In the span of less than 90 days, the United States government made unprecedented changes to existing regulations and authorized the injection of $175 billion of funding into the healthcare space – and they aren’t finished yet. These bold actions were taken to (hopefully) ensure that healthcare providers are able to remain open and service COVID-19 and other patients throughout the pandemic and beyond.

Below is a summary of a few key items of note for all healthcare providers.


Among other provisions, the CARES Act utilized waivers to considerably relax certain rules for various healthcare providers, on a temporary basis, to ensure that capacity can be stretched and patient loads maximized. The relaxation of certain requirements is beginning to be “rolled back”, in some respects, as of early July 2020.

Initially, $100 billion in funding was appropriated to providers. Of that total, approximately $30 billion was released the week of April 6, 2020, in the “General Distribution”, based simply on the provider’s pro-rata portion of Medicare fee-for-service reimbursement to the national total. The final tranche of “General Distribution” funds was released based on CMS data and providers’ individual requests, shifting from the original calculation to net revenues in comparison to total national net revenues for eligible healthcare providers. Further targeted allocations were made to hospitals in “hot spots” for COVID-19 activity, rural facilities, skilled nursing facilities, tribal entities, Medicaid and CHIP providers, dentists, and others.

An additional $75 billion was authorized via later legislation (often referred to as “Phase 3.5”), which has been distributed via “targeted” allocation to hospitals and other types of healthcare providers.

These funds are not loans and do not have to be repaid, assuming the funds are “spent” according to the terms and conditions found in the attestation and do not exceed lost revenues and direct and indirect expenses related to COVID-19. However, the funds do come with certain obligations. Chief among them is the requirement for a provider to attest to several items regarding the usage of the monies, comply with future reporting obligations, and maintain auditable records.

Complete details are available here, which includes the attestation form.

Accelerated Medicare Payments

As of the date of this posting, more than $100 billion of Medicare accelerated payments have been processed and released by the Medicare Administrative Contractors (“MAC”). Nearly any provider that has recently billed Medicare was eligible for advanced payments, which are exactly as they sound –prepayments for services to be performed in the future. The available amount differs based on the type of the provider, as does the repayment term. However, in all cases, accelerated payments are interest-free for a period of time.

UPDATE – due to unprecedented and unanticipated demand, the Medicare Accelerated Payment program is now closed.

Additional Legislation

As of the date of this posting, competing bills are being debated in Congress. While details are scarce and the likelihood of passage uncertain, it is considered at least possible by most observers that there will be additional funding authorized and directed to healthcare providers (most likely hospitals) in the foreseeable future.

Ongoing Reporting Requirements

On September 19, 2020, guidance was released from HHS clarifying future reporting obligations (above and beyond any federal grant “Single Audits”).  Any recipients who received payments exceeding $10,000 will be required to report on the usage of these funds through the end of calendar year 2020.  If unspent monies remain, there will be an additional reporting required through June of 2021.

The September 19, 2020 guidance also made sweeping changes to previous guidance (included in the HHS FAQs) that was being relied upon by healthcare providers of all types.  Most notably, HHS appears to be pivoting towards a focus on expenditures, with lost revenues being a secondary consideration – and subject to restrictive limits.  Providers should immediately begin to digest this information and quantify eligible expenditures, in order to determine what excess funding (if any) remains for consideration of lost revenues.  Also, lost revenues should be measured under the new criteria to determine maximum eligible amounts.  This is a complicated process, and it is likely that most healthcare providers will require outside assistance.  On a positive note, outside assistance is considered an eligible expenditure.

Additionally, HHS has clarified explicitly that these funds are subject to federal grant audits for recipients with fiscal year expenditures of $750,000 or more, including for commercial (for profit) entities.

The Office of Management and Budget (“OMB”) has yet to release its final 2020 Compliance Supplement targeted towards COVID-19 funding, which is currently anticipated for release in October of 2020. This lack of guidance is especially troubling for June 30, 2020, fiscal year-end healthcare providers (and before), as well as for-profit entities that likely have never been required to obtain such as audit in the past.  HHS will also be releasing further guidance in October of 2020, as well as holding webinars to address provider concerns.

CRI will update this post as further information is obtained, and we strongly encourage you to speak to your auditors and advisors about these matters to plan accordingly.

CRI Resources

On June 30, 2020, CRI held a Quick Hits webcast on various accounting, reporting, and other matters related to the CARES Act and Phase 3.5. This webinar explored items that are of importance to all healthcare providers, and we encourage you to view the webinar recording.

We plan to hold an additional Quick Hits webcast update in August.

These matters are evolving quickly, and we encourage you to reach out to your CRI Healthcare professional to help guide you through the resources and funding that is available to you. Thanks for all that you are doing, and we hope that you and your teams stay safe and well.