Provider Relief Funding –
$50 Billion Payment Formula
& Net Patient Revenue

Over the past few weeks, the U.S. Department of Health & Human Services (HHS) has worked to issue $50 billion designated for general distribution from the CARES Act Provider Relief Fund to Medicare facilities and providers impacted by COVID-19. The established basis of payment to eligible providers was 2018 net patient revenue.
 
In an effort to quickly disburse funding, the HHS issued payments via two separate distribution processes. 
 
  1. The initial $30 billion general distribution began on April 10, 2020, and was based on a providers' share of Medicare fee-for-service reimbursements in 2019, which represented data quickly on-hand and available enabling rapid distribution.
  2. The HHS indicated the remaining $20 billion distribution began on April 24, 2020, and is being allocated in a manner so that when added to the $30 billion initially distributed would result and account for a provider’s total proportion of the $50 billion based on 2018 net patient revenue. Based upon additional follow-up, it appears the 2018 net patient revenue is being determined based upon December 31, 2018 and June 30, 2019, Medicare Cost Reports.
 
The latter funding process will continue weekly. Certain providers will receive automatic payments based off of the CMS Medicare cost report revenue data, and other providers without adequate cost report data on file will need to submit their revenue information. A portal will be established on the HHS website to facilitate this process. Any Medicare provider seeking or receiving funding will be required to submit their revenue information on the portal for verification. Details of funding distribution, related terms and conditions, application for additional Provider Relief Funds, and applicable portals can be found at  https://www.hhs.gov/provider-relief/index.html.  
 
  • Have you estimated lost revenue related to COVID-19? 
  • Have you assessed the adequacy of 2018 revenue data from your Medicare cost report?
  • What amount of total funding relief can you expect from the $50 billion distribution?
  • Do you understand the payment formula and calculations for funding?
  • If you have received funds from the $50 billion general distribution, have you considered applying to receive allocation of the remaining general distribution funds?
If you need help answering these questions, or have other questions, ACT can help. Please contact your ACT professional or email us at info@actcpas.com .