There have been two major government sources of funding for health care providers during the pandemic: the Provider Relief Fund and the Accelerated and Advance Payments Program. Ari Markenson, Partner, Venable LLP, and Alan Schabes, Partner, Benesch Friedlander Coplan & Aronoff LLP, provide an overview of both programs and discuss issues related to fund disbursement, how providers decided to use those funds and the ramifications of those decisions, and how providers should respond to the government’s enforcement activity related to usage of those funds.
To learn more about AHLA and the educational resources available to the health law community, visit americanhealthlaw.org.
There have been two major government sources of funding for health care providers during the pandemic: the Provider Relief Fund and the Accelerated and Advance Payments Program. Ari Markenson, Partner, Venable LLP, and Alan Schabes, Partner, Benesch Friedlander Coplan & Aronoff LLP, provide an overview of both programs and discuss issues related to fund disbursement, how providers decided to use those funds and the ramifications of those decisions, and how providers should respond to the government’s enforcement activity related to usage of those funds.
To learn more about AHLA and the educational resources available to the health law community, visit americanhealthlaw.org.
This episode of A H L A speaking of health law is brought to you by A H L A members and donors like you. For more information, visit american health law.org.
Speaker 2:Well, welcome everyone. Uh, this is, uh, Ari Kinson. I am a partner at Venable in their New York office in the healthcare and, and corporate groups. Uh, I'm a member of the board of A H L A and, and I am here joined, uh, by a wonderful colleague, Alan Chavez. Alan, why don't you quickly introduce yourself as well?
Speaker 3:Sure. Good afternoon, everyone. This is Alan Chavez. I am a partner with the law firm of Bennett Freelander, and a former chair of the health law department at, uh, at Bennett Freelander. Um, have been associated with a H L A for many, many years, and was the former chair of the Long-term Care program for approximately 10 years. So, it's, it's a really a pleasure, uh, to be here this afternoon. It's a pleasure to spend some time with Ari and with all of you.
Speaker 2:Thanks, Alan. So what we're going to chat about today is, um, essentially the two major sources of dollars that, that came to providers, uh, healthcare providers during the Covid Pandemic to essentially help them survive the pandemic, right, financially. And those two major sources of dollars came in the form of the Provider Relief Fund, which essentially the largest portion of it started out from the CARES Act. And, and there was some additional dollars added to it, as well as the use of, um, what was already an existing program, the accelerated, uh, uh, payment, uh, program, as well as the, um, advanced payment program, which essentially were two programs. One for part A providers, one for part part B providers that, that c m s had to, uh, um, to provide certain dollars, essentially as to working capital lines. And we'll get into that a little bit more. Um, and they were then allowed essentially, uh, um, by the administration to use those programs for providers, uh, um, in, in, in addition to essentially the, the provider relief relief funds that were doled out. And so that's the, the basic focus of what we're gonna talk about today. Um, and, uh, Alan, if you wanna add anything right now, feel free. If not, I'll, we'll keep going. Just about the basics.
Speaker 3:Yeah. The only thing that I wanted to add, Ari, is that, uh, what we want to do on this, uh, podcast is to make this as practical for all of you as possible. Um, I'm sure that almost any everyone who is listening to this podcast is familiar with the Provider Relief Fund, um, payments that have been made over the last several years since Covid started. Uh, you may be less acquainted with the Accelerated and Advanced Payment Program, uh, but we'll talk a little bit about those programs and what they were all about. Uh, but what we, what we really will be spending a lot of our time with is that, uh, I think you can put it under the rubric of there is no free lunch with the government. In other words, uh, when the money started coming, uh, from the government, and we're talking about literally billions of dollars, uh, both Ari, I and I, and, and many, many, many other providers who work in this area, told our clients, listen, you're gonna get billions of dollars, but there's no free lunch. Um, and, uh, you need to be able to do with those funds that which the government is telling you that you can do with those funds. Because at some point in time, there will be a day of reckoning. Um, and we're gonna talk about that reckoning. Uh, on this call, we're gonna talk about the things that the OIG is doing, has done and will be doing, um, and to give it, uh, a very, very practical sense, uh, in terms of what we're all looking about, looking at and on behalf of our clients, um, in connection with these programs. So, Ari, I'll turn it back to you. Thanks.
