In this podcast, Susannah Gopalan, Partner, Feldesman Tucker, Harvey Tettlebaum, Partner, Husch Blackwell, and Camille Lockhart, Partner, BKD talk about how long term care facilities can ensure compliance in their use of emergency pandemic funding, including the specific requirements of the Provider Relief Fund and audit and documentation tracking. The podcast also discusses financial impacts on the long term care sector of the COVID-19 pandemic. From AHLA's Post-Acute and Long Term Services Practice Group.
To learn more about AHLA and the educational resources available to the health law community, visit americanhealthlaw.org.
In this podcast, Susannah Gopalan, Partner, Feldesman Tucker, Harvey Tettlebaum, Partner, Husch Blackwell, and Camille Lockhart, Partner, BKD talk about how long term care facilities can ensure compliance in their use of emergency pandemic funding, including the specific requirements of the Provider Relief Fund and audit and documentation tracking. The podcast also discusses financial impacts on the long term care sector of the COVID-19 pandemic. From AHLA's Post-Acute and Long Term Services Practice Group.
To learn more about AHLA and the educational resources available to the health law community, visit americanhealthlaw.org.
Hello, my name is Suzanne Vans Gopalan. I practice in the healthcare fields at Feldman Tucker Lifer Fidel in Washington DC and I'm a member of the Post-Acute and Long-Term Services Practice Group at ala. Lately, the Practice Group has been focused on how we can quickly get information out to ALA's membership to support long-term care providers who are on the front lines of the fight against the Coronavirus pandemic, trying to protect their residents and keep their operations going. We're really glad you're listening to our podcast today entitled Streams Attached How Long-Term Care Facilities can be compliant in using funds under the COVID 19 Provider Relief Fund. Most long-term care facilities have received money under one or more of the Provider Relief Fund programs, and we plan to talk today about what this is, how the federal government has distributed the funds, and most importantly, what the providers need to know about documenting their use of the funds and complying with reporting and auditing requirements. Before we start our discussion today, I wanted to thank a H L A for hosting this podcast, and I particularly want to thank our experts, Harvey Tettlebaum of the Law Firm Hush Blackwell and Jefferson City, Missouri, and Camille Lockhart of the Accounting and advisory firm. B K B Harvey is, um, a member with me of a H L A PALS Practice Group. He has 50 years of health law experience across the entire healthcare spectrum, um, from primary care to acute and post-acute care. And he works extensively with long-term care facilities on issues relating to their response to Covid 19. I understand he's been doing this with Camille Camille Lockhart, who advises long-term care providers, um, more on the accounting and advisory side. She at bkb provides audit and consulting services to long term care facilities, um, and also home health and hospice agencies. Her experience includes leading audit teams for long-term care providers, and she also advises on Medicare and Medicaid reimbursement matters. Camille and Harvey, thank you both so much for, for participating in the podcast today.
Speaker 2:Thank you. Our pleasure.
Speaker 1:So shall we get right into it?
Speaker 2:Sure.
Speaker 1:So Harvey, I wanted to ask you for the broad, um, outlook right now, recognizing this requires some generalizations given what a, a diverse sector this is, what do you see as the most significant covid related financial impacts on the long-term care sector right now?
Speaker 2:Well, I think there're short-term and long term, uh, impacts the short-term, I think are staffing and census. There's been a tremendous loss of Medicare revenue because of the absence of elective surgeries, which, uh, were done on parts of the body that required, uh, physical rehabilitation in long-term care facilities. And that was re that's reimbursed by Medicare. So that's, uh, prevented facilities from having that revenue stream. And of course, with the covid in, uh, pandemic, uh, there's been exacerbated what had prior to that actually been a staffing shortage for facilities in most parts of the United States because persons are, uh, reluctant to come and work at long-term care facilities because they hear about the concentration of infection, uh, at long-term care facilities. Um, the long-term aspects, I think are being able to figure out if you're going to be able to actually benefit from the money that the Congress has appropriated, which we'll be talking about in a few minutes, and, uh, what actions are needed in order to be able to keep the money that you actually have received. And again, we'll cover a little bit of that I think, on our podcast later on.
Speaker 1:Great. And recognizing this is a bit of a tangent from our main topic, I'm curious what you're seeing about how the facilities are responding to the staffing shortages right now.
