Physicians have had many questions about Provider Relief Fund grants authorized under the CARES Act. Some of the original formulas posted on the Department of Health and Human Services (HHS) website led some physicians, who did their own calculations, to believe they received more money than they were entitled to and worried about its recoupment.
HHS removed the formula and overpayments language from the portal last week to allay concerns from physicians who had done their own estimates and reached conclusions about potential overpayments instead of relying on HHS to do the calculations. On May 15, HHS posted revised FAQs on the Provider Relief Fund General Distribution Portal. The following two questions/answers were developed specifically to clarify this issue.
How did HHS determine the additional payments under the general distribution?
HHS is distributing an additional $20 billion of the general distribution to providers to augment their initial allocation so that $50 billion is allocated proportional to providers' share of 2018 net patient revenue. The allocation methodology is designed to provide relief to providers, who bill Medicare fee-for-service, with at least 2% of that provider’s net patient revenue regardless of the provider’s payer mix. Payments are determined based on the lesser of 2% of a provider’s 2018 (or most recent complete tax year) net patient revenue or the sum of incurred losses for March and April. If the initial general distribution payment you received between April 10 and April 17 was determined to be at least 2% of your annual patient revenue, you will not receive additional general distribution payments.
How can I estimate 2% of patient revenue to determine my approximate general distribution payment?
In general, providers can estimate payments from the general distribution of approximately 2% of 2018 (or most recent complete tax year) patient revenue. To estimate your payment, use this equation:
(Individual Provider Revenues/$2.5 Trillion) X $50 Billion = Expected Combined General Distribution.
To estimate your payment, you may need to use “Gross Receipts or Sales” or “Program Service Revenue.” Providers should work with a tax professional for accurate submission.
This includes any payments under the first $30 billion general distribution as well as under the $20 billion general distribution allocations. Providers may not receive a second distribution payment if the provider received a first distribution payment equal to or more than 2% of patient revenue.
NOTE: HHS is making a list publicly available of the providers who have received and accepted money from the Provider Relief Fund.
We believe it is key for each practice to clearly document revenue losses and expenses it is incurring that are directly related to COVID-19. Documentation could include losses related to social distancing (such as cancellation of visits and procedures, Part B drugs that have passed their expiration date), costs of new infection control practices, PPE, digital health equipment, etc., and those that are not reimbursable from other sources (excluding loans that have to be repaid).