Speaker 2:Okay. Thanks, Alan. Yeah. And just to, to, I'm gonna do a little bit of the basics of the programs, even though we sort of expect that most folks, this thing will have a sense of it. But just to get a, get a a quick overview, um, you know, so you had, starting with the CARES Act, uh, uh, the, um, essentially, uh, uh, set up of the, the Provider Relief Fund. Uh, and the Provider Relief Fund was structured in a way that if you met the terms and conditions, uh, for which the money was given to you, uh, you would not have to return the money. Okay? And, um, it was a, uh, incredible Wild West thing when it first, when the first sort of distribution came out. Um, I know Alan will remember these, these issues, uh, fondly in the sense that you got, you know, hundreds of calls from clients saying, I had this deposit into my, my, my Medicare account yesterday for, or last night for, you know,$400 million. And, and it was, it was just labeled hhs, and I have no idea what the heck this is, and what do I do with it? And, you know, and, and frankly, when I got some of the first of those calls, I went, I don't know, you know,<laugh>, like we all knew, right, that the CARES Act was passed and that this money was being allotted, but we had no idea that HRSA and H HHS were essentially going to, to, to take their first distribution. Just take a look at who was a Medicare provider recently, over a certain amount of time, and estimate what kind of money they needed, and just throw it at'em without any explanation of where it was coming from, right? Um, and then a few days later, you get kind of this information put out by, uh, uh, HRSA and h h s that, oh, by the way, that money debt you've got, here's the terms and conditions surrounding that money. Um, and by more, so those terms and conditions did in fact change over time. Um, one of the other things that, that, that is still an issue in that we'll get back to you later, is, um, the sort of development of what the statutory text around how the money was supposed to be used has sort of, you know, changed over time, right? How has it gotten, uh, uh, originally, uh, you know, the statutory tax was essentially, hey, um, any expenses used to prevent, prepare for, or respond to Coronavirus, right? So you, so that money can be used in that respect. Um, and when you originally asked, uh, the HRSA folks in h h s, what does that mean? They basically said, Hey, if you're a healthcare provider, we assume you've got something going on with Coronavirus right now, and so use the money for that. Uh, and of course, that got defined<laugh> a little bit sharper as time went on. Um, and so it's something that, that, that, uh, uh, we'll talk about a little bit more as we talk about, uh, what we really wanna get into, uh, uh, more so just sort of the ordering that's been going on, the order ordering that may go on, and, and, and how, uh, um, how the use of that money, even though, again, it's supposed to be money that you got to keep, um, how their, their sort of, uh, we now have this sort of pay and chase situation where everybody got this money, and the government's now saying, was it, did everybody use it appropriately? Um, now the other big bucket that we were gonna talk about, right, is the, the Accelerated and advanced Payment program, which was a payment program. There's regulations around it. It existed well before, uh, the, the pandemic. And essentially what it was is, is that it, it provided the ability of c m s to, um, essentially prepay or, or, or almost provide a working capital loan, although it wasn't, that's not really what it was, um, against future claims for providers. So if you were a hospital system, if you were a part B supplier, you could go to your intermediary and say, Hey, are you maced? You know, and say, Hey, I, um, I'm, you know, I'm stuck for cash. I really need cash. Can you hand me out X dollars, um, because of these ex, uh, you know, exigent circumstances, and, and then you'll recoup them to from me over time. And the, the regs provided for a very specific process in which to, uh, uh, recoup those monies over time and, and the timeframe it would take and so forth. And what essentially the administration did is that they said, we're going to specifically say, uh, uh, through guidance that an exigent circumstance under these rules is the fact that we've got covid going on right now, and providers are, are, are dealing with covid. Um, so just the fact that we have the pandemic is enough to say that there's an exigent circumstance, and you can apply for, um, accelerated or advanced payments as a provider. Now, you still had to abide by the rules around how that money would be recouped. Again, that money was not here. It goes, take it, enjoy it, do what you want with it. That money was money essentially advanced against future claims. And eventually c m s actually to, because of the fact that later legislation changed the rules around what the repayment terms would be specifically for payments given during this period. Um, c m S started to actually call the payments that were, that were under these two programs. But with respect to covid, the COVID 19 accelerated an advanced payment program, essentially caps the A a P. Um, but they really only made that distinction, as I said, because later legislation, uh, um, had changed what the normal payment terms were gonna be and allowed providers a little bit longer to have that money recouped. Um, why don't I stop there and, and see, Alan, if you've, if you've got anything you wanna toss in, those are, that's sort of the basic run of the both programs.
