Geoffrey R. Kaiser, Esq.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act created a $175 billion Provider Relief Fund (“PRF”) for expenses and lost revenues attributable to the coronavirus pandemic.  Those funds are being disbursed through “General” and “Targeted” distributions.  Significantly, all providers retaining funds must sign an attestation and accept the terms and conditions associated with payment, and keeping the funds after 90 days is viewed as acceptance of those terms and conditions. Further, the Department of Health and Human Services (“HHS”) stated that it reserves the right to audit Provider Relief Fund recipients in the future and collect any PRF amounts that were used inappropriately. The requirement that providers agree to specific terms and conditions in accepting funding immediately raises the prospect that the government might not merely request that funds improperly obtained or utilized be returned, but that may also pursue providers under the False Claims Act (“FCA”) for accepting funding under false pretenses.  If that happens, the provider may be liable for up to three times the amount of the funding accepted plus civil monetary penalties, and those who uncover and bring such FCA cases on behalf of the government are eligible to receive 15%-30% of any recovery.

Among other things, a provider must certify (1) that it was eligible to receive the funds (because it providers or provided after January 31, 2020, diagnoses, testing, or care for individuals with possible or actual cases of COVID-19); (2) that the funds were used as permitted (i.e., to prevent, prepare for, and respond to coronavirus); (3) 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 (4) that for care provided to actual or presumptive COVID-19 patients, it will not engage in prohibited balance billing by charging a patient an amount greater than what the patient would otherwise be required to pay to an in-network provider. Violating any of these conditions could create a predicate for the government to argue that the provider violated the FCA.

HHS has stated that it will have significant anti-fraud monitoring of the distributed funds and will provide oversight as required in the CARES Act to ensure appropriate use of the money.  Therefore, providers who accept money without being eligible or use money in unauthorized ways run a risk that their behavior will come under scrutiny.  The guidance identifies various expenses and lost revenues that are considered eligible for reimbursement.  Some qualifying expenses include: 

  • supplies used to provide healthcare services for possible or actual COVID-19 patients; • equipment used to provide healthcare services for possible or actual COVID-19 patients;
    • workforce training;
    • developing and staffing emergency operation centers;
    • reporting COVID-19 test results to federal, state, or local governments;
    • building or constructing temporary structures to expand capacity for COVID-19 patient care or to provide healthcare services to non-COVID-19 patients in a separate area from where COVID-19 patients are being treated; and
    • acquiring additional resources, including facilities, equipment, supplies, healthcare practices, staffing, and technology to expand or preserve care delivery. 

Qualifying “lost revenues” attributable to coronavirus may include revenues lost as a consequence of fewer outpatient visits, canceled elective procedures or services, or increased uncompensated care, and may use the funding to cover any cost that the lost revenue would otherwise have paid for, provided that the cost is one which prevents, prepares for or responds to coronavirus. Examples of such costs might include employee or contractor payroll, employee health insurance, rent or mortgage payments, equipment lease payments and electronic health record licensing fees.  When the health emergency is over, providers also are expected to return any unused PRF money that they were unable to spend on authorized expenses or losses.  If the provider uses the funding for unauthorized categories of expenses and revenues that are unrelated to COVID-19, there is always the potential for FCA liability.

Given the enormous amount of funding allocated to the PRF and rushed into the marketplace, it is inevitable that unscrupulous providers will seek to take advantage of the program through fraud.  If you have information concerning any such fraud schemes, Kaiser Law Firm, PLLC will be happy to assist you in evaluating the merits of the case.  Just call toll free at 844-800-6657 or complete an email contact form on our website: https://kaiserfirm.com/contact-us/

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