Speaker 2:Well, there are a number of ways they're responding. They are, uh, increasing the compensation. They're giving bonuses. Uh, there are some efforts in some states going on to, uh, create arrangements with hospitals which have actually been laying off people because of the absence of elected sur elective surgeries. And to see whether there could be arrangements where those employees could be leased to long-term care facilities. We've been working on some of that in our state, uh, trying to get arrangements like that done. So I think those are some of the ways that facilities have been, uh, dealing with these staffing shortages.
Speaker 3:And I'll add to that, I'll add to that, um, Susanna, that there's some states too that are, uh, pushing money to facilities directly to the employees, um, where a lot of this money that we're gonna talk about today goes directly to the providers. There are some states that are getting it straight to the employees for that hazard slash incentive retention
Speaker 1:Type of funding. Oh, right. Through through Medicaid emergency state plan amendments, for example, where the Yes. Right. Yes. Interesting. Well, it's moving our focus to the, the emergency funding sources. Um, so as, as we're all aware, Congress has enacted several COVID stimulus packages, and HHS has issued a lot of guidance in rulemakings affecting almost every aspect of how providers are, are responding to this crisis. Camille, what of the new initiatives and funding streams do you think are most helping long-term care facilities right now?
Speaker 3:Well, I think you could, um, if you wanna look it up from an administrative perspective, uh, while we're not discussing the PPP loans, um, initially it was the P P P loans. This was the easiest money to get, and administrative administratively the easiest to be able to keep. But you know, now that we've seen the healthcare provider relief funds coming through hhs, you know, these three different, uh, tranches if you will, or deposits that people have seen, most and most people in the senior living business saw all three, um, you know, those funds. You didn't have to go through an application to get it like you did with the PPP loan. They just got deposited in your account. And, um, and of course, what we're here to today to talk about is how, how that happened and how do you work to justify keeping it
Speaker 1:Right. Yes. And, um, moving to the, um, to the legal underpinnings of this, um, as we are mostly<laugh>, mostly lawyers we're, we're addressing here and two thirds lawyers in this present conversation. Um, um, let's talk about the provision, the statutory provisions that created the provider relief fund. I understand the authorization comes for the initial provider relief fund. Um, amounts enacted in, in March comes from the Coronavirus Aid Relief and Economic Security Act, which is referred to as the CARES Act. Uh, Harvey, how much was appropriated UN under this law for the Provider Relief Fund?
Speaker 2:There was a hundred billion dollars appropriated under the CARES Act. Uh, there's the Public Health and Social Services emergency fund,$70 billion, uh, of that has been sent and that 50 billion of general distributions was distributed. So let me break this down. There was 30 billion distributed starting April 10th, and the money hit people's, uh, provider's accounts at various different times, but it started April 10th, and then there was 20 billion distributed starting April 24th. And then subsequently, and more recently, 4.9 billion was distributed on May 24th, uh, to long-term care facilities participating in the Medicare program. Uh, if you are a Medicaid only long-term care facility, you did not receive any of that money. Uh, the other amounts include targeted distributions. Uh, 12 billion for covid hotspots, 10 billion for rural hospitals, and 50 million for Indian Health Service. And the remaining 22.5 billion, uh, will be allocated based on uninsured treatment of covid patients. And there's an additional 75 billion to be allocated, uh, as, uh, the, uh, as the government sees fit.
Speaker 1:Great. And did I understand from what Camille said that for the majority of these distributions, there is no application needed. The funds have simply been dropped into the provider's account?
Speaker 2:That's correct. But, uh, there are, at the stations that have to be made, there are terms and conditions which apply to all of these funds that must be complied with. Uh, these terms and conditions have been changing from tranche to tranche of money, uh, right. So as well as the atest station. So it's, uh, it's something you have to pay attention to. Uh, it's not just, uh, if you have your money, you can keep it, uh, you have to comply with the rules.
Speaker 1:Right. Seems like a nice problem to have to see, um, hundreds of thousands of dollars drop into your account and<laugh>, uh, not have had to apply for it, but it can also be a bit of a, uh, a maze I gather to, to understand what terms are associated with, with which disbursement that the provider received.
Speaker 2:That's correct.
Speaker 1:So Harvey, you mentioned a general distribution, um, of, of 50 billion, I think you said. Um, on what basis did HHS award money to providers under that general distribution?
Speaker 2:It was, uh, awarded based upon your, uh, your, uh, Medicare billings. And, uh, that was the reason why, uh, much more money went to hospitals than went to long-term care facilities. Uh, then there were the, the, there were additional funds that were based upon, uh, o other factors, but the initial money was based upon your, uh, the amount of money that you were paid by Medicare.
