Long Awaited Relief for Medicaid Only Providers

Medicaid only providers, including Intermediate Care Facilities for the Intellectually Disabled (ICF-IID), Assisted Living, and Waiver, finally received some long awaited good news. On June 9, 2020, the Department of Health and Human Services (HHS) announced additional distributions from the Provider Relief Fund to eligible Medicaid only providers that participate in state Medicaid and Children’s Health Insurance Program (CHIP) programs. HHS expects to distribute approximately $15 billion in Medicaid Targeted Distributions to eligible providers.

The new Provider Relief Fund Payment Portal may only be used by providers who did not receive payments under the previous $50 billion General Distribution.  However, it does not need to be exclusively a Medicaid provider.  For example, providers experiencing a change in ownership that were left out of the general distribution are eligible to request funds as long as they directly billed Medicaid between January 1, 2018 and December 31, 2019.

ACTION REQUIRED: Must submit application by September 13, 2020 to be eligible for payment.

Applications for the Medicaid Targeted Distribution must be submitted by September 13, 2020. The Provider Relief Fund Payment Portal will allow eligible Medicaid and CHIP providers to report their annual patient revenue, which will be used as a factor in determining their Provider Relief Fund payment. The payment to each provider will be at least 2 percent of reported gross revenue from patient care; the final amount each provider receives will be determined after the data is submitted, including information about the number of Medicaid patients providers serve.

Before applying through the enhanced provider relief portal, applicants should:

You should not apply until all of the information and documentation required by the application form.  You can only submit one application. You cannot edit the data on the application form after it is submitted. The application form is 2 pages with 9 pages of instructions. We anticipate many questions and additional guidance to be issued.

The Provider Relief Fund frequently asked questions (FAQs) are updated frequently. A new section entitled “Medicaid Targeted Distribution” contains additional details. Key information from the instructions and FAQs is summarized below.

To be eligible to apply for the Medicaid Targeted Distribution, the applicant must meet all of the following requirements:

  1. Must not have received payment from the $50 billion General Distribution.
  2. Must have directly billed Medicaid for healthcare-related services during the period of January 1, 2018, to December 31, 2019.
  3. Must have filed a federal income tax return for fiscal years 2017, 2018 or 2019.
  4. Must have provided patient care after January 31, 2020.
  5. Must not have permanently ceased providing patient care directly, or indirectly through included subsidiaries.

Note: the instructions and FAQs has additional details regarding individuals, owned subsidiaries and entities exempt from filing tax returns.

The following fields must be completed on the application which will require calculations or upload:

Field 6: Number of facilities

  • Enter the number of facilities that the applicant and its included subsidiaries operated on 5/31/2020.

Field 7: Beds for all facilities

  • Enter the number of inpatient beds in facilities operated by the applicant and its included subsidiaries on 5/31/2020.

Field 8: Total number of FTE

  • Enter the full-time equivalent (FTE) of employees providing patient care.
  • A 1.0 FTE works whichever number of hours the applicant considers to be the minimum for a normal workweek, which could be 37.5, 40, 50 hours, or some other standard.
  • To compute FTE of a part-time provider, divide the total hours worked by the provider, by the total number of hours that your organization considers to be a normal workweek.

Field 9: CMS Certification Number (CCN)

  • If applicable, enter CCN which is Medicare Provider Number.

Field 10: Gross Revenues: $

  • Most recent gross revenues number from its federal tax return of 2017, 2018, or 2019. Applicants with gross revenue adjustments should enter an adjusted gross revenues number as calculated using the Gross Revenues Worksheet in Field 15.
  • Partnership: Enter Line 1c minus Line 12 from IRS Form 1065.
  • C Corporation: Enter Line 1c minus Line 15 from IRS Form 1120.
  • S Corporation: Enter Line 1c minus Line 10 from IRS Form 1120-S.
  • Tax-exempt organization: Enter Line 9 from IRS Form 990 minus any joint venture income, if included in Part VIII lines 2a – 2f.
  • Trust or estate: Enter Line 3 from IRS Form 1040, Schedule C.
  • Sole proprietor or disregarded entity owned by an individual: Enter Line 3 from IRS Form 1040, Schedule C excluding any income reported on W-2.
  • Entity not required to file any of the previously mentioned IRS forms:  Enter a “net patient service revenue” number or equivalent from the applicant’s most recent audited financial statements (or management-prepared financial statements)

Field 11: Fiscal Year of Gross Revenues

  • Enter the fiscal year of the most recent filed federal income tax return.

Field 12: Percentage of Gross Revenue from Patient Care: %

  • Enter the percentage of gross revenues that represents amounts received for patient care. This percentage includes pharmacy revenue derived through the 340B program and should exclude non-patient care revenue, e.g., insurance, retail, or real estate revenues.

Field 13: Lost Revenues due to COVID-19: $

  • Enter lost revenues due to COVID-19 for March and April 2020.
  • A positive value in this field indicates a net gain due to COVID-19.
  • You may use any reasonable method of estimating the revenue during March and April 2020 compared to the same period had COVID-19 not appeared. For example, if you have a budget prepared without taking into account the impact of COVID-19, the estimated lost revenue could be the difference between your budgeted revenue and actual revenue. It would also be reasonable to compare the revenues to the same period last year.