Speaker 3:Yeah, no, I, I agree with you. Um, and that's a good, uh, explanation of those programs. Uh, when, when Covid started, um, and, uh, everything shut down and the providers were really did not know whether they would be open the next day and what patients, if any, would be able to walk through the door. Um, and, and, and whether really they were looking at imminent collapse. Uh, the government did, uh, a, a really good job of creating a financial safety net, uh, for all types of providers, whether part A, part B, et cetera. Um, and these two programs, the Provider Relief Fund program, and the, uh, accelerated and advanced payment program were two of, of, of the programs, but not all of the programs, uh, that were created at that time to allow providers, uh, to obtain funds to continue to operate, um, under very, very difficult conditions. Now, one very significant program that we're not going to talk about today is the P PPP loan, which is the pro, um, which is the, the loan program that was coordinated with the S B A, um, and the conditions under which that loan was forgiven, et cetera. We're not gonna talk about that, uh, because that would, uh, take this podcast from the, um, allotted time and probably triple it in size. Uh, but when the monies came in, in terms of the provider relief fund, and to a lesser degree, to the accelerated and advanced payment, uh, program, uh, this was money that literally was deposited. Um, it, it, it just appeared in the account. Um, and, and the calls that we got were very much along the lines of what Ari had described, which was, okay, uh, 30 some million just appeared in my account, or$20 million at 2 million. You know, what do I do with this money? And, and how do I account for it? And do I need, do I really need this money? If I do think I may need this money, what should I do with it? Uh, should I put it into a separate account? Should I not put it into a separate account? We'll go into that in a lot more detail. Um, and, uh, what the, the threshold question that we, that we really asked our clients at that time was, do you really need this money? Um, and there were a, and again, this money appeared in their accounts. It wasn't like they, uh, they certainly, the provider relief fund money appeared in their accounts. It wasn't like, uh, uh, they had to decide whether to take it or not. It was given. Um, and, and so the threshold question that came up in, in 2020 when this whole situation started was, do I need this money? Should I keep this money? Or should I give it back? Now, as Ari described, when the money first arrived in the first phase of the, um, of, of the, uh, the, of the provider relief on general distribution, uh, there were no guidelines in terms of what you had to spend the money for other than it had to be covid related. Uh, that subsequently got clarified. And, and they were very, very specific as to the kinds of things you could spend this money on and the kinds of things that you could not spend this money on. Uh, and there were a, a small percentage of our clients in talking to pro to, uh, practitioners around the country, a small percentage of their, uh, client base that looked at their operations, looked at the way that Covid was going to impact upon their operations, and said, you know something, I don't think we're gonna need this money. And they sent it back. Now, unbelievably, at that time, but in retrospect, uh, not so unbelievably, it wasn't so easy to give that money back. Uh, it, it really was not, it had to go through a, a degree of, of difficulty that, that no one really anticipated to give that money back. Uh, but they did. And, and there were, it was, is not an insignificant number of people that gave the money back in total, or, uh, a far greater percentage of them gave some of that money back cuz they did not foresee any kind of a situation which they would need that money. Um, for example, there were a number of post-acute care providers, like home health agencies that received a significant amount of money and could not envision, uh, that they would be able to spend or would need to spend the amount of money that they received. So they gave some of that money back. Um, the vast majority of the providers who received that money, uh, called us, called people like Ari, called me other practitioners and said, okay, I got this money. Um, they're now telling me what I can and cannot do with it. You know, what's this considered to be a best practice in terms of handling this, uh, this, this money? And, uh, what we'll talk about, uh, Ari and I will be, you know, what we told our clients at that time, uh, what the smart ones did and, and what the less sophisticated people did, um, and, and what the ramifications of those decisions, uh, are today based on what we're seeing in terms of, of activity from the OIG and other investigative, uh, bodies, uh, relating to the risked in use and disposition of those funds. So, Ari, I'll turn it back to you.
