August 13, 2020

Unpacking the Provider Relief Fund

In June, the U.S. Department of Health and Human Services (HHS) announced that eligible Medicaid and Children’s Health Insurance Program (CHIP) providers could apply to the Medicaid Distribution portion of the CARES Act Provider Relief Fund. On July 15, HHS announced that this portal and an application process was open to all dentists who may not have previously been eligible to receive funding through the Provider Relief Fund.

Find it on

HHS is allowing dental providers to apply for these funds through August 28. This short timeline for availability and application, along with unclear billing, reporting and auditing requirements, has made this a leap-before-you-look pool of funds for the dental profession. If you have moved forward with your application or are planning to, there are certain terms and conditions of which you should be aware.

To start, HHS reporting systems and requirements are novel for many practice owners. You should know that if you accept these funds, your information will be public. This includes at least the name of your practice and your fund distribution amount. Given the fund distribution amount is based on 2% of revenue from patient care, the public will be able to reasonably estimate your practice revenue.

The terms and conditions, frequently asked questions, and instructions associated with these funds also lay out certain requirements to which you will be subject.

Balanced Billing: Within the terms and conditions, you agree that “for all care for a presumptive or actual case of COVID-19, Recipient certifies that it will not seek to collect from the patient out-of-pocket expenses in an amount greater than what the patient would have otherwise been required to pay if the care had been provided by an in-network Recipient.”

A presumptive case of COVID-19 is a case where a patient's medical record documentation supports a diagnosis of COVID-19, even if the patient does not have a positive in vitro diagnostic test result in his or her medical record. (This definition is found in the HHS frequently asked questions document.) It limits the applicability of balance billing to a great extent, which is good news. However, as the treating doctor, you may be responsible for collecting and assessing a patient’s medical records to a greater extent than you have in the past, and you may have limited revenue losses associated with this billing clause.

Reporting Requirements: You should also be aware the initial list of reporting requirements is not known at this time, and HHS, the Office of Management and Budget and the Office of the Inspector General can expand reporting requirements in the future. HHS has stated publicly that it will make efforts to be as user-friendly as possible. However, when you agree to the terms and conditions, you agree to provide HHS information that it deems as necessary, in such form and with such content “as specified in future program instructions.” You agree to provide “reports relating to the payment that is provided in the future at the request of the Secretary or Inspector General.” And you agree that you will “maintain appropriate records and cost documentation as described in Financial Management and Record Retention or other information required by future program instructions to substantiate the reimbursement of costs under this award.” You also agree to be audited by HHS and the Office of the Inspector General in the future.

Allowable Uses: If you accept these funds, you should understand both their allowable uses and the use that may help shield you from ongoing reporting requirements in the future. There are two categories of allowable expenses. The first is “healthcare related expenses attributable to coronavirus,” which includes supplies or equipment used to provide healthcare services for possible or actual COVID-19 patients, workforce training, and acquiring additional resources, including facilities, equipment, supplies, healthcare practice staffing and technology to expand or preserve care delivery. This category of expenses would include additional costs you incurred related to PPE, social distancing of patients, and air filtration systems. The second category of expenses are those associated with “lost revenue that [is] attributable to coronavirus.” Under this category, allowable uses are expanded to include “employee or contractor payroll, employee health insurance, rent or mortgage payments, and equipment lease payments.” Note that funds cannot be used for costs intended to be covered by other federal programs. Given the overlap between PPP-related expenses and the allowable expenses associated with lost revenue, as well as their ongoing nature, utilizing these funds for ongoing operational costs could be problematic. If these funds are used for future or historic costs attributable to COVID-19, such as PPE, social distancing and air filtration, their finite and discreet nature will make future reporting requirements less onerous. The program allows costs to be incurred at any time. So long as they are attributable to COVID-19, you can use these funds to reimburse your practice.

As a practice owner, you should be familiar with a cost/benefit analysis. As it related to these HHS funds, we have a known benefit: HHS will provide you 2% of your patient care revenue from your most recently filed tax return. However, we do not know the full costs at this time. These costs will be incurred with additional administrative time related to reporting and auditing. Your costs may extend to outside of your business if the revenue of your practice is of interest to your patients or competition.

Fortunately, under the program’s terms and conditions, there is an opportunity for you to pursue these funds and delay attesting to the terms and conditions. There is a 90-day window beginning at receipt of funds during which a dentist may retain them and not attest to the terms and conditions. At the 90-day mark, it will be presumed you accepted the terms and conditions. This 90-day window will allow dentists to monitor the development of reporting requirements and assess additional audit details to be publicized in the future. If, after seeing this information, you determine the costs are manageable to the benefits, you can move forward with using these funds, accept the terms and conditions, and document your utilization. If the reporting and auditing requirements introduce costs greater than the benefit, you may return the funds without being subject to the terms and conditions. It should be noted that the reporting and audit requirements in the terms and conditions are subject to change or expansion upon. It should also be noted that there is no definitive timeframe for when the reporting and auditing requirements are subject to sunset, except an acknowledgement you will be required to retain documentation for three years from the date of your financial expenditure.

Would you like us to speak to your study club? Our Practice Integration Wealth Management team is pleased to offer live, interactive presentations to your colleagues. We can tailor our presentations to fit your content and time requirements and deliver them via an online format. Along with a question-and-answer period, we offer all attendees the opportunity to meet with us individually should they wish to ask questions more specific to their own circumstances. We can also arrange to have your study club’s presentation earn ADA CERP credits for attendees. Contact me for more information.

Buckingham Strategic Wealth is an ADA CERP Recognized Provider. ADA CERP is a service of the American Dental Association to assist dental professionals in identifying quality providers of continuing dental education. ADA CERP does not approve or endorse individual courses or instructors, nor does it imply acceptance of credit hours by boards of dentistry. IRN-20-884

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About the Author

Thomas Bodin

Practice Integration Advisor

As a practice integration advisor, Thomas provides comprehensive financial advisory services to dental and medical offices, including tax, pension and retirement planning. He is motivated by a passion to help medical professionals connect the hard work they put into their practices with their most deeply held values and goals, all through Buckingham’s evidence-based approach to true wealth management.

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