Health Care Alert: HHS Stimulus Payments Have Terms and Conditions

By now, many health care providers have received a nice “bonus” in their bank accounts from the U.S. Department of Health and Human Services (HHS) via an EFT transfer which hit most accounts this past Friday morning, April 10, 2020. The ledger entry likely states “HHS Stimulus”. While this seems like a much-needed cash boost in this unprecedented time of the COVID-19 crisis, make sure you review the HHS Terms and Conditions on the use of these funds.

On March 27, 2020, President Trump signed into law the CARES Act which provided $100 billion in funding for health care providers for impacts resulting from the coronavirus pandemic. Thirty billion of those dollars was distributed last week to eligible health care providers by direct deposit to their CMS EFT accounts—the same accounts into which a provider’s Medicare checks are deposited. Although these are not loans and do not need to be repaid to HHS, there are terms and conditions of their use.

HHS provides a Terms and Conditions sheet which all provider recipients should read. Some of the key requirements are more obvious and likely assumed on the part of most providers. However, here are some key terms and conditions for which you will want to take special note or action:

• Must be currently providing diagnoses, testing, or care for individuals with possible or actual cases of COVID-19; and
• Certify that the Payment will only be used to prevent, prepare for, and respond to coronavirus, and [this Payment] shall reimburse the Recipient only for health care related expenses or lost revenues that are attributable to coronavirus; and
• Certify that it will not use the Payment to reimburse expenses or losses that have been reimbursed from other sources or that other sources are obligated to reimburse; and
• Submit reports to the HHS Secretary as needed to justify the use of the Payment; and
• If the provider’s Payment amount is greater than $150,000, report to the HHS Secretary no later than 10 days after each calendar quarter, a report that includes:
  • The total amount of funds received under any of the COVID-19-related relief funds; and
  • The total amount of those funds expensed, including a detailed list of the projects and purposes for which that Payment was used (e.g. PPE, operational cash losses). 

These terms and conditions essentially require you to account to the HHS for each dollar expensed. Thus, we recommend that you move these funds into another account that allows your practice or health care business to trace the funds expensed separately and intentionally for the permitted uses provided.

As we’ve seen, the number of relief funds and laws that have been passed in this pandemic situation have created an overwhelming amount of information, much of which is either confusing or vague. Brouse has a team of health care attorneys who can help you navigate through this time. We also have many other experienced attorneys in other practice areas such as tax, employment, and litigation who are available to work with your business and help you ride this storm. Stay well.