Speaker 2:Yeah, Alan, you make a a great point. And, and, and just to add to, um, some of the sort of examples, you know, the, the, you had clients who, um, would, you know, a question I got asked, and not necessarily in this exact flavor, but similar enough, right? Okay. I own a primary care business and I own a dental general dentistry business. My primary care business just got 20 million last night. Honestly, they don't need it. They don't need it at all. However, my dental business can't buy ppe. They don't have a, they don't have enough money for it. They, they're, they, they're having a hard time making patients comfortable coming in. They really need the money to keep the lights on. And I heard that eventually dentists would be able to get money. So can't I just give the, the, the money that came to the primary care business over to the dental business? And the answer of course, is absolutely not right.<laugh>, um, that doesn't work that way. Uh, but you had a lot of folks essentially saying, Hey, we got all this free money. Can't we just use it how we want to use it? Um, and, and, uh, you know, a lot of us were advising clients. No, you know, it's, it's not as if, you know, even when you looked at the original, sort of very vague statutory text of how this money was to be used, if a client called you and said, you know, I kind of don't need this money, but I've been wanting to make this acquisition, can I just do that? Well, no, that's not covid related, right? Just on a basic level. Um, and so that wouldn't be appropriate. And, and so we did have a, a lot of conversations about that. And I think that when Al and I start to, we will soon start to get into a conversation about kind of, you know, the ordering that's going on and the look backs of how the money was used, those kinds of things. There are gonna be people who made those kinds of decisions without talking to their lawyers or their consultants who are gonna find themselves on the wrong side of an audit, right? Um, you know, it just did not use the money in the way in which it was intended, even at the most basic level. Um, with that said, let me segue into what I think what I hope is gonna be our, our portion of the this conversation where we kind of talk about those issues, the audit issues and what's going on and, and, and getting into kind of lessons that folks should think through. Um, but before I do that, I wanna explain one quick thing about the CARES Act. The CARES Act required OIG to report back to Congress about several different things in respect to the Provider Relief fund. How was the money used? Essentially, how did the h h s agencies, you know, deal with the money appropriately? Uh, very comprehensive report essentially to, to the corporations committee on, on, you know, what happened to the PRI REVITAL Relief Fund, uh, and how it was, it was due to be, you know, uh, uh, uh, given over to Congress about, in about three years from, from, uh, uh, the enactment of, um, the CARES Act. And there's some other reports that were required by H H S as well with respect to the use of the funds. And that, that requirement, right, that congressional requirement on OIG led to, uh, uh, uh, and, you know, and also, by the way, to be clear, OIG was also appropriated a significant amount of money in the CARES Act as a stray appropriation to not only make that reporting, but to do whatever it thought it needed to do in terms of overseeing the use of dollars, right? And so you have, and Al and I have talked about this the other day, you've got, um, in the OIG G'S work plan that's been around for a couple years now, in terms of what they've been adding to it, a whole host of things that the O I T has been doing, but look at issues around how the money was used. Uh, now, interestingly, and Al you, you probably wanna comment on this, there's one thing that's notably absent from what they've been doing. Um, and you mentioned it to me the other day, and hopefully you won't recall, and you can jump in and talk about that if you want to.
Speaker 3:Interestingly, um, when the, the, the monies were, were, were sent out, um, there was always an expectation, uh, and there was an announcement that the OIG would, uh, review on a retrospective basis, um, the receipt and disposition and use of those funds. Um, our clients who, who called us<laugh>, in other words, those who never called us, uh, but the clients who called us, you know, and asked us what they should do with these funds. Again, after we went through the, the, the decision process of whether they could, they needed the funds and whether they had received more money than they could ever hope to spend on COVID related issues, uh, once they decided that the amount of money that they had in their accounts, uh, was an amount they, that they could potentially spend for the permitted purposes, uh, the advice that we gave to our clients, and again, you will not find this advice in any ad, uh, a advisory by the, by the government, uh, or by the oig, uh, was to put it into a separate account that was opened by the provider. And as Ari pointed out earlier, there, there was no such thing as moving the money around from one provider entity to another provider entity. That was an absolute no no. Again, it wasn't clear at that time, you know, whether that was something that could be done or not, but it was ultimately became clear that you could not move it from provider to provider. Uh, but the best practice clearly was at that time. And the advice that Ari and I and others gave was, take that money, take it out of whatever Medicare account it is, put it into a separate account, uh, retain either internal resources, which almost was rarely ever the case, uh, but retain an outside resource, usually an auditor or an accounting firm or something like that, to track the expenses that you are going to, to spend out of that account, uh, together with substantiation for those expenses. Because at some point down the road, you're going to get a letter from the, uh, from, from the, from the Mac, from the administrative contractor, or from or from C M s or from a UIC who knows what at that