Speaker 1:Got it. And I, I, this was a part of the whole thing I I found somewhat confusing. There was the initial 30 billion tranche, which is part of this 50 billion general distribution, um, that was based on the Medicare fee for service billings in 2019. And then I gathered the remaining 20 was based on what, what they called net patient service revenues. Um, correct. I was, yes, I was a, I, I confess, I don't really understand what that amounted to and if it, if it was meaningfully different standard.
Speaker 3:I think really what they were doing from that perspective, when the, when the first tranche got paid, it was based on Medicare receipts, and they knew that these providers weren't all just providing services to Medicare. And that there are providers out there that have a, that have a larger population of non-Medicare, um, of patients that they take care of. And so on that second tranche, what they did is they went to the, the one thing that they did have access to, and that was total revenues of a provider. And they can get that off of the Medicare cost report on Schedule G three, which is basically the starting point of the income statement, if you will, within the cost report. And so there's a line in there that, that, that shows what net patient service revenue is. And so what they did is they looked at that number, did a calculation, which was basically about 2% saying, we're gonna pay out, we're gonna use of these provider relief funds, we're gonna use 2% of their net patient, give them 2% of their net patient service revenue, but then we'll subtract whatever that calculates to be, we'll subtract what came in the first tranche. And so I
Speaker 1:See, okay. So
Speaker 3:That was the concept that was being used there.
Speaker 1:Great. And, and for, for, um, this is all, uh, skilled nursing facilities of course have cost reports, but for providers who don't have cost reports, I wonder how they handled that.
Speaker 3:Well, most of this has been all based on Medicare. Um, you know, the original tranche is based on Medicare fee for service payments. So I mean, most of those people will be providing will be, you know, they have to prepare cost reports.
Speaker 1:Right, right. Um, and do you have a sense of what portion of these funds went to long-term care facilities from the dis from the general distribution as opposed to hospitals and other provider types?
Speaker 2:Yeah, really relatively, very little. Most went to the hospitals for the reason I previously stated. Um, uh, but, uh, uh, the 4.9 billion distribution was targeted directly again, to those facilities participating in Medicare. So if you, uh, were not participating in Medicare, if you were a Medicaid only facility, as I said, uh, you did not receive any of that 4.9 billion. Right. And you, the, there, the, the way it was distributed was$50,000, uh, for each facility plus$2,500 per skilled bed.
Speaker 1:I see. Per for Medicare skilled
Speaker 2:For, for Medicare facilities. Right,
Speaker 3:Right.
Speaker 1:And Camille, I understand each of these, these payment streams under the provider release fund has its own terms and conditions. Um, and some of them are, are rooted in the actual statutory provision in cares, but a lot of them do not seem to be. Um, what do you think for long-term care providers are some of the most important terms and conditions to take note of under the, the general distribution funds that came out first?
Speaker 3:Um, well, I think when you, you get, you dig down into'em and you compare'em side by side, big elephant in the room is really, okay, how do we keep this, how do we demonstrate that, you know, we did need it? And, um, those terms and conditions across the board and on all three tranches, um, specifically say that the funds are to be used on expenses related to preventing, preparing and responding to covid, and can be used on lost revenues related to covid that is consistent across all three tranches terms and conditions. And then, um, you know, and then just as important is that they have to follow an outlined prescription of maintaining those records and documentation, uh, as described by the OM B. And that's, you know, something a lot of these providers have not been accustomed to because they've not necessarily received, um, you know, we use this term a little loosely, but grant money mm-hmm.<affirmative>, and when you have to follow those types of recordkeeping and documentation. But those, the, those are the two most critical pieces is that you spend it on preventing, preparing and responding for covid and to subsidize those lost revenues related to covid. And that you document, document, document, how you did that, what those expenses were for, and creating those records and documentation policies that are described by O b, I think it's very important that people pay very close attention to that.
Speaker 1:Right. And the, the purpose of the, the expenditures as you described it, and I think, I think it's actually, it appears in the law itself. I mean, it seems super broad preventing responding to the disease that are also, um, covering loss revenues. How, what, um, what's an example of a<laugh> type of expense a long-term care fleet would incur that would've incurred that would not be an acceptable use of these funds? And, and how are you recommending given the breadth of the standard that, um, that providers speak about? What is, what is allowable to use the money for?
