the recipient if the Relief Payment is not returned within the 30-day period commencing on the date of receipt of the Relief Payment.  Therefore, in essence, even if a recipient does not sign the attestation but does not return the funds it has agreed to the terms and conditions.

Are there restrictions on how the Relief Payments may be used?

In addition to the above requirements, the terms and conditions require compliance with a number of statutory requirements that restrict or limit the recipients use of the Relief Payments, including, but not limited to the following:

  • Executive pay – No Relief Payments may be used to pay the salary of any individual at a rate in excess of Executive Level II (currently set at $197,300). [4]
  • Privacy Act – No funds received may be used in contravention of section 552a of title 5, U.S. Code (the “Privacy Act”) and its implementing regulations.
  • Computer networks – No funds received may be used to maintain or establish a computer network unless such network blocks the viewing, downloading, and exchanging of pornography.
  • Confidentiality agreements – No funds received may be made available for a contract with an entity that requires employees or contractors to sign internal confidentiality agreements that would prohibit or restrict such employees or contractors from lawfully reporting fraud, abuse, or waste.
What if a provider breaches or violates the Relief Payment terms and conditions?

Violation of the Relief Payment terms and conditions may result in enforcement actions against the provider recipients. To that end, the terms and conditions specifically note that the HHS Inspector General will be accepting tips and complaints from all sources about potential fraud, waste, and mismanagement of CARES Act funding.

Will additional guidance be available to clarify the terms and conditions?

As questions from recipients continue to mount regarding certain ambiguities in the terms and conditions, it is anticipated that further guidance will be forthcoming from HHS during the 30-day period following April 10. Recipients are encouraged to work closely with their legal counsel as well as their respective finance, accounting, and compliance teams to document their Relief Fund eligibility self-certifications and adherence to the terms and conditions, account for their use of the Relief Payments, and prepare for the related reporting obligations.

How will the remaining $70 billion be disbursed?

According to the HHS website, “[T]he Administration is working rapidly on targeted distributions that will focus on providers in areas particularly impacted by the COVID-19 outbreak, rural providers, providers of services with lower shares of Medicare reimbursement or who predominantly serve the Medicaid population, and providers requesting reimbursement for the treatment of uninsured Americans.”


DLA Piper continues to closely monitor additional guidance and developments in the CARES Act Provider Relief Fund as this situation unfolds. For information on other ways the COVID-19 pandemic is changing the healthcare industry and how your company can help serve patients, please contact your DLA Piper relationship partner or any member of our healthcare industry group. Please visit our Coronavirus Resource Center and subscribe to our mailing list to receive alerts, webinar invitations and other publications to help you navigate this challenging time.


This information does not, and is not intended to, constitute legal advice.  All information, content, and materials are for general informational purposes only.  No reader should act, or refrain from acting, with respect to any particular legal matter on the basis of this information without first seeking legal advice from counsel in the relevant jurisdiction.  

[2] Id.

[4] U.S. Office of Personnel Management, Salary Table No 2020-EX: Rates of Basic Pay for the Executive Schedule (EX), https://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/salary-tables/pdf/2020/EX.pdf (effective Jan. 2020).