time, um, that, that will ask you how you spent that money and to give substantiation for doing so. Now, clearly there was a reporting requirement, but that was not necessarily what, what was going to be, uh, the, the kind of information or the kind of substantiation you were going to have to show in the event of an audit. And there were many, many, uh, providers that did exactly that. They took it out of their operating account, put it into a separate account, hired someone to watch that account, and to make sure that the appropriate substantiation was there for the expenses that they were going to draw out of that account. And, you know, in recent months when, when C M s, um, or other auditors of the government have sent out letters saying, you know, you received$5 million, 10 million, 25 million, you know, over this period of time, over the, the various phases of the P R F program, you know, we would like to have substantiation for the expenses for those clients that put it into a separate account, hire somebody to track that account, and there was an audit trail. This is easy, uh, because what they do is that they pull up their, their, their audit trail, pull up the audit, the audit documentation that was, was created contemporaneously sends it to the government. And I have yet to have a single client that did that, that has heard, uh, a contrary word from the government. Usually they take it, thank you very much, have a nice day. However, there was a not insubstantial group of people that didn't do that, um, that they brought, they took this money and either left it in their operating account or put it into other accounts and did not necessarily track those expenses. Uh, and now to be put it, put it in the most positive light possible are scrambling like crazy, uh, in order to be able to substantiate how they use those funds. Uh, some of them, uh, used it for dividends to the owners. Some of them used it for acquisitions. Some of them used it to expand their facilities or to remodel their facilities. Um, I know that, because that's what they told me about it. And, and there's no question that, uh, the government at, in, in the not too distant future from now are going to determine, you know, who used it appropriately and inappropriately. And there will be, uh, investigations, uh, that are already underway. There are already, uh, civil investigative demands and subpoenas that have been issued by, uh, by, by providers, uh, asking for this information. And there's no question that in the, in the months to come, I don't think it'll be weeks, but in the months to come, there will be, uh, announcements of significant settlements, uh, that have been entered into, uh, with respect to the disposition of the covid money. Uh, we are already, uh, seeing OIG G announcements, uh, some as recently as last week, uh, about providers who received a huge amount of money, not in the context of P R F funds or advanced funds, uh, but worked aggressively provided services that they knew were going to be paid by the government that were covid related, and now are, are, are being investigated for those kinds of services. We'll talk about that later in the podcast. Uh, but clearly, um, the, the, the kinds of things that they needed that a provider, uh, was allowed to use these provider relief funds in terms of the definition of allowable expenses, uh, those became crystal clear, uh, after the first phase of the money was, was distributed. And, and that's exactly the kind of audit trail that the government is expecting to see in terms of the use of those funds. Ari?
Speaker 2:Yeah, Alan, I think that, you know, the, uh, to add on to what you were just saying, the, the OIG started out with some interesting auditing in that they were basically looking internally, they were looking at, you know, did, did how did HRSA distribute and, and administer the PR RF funds? Yeah. And, and, and in interestingly, there was actually a, a kind of a little bit different conclusion that they came to, cause they also had another report where they looked at how c m s administered and collected on the, uh, you know, advanced accelerated payment program. Yeah. And not surprisingly, right, the, the, the, the HRSA distribution administration, the i g went, you know, I could have done it a lot better. Um, but frankly, if you think about it, y you know, the HRSA is a grant making organization, uh, at, at, at its best, right? And, and, and having it all of a sudden scale up to handle the distribution of these kinds of funds to so many providers was no matter what, going to end up in a a, uh, an interesting situation. Um, but then you've got c m s who already had, again, a statutory regulatory process for handling, giving a provider advanced funds and taking'em back. And so, as you can imagine, the conclusions in those two reports, you know, they differed easily, right? Because c m s knows what it's doing in new, in terms of giving somebody money and being able to recoup it, right? Um, as different from just sort of deciding how to, how to, you know, uh, uh, throw money out with a fire hose, right? And, and, um, but my real point is, is that originally OIG started with these kinds of looks at internally, how'd the government do with these monies, right? Um, but then they flip pretty darn quickly. And, and to, to both right now and certainly an expectation that we have into the future, to starting to look specifically at providers and how they use the funds, they've now got all the reporting information. Um, they, they, they're in a better position to start taking a hard look at providers. They did a whole thing on, on looking at hospice specifically, and they're still looking at hospice. Um, uh, you know, they're, they're starting to go to provider types and say, okay, let's take a look at how you use the P R F funds. Now, something that's interesting about the, uh, um, you know, coming enforcement, right, is that because of the way that the ad advanced accelerated payments program worked, you're probably gonna see a lot little, little of no enforcement, right?
Speaker 3:Yeah. I was gonna ask you, Ari, I mean,
Speaker 2:Money back, right?
