During the early days of the COVID-19 pandemic, the government enacted the CARES Act.  The CARES Act includes a Provider Relief Fund (“PRF”) of more than $100 billion.  The PRF reimburses eligible providers for healthcare-related expenses and lost revenue attributable to COVID-19.  Chilivis Grubman attorneys have cautioned CARES Act and PRF recipients about the government’s strict oversight of Cares Act funds.  

There are a host of applicable terms and conditions with which all PRF recipients must attest to complying.  One example of such a condition is the requirement that PRF recipients submit documentation to substantiate that PRF funds received were used for healthcare-related expenses or lost revenue attributable to COVID-19.  To assist recipients with compliance, HHS maintains a webpage dedicated to frequently asked questions (“FAQs”) on various compliance-related issues.  HHS’ responses to the FAQs provide recipients and compliance professionals with valuable insight on HHS’ interpretation of PRF provisions and expectations of PRF recipients.  However, HHS frequently modifies its responses to FAQs, so vigilance is key.  

On March 31, 2021, the HHS modified several responses to its FAQs related to the following terms and conditions of PRF funds:  

1.Whether HHS intended to recoup payment made to providers not tied to specific claims for reimbursement.

Response: HHS noted that PRF terms and conditions require that recipients can demonstrate that lost revenues and expenses are attributable to COVID-19, not including expenses reimbursed by or reimbursable from other sources.  HHS noted that it may audit recipients to ensure compliance with PRF requirements.  PRF payments made in error, that exceed lost revenue or expenses due to COVID-19, or that do not otherwise meet PRF requirements must be returned and HHS may recoup improper funds. 

2. Whether there is a deadline for providers to use PRF funds.

Response: HHS noted that PRF funds “must be expended no later than June 30, 2021.”  HHS acknowledged that it has not provided PRF recipients instructions on returning funds, but explained that such instructions would be provided in the future.   

3. Whether a provider must have incurred eligible expenses and losses higher than PRF payment received to accept a payment. 

Response: HHS explained that when a provider accepts PRF funds, the provider need not be able to provide that lost revenues and expenses from COVID-19 met or exceeded their PRF payment (excluding those expenses reimbursed or reimbursable by other sources).  However, HHS cautioned that it may perform audits and recoup funds. 

4. What oversight and enforcement mechanisms will HHS use to ensure providers meet the Terms and Conditions of the Provider Relief Fund? 

Response: HHS explained that it monitors and oversees the PRF funds and disbursement of such funds.  HHS’s Office of the Inspector General, which investigates fraud, waste, and abuse, may also review PRF funds disbursements. 

HHS also recently modified responses to FAQs related to ownership structures, financial relationships, and the use of funds.  PRF recipients should carefully monitor HHS guidance and resources, including the FAQs section of the website for important compliance information related to PRF.  

The attorneys at Chilivis Grubman – which include a former federal prosecutor – represent businesses and individuals in connection with government investigations and audits, including those conducted by HHS-OIG and the DOJ.  If you need assistance with such matters, please contact us today.