Speaker 3:Okay. I might not answer this question exactly the way you asked it, but let me kind of just explain what we're advising clients to, um, to do, because it is not, you know, they've not identified what the true, um, definition of those expenses are except for these very broad terms and Right. They do not define lost revenues as well. However, they, in the FAQs, they do address some examples of how you could calculate loss revenues. Um, I'll just kind of talk to that for just a moment. Um, with respect to the loss revenues, FAQs addressed a couple examples. One of them was looking at the March and April, your March and April revenues and comparing it to your budgeted revenues for that time to determine a lost revenue amount. Um, I thought that was pretty, uh, a pretty loose definition because who's to say what the budget was? And you've got looking at actual 2000 March and April, 2020 and comparing it to actual March and April, 2019, that seems a little, that seems a little more logical to me. But there are a lot of things that can make those numbers, uh, not necessarily be apples to apples. And so another, another way one could look at it is look at your average resident per day, because while your census might not have changed overall, Harvey talked about, you know, the, the ceasing all elective surgery. So your Medicare population in your facility for many, many of our clients, um, has just plummeted. And really those that Medicare, that medicare volume is really what supports so much of the operations because of other underfunding with Medicaid. And so it's important, I think it's important to look at your average resident per day by payer class. So if you were to look at March and April of 2020, and you only have two Medicare residents where you might normally average the two months prior, or two those same two months a year ago, 10 residents, and you take that times an average length of stay, times your average Medicare rate, you know, you can get there pretty quick on the kind of revenues you're losing because of the fe of those elective surgeries. So that's an example, online revenues.
Speaker 1:Right. And it's a more, um, uh, granular targeted way of looking at that concept than, than, than the suggestions they provided in the FAQs, it sounds like.
Speaker 3:Right. And just another, just a couple of things with related to, you asked about examples of expenses mm-hmm.<affirmative>, you know, they use it broadly where they say, prevent, prepare, and respond, and then they do not, they do not address in terms of addition in the terms of additions, additional expenses, they just say, related to preventing, preparing and responding. But when you really look at your operations, I mean, you think about how people's normal daily activity, employees normal daily activity within a facility, changed drastically and went from what they would normally do, just taking care of the residents to this co you know, basically a cohort operation to Right.
Speaker 1:Really right,
Speaker 3:Everyone safe. Um, well, those, those activities they're doing are preventing and preparing for it. So we are recommending that clients contin, you know, start tracking that, going back to March and tracking that. But at the same time, you know, looking at your card costs, just your normal purchasing that you had to do, the food cost you had to take on, um, and feeding employees and how, what, um, what additional, how much times a lot of this, these products cost more because you, and so you wanna look at that price differential as well. So there's a lot of, there are a lot of examples out there. We actually have a great, um, place on our website that gives a lot of those different ideas to think about.
Speaker 1:Great. On your, on your BKD website.
Speaker 3:Yes. Yes.
Speaker 1:And, and I wanted to note too, that when Camille refers to the faq, if you, I don't see a good other way to identify the link, except that when you Google Cares Act provider Relief fund, frequently asked questions, uh, you'll come upon this huge, uh, FAQ document that appears to be being updated quite regularly, um, regarding the, the various, um, distributions of the provider relief fund. So there are really, uh, a lot of issues that, that are addressed pretty helpful, um, in there. Yeah.
Speaker 3:I wanna, real quick, um, when you go to the, the website itself and you go to the CARES Act, learn more, um, and it takes you to the different portals when you kind of scroll down on that page where you see the
Speaker 1:Different portals, there is a link down there to the FAQs also. Great. The HHS Provider Relief Fund website. Yes. Yes, yes, yes. And that is to say it's pretty well structured in that it, it just describes each allocation separately has a separate link to the terms and conditions for each. Um, so it, it does give a pretty good sense of how the whole program is structured. Each of the mentioned.
Speaker 2:I was gonna say, uh, excuse me for interrupting. I was gonna say that each of the associations, uh, trade associations for the various provider groups have, have really done a pretty good job as well. So if you're a long-term care provider and you're a member of the American Healthcare Association, for example, our leading age, you can go to their websites and they have a lot of very useful material that gets into some of the detail that, uh, Camil was talking about.
Speaker 1:Great point. Thanks. And Harvey, I wanted to come back to the, you mentioned the, the five, almost 5 billion targeted funding, um, for, for the skilled nursing facilities that participate in Medicare. Um, Camil, you're talking about just the general most important terms and, and uses of funds. Is there anything more specific or different about that 5 billion that's just being distributed to this n that, that we need to know in terms of how the money can be used or other limitations?