Speaker 3:Interestingly, I have not seen any significant indigestion on the part of providers with respect to the accelerated and advanced payment program. You know, basically that was a program where they, they looked at the anticipated, uh, monies that you were going to receive, you know, made sure that you advanced it, and there was a very strict program for getting that money back. Um, the, the biggest issues that we have seen with respect to that program is what happens in the event that a provider shut down? What happens to that money? Uh, and, and other issues that relating to changes of ownership. I mean, that was clearly the biggest issue that arose with respect to that. Like, for example, if you sold a provider, uh, Ari and I still spend a lot of time in the post acute care world, and there were a lot of, lot of nursing homes that were, have changed hands over the years. Uh, and the question always arises, you know, what happens and who takes over the accelerated and advanced payment obligation? Uh, and the government had to give some guidance on that, and they did. And, and, uh, but by and large, in terms of an audit risk or, or, or a potential OIG investigation, we're not seeing any significant issues at this point, because, again, the guidelines for the use of that money really weren't the same guidelines as they put out with the PR r f money. Uh, the p RF money was very, very much designed, uh, to be spent for certain purposes. And, and, and the advanced payment wa and the accelerated payments were not. Um, so we're not seeing that. But with respect to the PRF money, oh, yeah. Oh, yeah, big time. Um, and, and having spoken with, uh, former, uh, uh, former members of, of the oig, uh, I should say former employees of the OIG and d oj, uh, uh, recognizing that they are very sophisticated today, uh, in terms of the algorithms that they use to determine, uh, usage and, and, uh, funds and, and appropriate, uh, uh, areas to look into, uh, they are definitely developing, if they haven't already developed significant numbers of algorithms to determine what kind of providers they should go after, it's simply not based on the, the, the people who received, or the providers that received the, the, the, the, the most significant amount of funds. Although that certainly is a significant factor, uh, but the government is very planned planful in terms of, uh, those folks that they intend to, uh, pursue with respect to, uh, vigorous audit efforts, uh, in terms of the disposition of the PR r f funds.
Speaker 2:Yeah. So you're gonna see, um, things in audits, and this is where, uh, Alan, let's try and pivot to getting in terms to some of the sort of, you know, takeaways of what you should be careful of, how you should plan, how you should be smart in terms of facing audits or, or investigations relating to the use of P R F bonds. Um, you know, look, one of the things that you're going to see simply because you were told pretty, pretty quickly after you got the funds that you couldn't double dip, right? Yeah.
Speaker 3:Let's talk about that. A yeah.
Speaker 2:If you got, if you got provider relief funds, for example, that you used, let's just say for arguments sake to provide, uh, um, uh, covid 19 testing of your employees in your health system, okay? So you use that money immediately to buy covid tests to use on your employees, okay? And there's a portion of your employees who actually have Medicare, they're over 65, and they have Medicare as their primary payer. Well, if you went and, and banked that money for those tests, but yet had those employees who had Medicare also go to Medicare to pay for those tests, right? You've got a problem that was not supposed to happen. Um, and I mean, I could come up with 20 different examples, but, but the fact is, is that if you, for example, bought some amount of, of of P P E, for example, but yet your procedures that you were doing, the the procedure payment that you were getting from a payer from a, a, a government payer right? Includes the cost of ppe, right? As part of the, the, the, the global payment for that service, right? But you're yet, you're, you're saying that no, all the, all the p p e that we bought that was used in the, the outpatient ERs, uh, ORs, right? Um, you know, came out of our, our provider relief funds, but yet you basically got double paid because you've got some portion of your bucket payment for that, for that service that pays for that P B E. Um, and so you, you, we can see folks end up being subject to, to those types of audits where, where the government's really saying, wait a minute, you know, you, you, you bucketed all this money towards this and on your, uh, you know, in your accounting, but yet you were paid for it over here. Alan, do you wanna add to that?
Speaker 3:Yeah, no, I do. Because, you know, up to this point in our conversation, Ari, we're talking about how you spent the money. Um, but what you pointed out, uh, very, very accurately was that the fo one of the foundational issues, um, with respect to, uh, justifying your ability to retain these funds that were given to a provider, um, under the P R F program, is to be able to show that those funds were necessary to be spent out of those funds, uh, and that the facility did not receive money elsewhere, uh, to defray the cost of those expenses. And because Ari's right, you cannot double dip. Um, and, and so today, uh, when clients are receiving audit requests or certainly a, a, a small subset of them, uh, CIAs con, uh, and, uh, and, um, and, uh, subpoenas, uh, not only do you have to be able to substantiate with a, with a dedicated audit trail, the expenses that you've come, that you've spent out of a particular, uh, account or accounts, uh, but you're gonna also have to substantiate the monies that you got elsewhere and whether there those funds were already and also spent to defray the cost of that, what you're trying to justify out of the, the p RF funds, uh, because as Ari said, you, you cannot double dip.
