HHS Distributes $30 Billion to FFS Medicare Providers - McDermott+Consulting

HHS Distributes $30 Billion to FFS Medicare Providers

On April 10, 2020, the US Department of Health and Human Services (HHS) began distributing $30 billion from the $100 billion Public Health and Social Services Emergency Fund to Medicare fee-for-service (FFS) providers. The Coronavirus Aid, Relief, and Economic Security (CARES) Act established the fund to provide financial relief and support for healthcare providers affected by the Coronavirus (COVID-19) pandemic. Since its original announcement on April 10, HHS has clarified that to be eligible for payment the recipient does not have to provide care specific for treating COVID-19. They broadly view every patient as a possible case of COVID-19.

HHS used 2019 Medicare FFS revenues as both a proxy for allocating the CARES Act Provider Relief Fund and a means for distributing payments quickly. The formula used by HHS generally translated to 6.2% of an eligible recipient’s 2019 Medicare FFS revenue. Providers who accept the funds must agree to a set of terms and conditions within 30 days of payment. Note that the terms and conditions will be available for attestation through a portal, and that portal is not yet available. The current version of the terms and conditions may be subject to further modification.

Since HHS used 2019 Medicare revenues as both a proxy for allocating funds and a means for distributing funds quickly, providers with little or no Medicare FFS revenue were disadvantaged by this approach. HHS indicated that the distribution of the remaining $70 billion will focus on providers in hotspot COVID-19 areas, rural providers and providers that may not have been eligible for this first round of funding, including providers with lower shares of Medicare reimbursement or that predominantly serve the Medicaid population.

Stay up-to-date on COVID-19 emerging issues through the McDermottPlus Coronavirus Resource Center.


For more information visit the McDermottPlus Payment Innovation Resource Center or contact Sheila Madhani at 202-204-1459/smadhani@mcdermottplus.com or Mara McDermott at 202-204-1462/mmcdermott@mcdermottplus.com.