Field 14: Increased Expenses due to COVID-19: $

  • Enter increased expenses due to COVID-19 for March and April 2020.
  • “Increased expenses due to COVID-19” is a broad term that may cover a range of items and services, including:
    • supplies used to provide healthcare services for possible or actual COVID-19 patients (e.g. PPE).
    • equipment used to provide healthcare services for possible or actual COVID-19 patients.
    • workforce training.
    • developing and staffing emergency operation centers.
    • reporting COVID-19 test results to federal, state, or local governments.
    • building or construction of temporary structures to expand capacity for COVID-19 patient care or to provide healthcare services to non-COVID-19 patients in a separate area from where COVID-19 patients are being treated.
    • additional staffing costs to expand capacity or to provide more intensive medical services.

Field 15: Gross Revenues Worksheet

  • Any applicant with gross revenue adjustments who enters an adjusted gross revenue number different from the applicable number shown on its tax return must upload the Gross Revenue Worksheet.
  • “Applicant with gross revenue adjustments” means an applicant that acquired (whether as stock or asset purchase) or disposed of (whether by sale, termination, or otherwise) included subsidiaries such that its gross revenue as calculated in Field 10 is more than 20% larger or smaller than the adjusted gross revenue number as calculated using the Gross Revenues Worksheet.

Field 16: Federal Tax Return

  • Upload the most recent filed federal income tax return for 2017, 2018 or 2019.
  • If you do not have a federal tax form to submit, upload a statement explaining why the entity is not required to file a federal tax form (note that non-profit entities should submit a Form 990) or is unable to provide the required information. In addition, provide the most recent audited financial statements (or management prepared financial statements) for the TIN entity. If the financial information of a TIN entity is reported as part of a parent organization, it may be necessary to provide consolidating audited financial statements that breakout the revenue and expenses for the TIN entity.

Field 17 – 24:  Payer Mix: %

  • Enter the percentage of your gross revenues (as submitted in Field 10) for each applicable payer source.
  • Enter “0.” for any of payers that do not apply to you.

Field 25: Total Amount received from Treasury SBA / PPP: $

  • Enter the total amount received from Treasury SBA / PPP by the applicant and its included subsidiaries as of 5/31/2020. Enter “0,” if not applicable.

Field 26: Total Amount received from FEMA: $

  • Enter the total amount received from FEMA by the applicant and its included subsidiaries as of 5/31/2020. Enter “0,” if not applicable.

Field 27: Primary Provider FTE under filing TIN as of 5/31/2020

  • “Primary provider” includes physicians, dentists, nurse practitioners, physician assistants and midwives if these are not under a supervisory relationship with a physician. Must agree to FTE Worksheet.

Field 28: Non-Primary FTE under filing TIN as of 5/31/2020

  • “Non-primary provider” includes nurse practitioners and midwives if these are under a supervisory relationship with a physician, physician assistants, CRNAs, and all other individuals providing patient care.

Field 29: Other FTE under filing TIN as of 5/31/2020

  • “Other FTE” includes all employees not directly providing patient care, e.g. scheduling, billing, and accounting.

Field 30: Number of Locations as of 5/31/2020

  • Enter the total number of locations owned or leased by the applicant as of 5/31/2020, at which the applicant and its included subsidiaries are providing patient care.

Field 31: FTE Worksheet

  • Upload the FTE Worksheet including each primary provider, NPI, and FTE. Enter the total FTE as reported in the FTE worksheet in Field 27.

Field 32: IRS Form 941 for Q1 2020

  • Upload Employer’s Quarterly Federal Tax Return on IRS Form 941 for Q1 2020, or IRS Form 940 if not required to file Form 941, or a statement explaining why the applicant is not required to submit either form (e.g. no employees).

It is not yet known how long it will be between application and payment.  HHS is working to process all providers’ submissions as quickly as possible. HHS may seek additional information from providers as necessary to complete its review. Payments will be disbursed on a rolling basis, as information is validated.  Payments will be made to applicant providers who are in the filing TIN curated list from CMS. If applicants are not on that list, HHS will establish an additional process to validate eligibility.

The majority of payments will be made through bank transfer. A smaller subset (e.g. large payments) will be required to set up ACH accounts to allow HHS to most effectively and quickly deliver funds to providers, as well as maximize program integrity and fraud avoidance. Payment via check is available, but not preferred.

All providers receiving funds from the Medicaid Targeted Distribution will be required to log in to the Provider Relief Fund Attestation Portal to accept terms and conditions of the payment within 90 days of receiving the payment.

Keep Good Records

Quarterly reports will be required for any provider receiving over $150,000 in ANY Federal Covid-19 relief which will be 10 days after quarter end.  The terms and conditions discuss providing supporting documentation of expenses and/or lost revenue, but there is no specific detail provided yet.  The attestation form includes a statement on how HHS will determine appropriate use of payments via reporting requirements including maintaining an accounting of payments, and how providers are processing payments, but there is no specific detail provided yet. Providers should be tracking expenses and use of funds so they are prepared when the reporting mechanism is in place.

The HHS guidance on the general distribution other provider relief funds has been ever changing and often conflicting. HW&Co. is here to assist you in any way we can.  Please visit the HW&Co. Current Events Center on our website for additional resources. HW&Co. is here to assist you in any way we can. Please contact us if you need assistance.

Disclaimer:  Information in this article is subject to change and is based upon our current understanding as of the issue date.  This is a constantly evolving process as HHS has been issuing new or changed guidance on a frequent basis.