Speaker 2:Um, it's just to add to that, I mean, and you know, Alan and I could spend an entire another hour, which we're not going to do, just talking about examples of the balance billing issues, the, the double dipping that one of the is, is the balance billing issue, where a quick example, right? You're, if you were going to use PR r f funds to deal with the, what the statute allowed you to do with respect to, uh, out of network provi, uh, out of network patients, um, you couldn't then bill them, right?<laugh>, you couldn't, if you were gonna take those funds to, to cover the, the out of net worth delta on certain issues in terms of what, um, the statute allowed you to do, you, you couldn't then go out and chase the patients for the money, right? Um, and all you need is, uh, a whistleblower from your finance department to go talk to the D OJ or the OIG G GD, say, Hey, hey, you know, I was responsible for balance billing all these, you know, collecting all these, uh, uh, copays and so forth from all of these patients when the hospital had already booked, right? All of these P r F funds towards those accounts. Um, and so just, just as I said, we, we just, there's innumerable issues that could be audited and you have to be really careful about. Um, with that said, Alan, why don't we, um, uh, I'm, you know, as I said, we could talk about examples forever, but let's talk about kind of things to think about in approaching, um, the issues of, you know, and it could be whether you get a subpoena, whether you get an A A C I D, whether you just have a a, a OIG G auditor coming in to ask some questions, um, you know, let's, let's talk about kind of the, the dos and don'ts of how to approach those issues. Um, sure.
Speaker 3:So step number one, uh, is that if you, if you are a provider and you receive those funds, whether you listened, you asked the question at that time, uh, and got the advice to put it into a separate account, or if you did not put it into a separate account, if you received a, a significant amount of funds, and let's just for discussion purposes talk about more than a million dollars, and the number of providers that received more than a million dollars is very, very significant, especially those that are more institutionally based. Um, the, what you should have already done, and if you haven't done you need to do, is that you need to bring in an outside audit team, uh, to go in to figure out, uh, what kind of audit trail and substantiation and documentation, um, is there, and which can be put together, uh, to, again, to do the two things that we've harped on, uh, up to this point in this conversation, which is, number one, uh, to be able to document where those funds were spent, uh, and to show that those funds were spent for the, uh, authorized purposes under the PR r F program, the allowable expenses. And number two is to be able to show that the expenses needed to come out of that particular account, and that those expenses were not otherwise reimbursed or paid for out, out of a different source. Um, step number one is absolutely to get that done, preferably from an outside, uh, resource. Uh, now does that mean
Speaker 2:Add one thing to that, um, just that, that the, you know, what makes that step number one so important, right? Beyond doing it anyway, is, is that the rules, right? The, the terms and conditions, the rules, the guidance around how to use this money, you know, changed over time, right? And it did, and you may have, and I'm talking about the provider, right? The provider may have, then the first week it got its money, had a great conversation with its orders about what to do and how to do it, and how to keep its info, all its information and so forth and so on. But yet now that we're years past that point has never really revisited whether or not what they've done and how they've done it, right? Meets the, you know, the, the current thinking for lack of a better term, right? Um, and, uh, and that I think makes it all the more important to just go back and be sure that, um, you, you know, you're comfortable that you've got your information ducks in a row, uh, uh, in relation to, again, what's the, what's the current thinking about how those funds are supposed to be used?
Speaker 3:Yeah. I mean, look, unlike other types of payments where providers could take the position of, listen, I'll keep my head below the bunker line, and if they ask me for it, I'll deal with it, but, um, otherwise I'm not going to do this proactively or preemptively. Ladies and gentlemen, they are going to ask you for this information. This is not an if the, this is a, this is a when kind of an issue. Uh, so it is not at all too late or too soon, uh, to engage in this process of being able to create that audit trail, because sooner or later you're gonna have to provide it to a governmental agency that is looking into it. Now, the the one question that we do get asked, which is, okay, um, let's assume for the moment that I find a problem, you know, should I wait until they, uh, come and tell me that I have a problem? Or, you know, if I have discovered a problem, you know, what do I do? Uh, and that gets, this is gets into this whole issue of reverse false claims, uh, because if you have determined that you receive money that you were not entitled to, it gets into that whole issue of the 60 day, uh, requirement in terms of giving that money back. Um, and that's where experience council, you know, once you've determined that you are, you are unable to substantiate, uh, the use, uh, and justification for that money, uh, that's where you immediately need to pivot and get experience to Healthcare Council to help you figure out how you disclose that to the government quickly and within the appropriate timeframes.
