We previously released a law bulletin on the U.S. Department of Health and Human Services (HHS) announcement regarding the next tranche of Coronavirus Aid, Relief, and Economic Security (CARES) Act provider relief fund payments. In response to questions, HHS has now further clarified eligibility for the phase three general distribution.

To be eligible to apply, HHS has said the applicant must meet one of the following criteria:

• Directly billed their state Medicaid/Children’s Health Insurance (CHIP) programs or Medicaid managed care plans for health care-related services during the period of Jan. 1, 2018 to March 31, 2020, or own (on the application date) an included subsidiary that has either directly billed their state Medicaid/CHIP programs or Medicaid managed care plans for health care-related services during the period of Jan. 1, 2018 to March 31, 2020.
• Been a dental service provider who, as of March 31, 2020, has either (i) directly billed health insurance companies for oral health care-related services, or (ii) owns (on the application date) an included subsidiary that has directly billed health insurance companies for oral health care-related services.
• Be a licensed dental service provider who does not accept insurance and has, as of March 31, 2020, either (i) directly billed patients for oral health care-related services, or (ii) who owns (on the application date) an included subsidiary that does not accept insurance and has directly billed patients for oral health care-related services.
• Must have billed Medicare fee-for-service during the period of Jan. 1, 2019 and March 31, 2020.
• Been a Medicare Part A provider that experienced a change in ownership that was approved by the Centers for Medicare & Medicaid services by Aug. 10, 2020 and billed Medicare fee-for-service during the period of Jan. 1, 2019 to March 31, 2020.
• Been a state-licensed/certified assisted living facility as of March 31, 2020.
• Been a behavioral health provider who, as of March 31, 2020, has either (i) directly billed health insurance companies for health care-related services, or (ii) owns (on the application date) an included subsidiary that has directly billed health insurance companies for health care-related services.
• Been a behavioral health provider who does not accept insurance and has, as of March 31, 2020, either (i) directly billed patients for health care-related services, or (ii) who owns (on the application date) an included subsidiary that does not accept insurance and has directly billed patients for health care-related services.
• Received a Targeted Distribution payment.

Additionally, the applicant must meet all of the following criteria:

• Have either:
  • Filed a federal income tax return for fiscal years 2017, 2018, or 2019 if in operation before Jan. 1, 2020 or quarterly tax returns for fiscal years 2020 if operations began on or after Jan. 1, 2020, or
  • Be exempt from the requirement to file a federal income tax return and have no beneficial owner that is required to file a federal income tax return (e.g. a state-owned hospital or health care clinic).
• Provided patient care after Jan. 31, 2020.
• Must not have permanently ceased providing patient care directly, or indirectly through included subsidiaries.
• If the applicant is an individual that was providing patient care, have gross receipts or sales from providing patient care reported on Form 1040, Schedule C, Line 1, excluding income reported on a W-2 as a (statutory) employee.

Providers who have previously received a payment under phase one or phase two of the general distribution are eligible to apply for payment even if they have previously received a disbursement of 2% of annual revenue from patient care. Providers who have not previously received a general distribution payment or an amount less than 2% of patient care revenue may also apply for funds if they meet the above eligibility criteria.

Providers were able to begin applying for funds on Oct. 5 and can submit applications through Nov. 6, 2020 on the HHS provider relief fund portal. HHS is urging all eligible providers to apply early to expedite HHS’s review process and payment calculations and accelerate the distribution of all payments.

All recipients must accept the terms and conditions associated with the phase three general distribution payment. There are also reporting requirements for most recipients, which we previously summarized here.

Please contact an attorney in the Health & Life Sciences Group if you have any questions about this new distribution or anything else regarding your receipt or use of Provider Relief Fund payments.

Please visit our COVID-19 Toolkit for all of Taft’s updates on the coronavirus.