Speaker 2:No, it's pretty much the same as the first two tranches. Uh, again, you're supposed to be using this money to pre prepare, prevent, prepare, and respond to covid. And, uh, same way that Camille was talking about just a few minutes ago and what the lost revenue is that you can, uh, you can calculate. Uh, so it, the, the terms and conditions it seems to us are pretty much the same. Although, again, we suggest that with each of these tranches that you look at the terms and conditions that apply to each, cuz they sometimes can be a little bit different and also look at the frequently asked questions that apply to them. And I might also add that HHS has a, uh, phone line that you can call as a provider and ask questions. Although we are finding that, uh, if you do that, uh, sometimes you may want to ask your question more than once because you may get different answers from different people, which is not, not necessarily that unusual, but they're very nice and they're very helpful. And so it can give you some idea of kind of, uh, what the ballpark is, uh, for your particular question.
Speaker 1:Right. I guess it's kind of like with Medicare, you know, you can call the Mac and you might get this delightful answer to your question, but, uh,
Speaker 2:Right. Are the IRS or you know, any of the agencies, you know, everybody, everybody has this is, this is, I mean, and, and it, it, the congress, uh, created these programs so quickly, uh, and the timeframes to implement them were so sharp that it's been quite a, actually cms, I think hhs sba, they've all really, I think, done a good job of getting the money out and trying to inform people later on so that, uh, uh, folks can have the benefit of the, uh, of, of the money to be able to deal with the situation as it was arising.
Speaker 1:Yeah, I agree with you. I, I work out quite a bit in the telehealth space, and it is, um, um, it's kind of bewildering all the stages of rule making, um, and guidances that CMS has issued. But really, when you think how burdensome the federal government processes are, they have acted with quite a bit of agility here,<laugh> in this fast moving crisis. Um, I wanted to ask you both, we've talked about these various funding streams. Should providers and their council think of these as a grant or some other form of payment? And if it is a grant, what what is the significance of that?
Speaker 3:Well, um, you know, they do not, I mean, when you look at the terms of conditions and, um, most everything, you don't necessarily see the term grant. But if you, if you do, you can work your way to it within HHS website and the general distribution portal, when you go to the user guide, um, if you're using the general distribution portal to apply additional monies, the user guide does reference on the very first page that this is a grant. Um, and, you know, with respect to, to considering it that, I mean, their intent is not to take it back. I mean, they, they, they want people to have these funds to provide the relief of the expenditures they're using to address covid and to subsidize their loss revenues. Um, but as we've said, and will continue to say through the rest of this podcast, that they have to follow those terms and conditions. And now the other thing that can meet connects it to that grant world, if you will, is that, um, subsequently these funds have been, uh, assigned a CS d a number, uh, right for reference, in case someone wants it is 93.498. So, you know, HRSA has assigned it a c FDA number that, um, is demonstrating and that it is subject to the OMB guidance, and it will be subject to a single audit if you exceed$750,000 in funds.
Speaker 1:Interesting. And can you tell me a little more about what a single audit is and what that entails?
Speaker 3:Well, um, normally only nonprofits has been, it's been only been a part of their world. They receive some type of a grant money that requires them to, if they exceed a threshold, then they are required to have an audit by an independent auditor to come in and audit that program to make sure that they have agreed to the terms and conditions. Now, the, the specific guidance that's been given in those terms, con and conditions related to, so o, O and B basically will line out these specific, um, guidelines that you follow. Well, HHS is only identified just less than half a dozen of the different guidance from OM B that has to be, uh, followed, which is unusual. And so we're really kind of at a loss right now exactly how we do that. But those conversations are taking place with, um, HHS and hrsa. Um, we had a partner just this morning that was involved in those conversations. So it is an independent audit process that you have to go through, through, it's separate from, you know, HHS isn't doing it, the OIG isn't doing it. Um, it is specifically the provider is hiring an independent accountant to do it. Right. And when, and normally this has only been, this only applies to non-profits, but, um, it does seem like they'll be applying this to profits and, uh, but those, that guidance has not been given yet.
Speaker 1:Interesting. And not, not necessarily all of the grants requirements in the federal regulations will apply to these audits, it sounds like. Correct,
Speaker 3:Correct. It's interesting.
Speaker 2:And for those, and for those that are not familiar with the acronyms versus the Health Resources and Services administration, which is an agency of the Department of Health and Human Services,
Speaker 1:Thank you, Harvey. And, and that's also, I believe, is essentially administering the, the provider relief fund first. Is that right? Or many of them?
Speaker 2:Yes.