Speaker 2:Yeah. No, I, I absolutely agree. I mean, and frankly, with, with this, these dollars, even if someone, uh, uh, if the DOJ or someone couldn't, couldn't connect the dots to getting you on the 60 overpayment rule, um, you'd, you'd probably end up in a false claim scenario if, you know, if essentially at some point in time you became aware of your inability to use the funds or inability to be, to, to have a right to the funds and didn't repay them,
Speaker 3:Right? Yeah.
Speaker 2:Um, and, uh, and so there, there's, you know, there's serious consequences for that. And by the way, aside from, uh, uh, these issues with the provider relief funds, the concept of you, you know, grabbing money that, you know, you're, you're, you're, you may or not be entitled to and not returning it. The, the, the, uh, doj, the OIG G in recent years has really heated up that issue in terms of using it. In many cases. There's been a couple of hospital systems in New York that have been, that have been faced with e even systems that made, um, uh, voluntary disclosures. And then in the, the sort of looking at the voluntary disclosure, all of a sudden the government's saying, well, wait a minute, when did you know about this? You know? And so I think that the, the, the fact is, is that, that the, the government has gotten very smart about pushing on when someone acknowledge that they weren't entitled to funds. Um, and so you've really gotta make sure that if you feel like, you know, you're looking at this again, and, and, and there may have been money that you used or didn't use, or don't need that you figure out how the heck to get it back and, and do a voluntary disclosure, whatever you need to do.
Speaker 3:Yeah. And, and the, in the few minutes that we have left Araria, the one, one thing that I wanna say to people is that, you know, we've talked about bringing an outside auditor. We're talking about establishing an audit trail. Uh, we have begun to see situations in which the outside auditors come in and they declare the situation to be unauditable, that they cannot come to a conclusion one way or the other. Uh, and that cannot, they cannot provide, oh, it's not necessarily like, like a clean audit in the, in its traditional accounting auditing sense, but they cannot account for those funds. Um, if that happens, uh, and it's, we've seen it happen not frequently, but we have seen it happen, uh, with some of, uh, of the providers that we represent, uh, that the, the, the best piece of advice that I can give to you at that time is that you need to sit down with experience counsel to figure out how you're gonna be able to disclose this to the government. Because if you wait, uh, the situation is not gonna get any better.
Speaker 2:Yeah. I think one last point of sort of just, uh, kind of, you know, uh, um, uh, something to think about when you're faced with someone asking you questions about how you use the funds is that, look, there is a distinction between somebody who's in the office of audit services at oig, somebody who's in the office of evaluations at oig, somebody who is from the d oj, right? It's a distinction with different types of folks who are coming to ask you questions about what happened to this money. No, no question about that. There's a difference in whether or not they're looking at this issue civilly, criminally, or if they're just basically doing research, right? Yeah. However, however, don't rely, this is really a, a, a sort of a comment for providers, right? Don't rely on your own understanding of that in deciding whether or not you answer questions and give out information, speak to your counsel, understand what the approach should be with respect to whoever you're being asked questions from, right? And how you're being asked them. Uh, um, again, it may be as innocuous as somebody at the OIG G who's just doing a, a, a research on y you know how a certain item of p p E was, was used with P R F funds, right? It was bought, bought with PRF funds. But, but, um, you really wanna be sure that that's all it is before you start filling out information and giving out documents and giving out financial information. And, and, uh, and, you know, all it takes is a, a call or two to your council to, to talk it through.
Speaker 3:Yeah. The other thing that I will talk about in terms of a best practice is that what we have seen, uh, especially with those providers that are a bit nervous, how we say in terms of, of their ability to have a clean audit trail, um, is that, uh, when we have advised to them, advise them that they should bring in an outside auditor, uh, is that those outside auditors are retained by council. Um, just like you would hire a billing and coding consultant when you think you have a problem and you have those folks being retained by counsel, so that you can, uh, keep the, uh, the results of those at least clothed with some colorable claim of a privilege, if you have that kind of a situation with respect to the disposition of these funds. And, uh, it's, it is something to consider and you should talk to your counsel about whether the auditor should be retained by your, by your counsel.
Speaker 2:Well, Alan, this has been fun. Uh,
Speaker 3:Yeah, Ari, it's been a lot of fun. Thank you very much. Uh, thank you. And, uh, I hope everyone has, uh, really, uh, learned something. Uh, this is a developing situation. Uh, there is no question in my mind, and I don't think there's any question in Ari's mind that there will be one unfortunate soul or souls, uh, that will be, uh, hung up by their thumbs, figuratively by the oig, uh, and, uh, shown to the government about, shown by the government to the provider community, how serious they are about this. So hopefully it won't be you or your client. Uh, but thank you every much everyone for listening today. Take care. Thanks, Alan.
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