Speaker 3:Yes, it is an agency of HHS
Speaker 1:And Camille, I thought, thought it was interesting not to go too far down this rabbit hole, but I read the c FDA announcement after you alerted me to it, and I noticed that even the uninsured services claims program is included within that announcement, which is, was interesting to me because that portion of the provider relief fund is not, um, you wouldn't think of that as resembling a grant at all in that providers, um, you know, file claims for services that they have provided to uninsured individuals. So I would think that would be interesting for the auditors to keep track of<laugh>.
Speaker 3:Well
Speaker 1:Give, give the amount another week
Speaker 3:Or two, give it another week or two that might change
Speaker 1:<laugh> ah,<laugh>. Okay.
Speaker 3:And I, were laughing, you know, today's Friday, Friday always something always happened every Friday,<laugh>,
Speaker 1:Right. Something good to mess up your, uh, Saturday afternoon with<laugh> questions to answer about it. Um, so I, I know there's not an actual application process for this, even though, interestingly, I, I noted that the law does mention an application, um, but it seems that instead providers simply have the funds credited to their account. Um, how does, how is HHS getting around this? How are they making sure that providers understand the terms and conditions and what do the providers have to do to indicate that understanding?
Speaker 3:Well, I do think that it is, it has been confusing because they have used this whole application wording throughout different parts of, uh, verbiage on the website. Um, but you know, yes, the, the money's got deposited, but the general distribute, you had your attestation portal, and I'm kind of answering the first part of your question. So, um, you have the, at, you have the attestation portal, and might I mention that that's been extended to 90 days from data receipt that you had to attest, but they had originally created the general distribution portal to be utilized as an application process that if you felt you weren't paid enough and you wanted to, or your revenue, your lost revenues were, did not substantiate, or the funds didn't substantiate help you recover those lost revenues, you could go to this general distribution portal and apply for additional money. And so that's really, I think kind of where this whole, this application verbiage came into play. But, um, and there is some, there's a, I'll just go ahead and say this now that you didn't ask this, but technically due due June 3rd is the last, uh, date that you can apply for more money, at least as of today through the general distribution portal. And so, and, and part of that application process is uploading, uploaded financial tax return information and then putting in your lost revenues from March and April, Uhhuh
Speaker 1:<affirmative>. Well, those two,
Speaker 3:Those two items are also required just regardless for any provider receiving any of these general distribution funds. Um, but this by third date is when you read it on the website, it's if you want more money, but cause they have extended your attestation period to 90 days, if you're not wanting more money, it would just go to say that if attestation has been extended 90 days, you don't have to upload your financial information, um, until you, you attest. Cause you can't even use the general distribution portal until you do your attestation. So I'm, I probably got off track from your actual question, but I wanted to get that in there. Um,
Speaker 1:Right. Yeah, no, that's, that's, that's really interesting. And it sounds like it could be pretty bewildering. So if the providers got money back before the attestation period was extended, it was 45 days before, right?
Speaker 3:Well, originally then it went 45 and now it's at 90 uhhuh
Speaker 1:<affirmative>. Okay. But whatever deadline they got in the first instance applies, I assume. Right. It's not that the deadline hasn't been extended retrospectively or has it
Speaker 3:Um, well, I'm sorry, can you ask that question again? I'm not quite sure I understood.
Speaker 1:Oh, I guess it was like, have you received a, um, an amount on, you know, April the fifth and it said you're, you're, you have to complete your at a station within 30 days or whatever the, the, the timeframe was at the time when they've adjusted these timeframes, does that, does that extend the provider's deadlines to finish the attestation retrospectively, or does it
Speaker 3:And upload their financial information? You would think that it would, they have not clarified that, that you would
Speaker 1:Think Yeah,
Speaker 3:They still have time. They still have that 90 day period to get their financial information uploaded into the general distribution portal.
Speaker 1:Right. I see. And do you encounter any examples of providers who conversely to asking for more money have found they have amounts credited to their accounts that seem in excess of what the formula would indicate? Um, and how, how do you advise them?
Speaker 3:Yes, there are some people who received more than they should have. Um, we first originally would have them, you know, call the one 800 number. Um, cause, but I have not dealt specifically with a client that, um, sent a partial amount back. But, um, some people have definitely received too much or received it, shouldn't have. Um, they're all different kinds of scenarios and there's a lot of the answers we still don't have. They're still being vetted out. Right.
Speaker 2:Yeah. It seems that, uh, if you receive more money than you should have according to the formula, then, uh, what you're, what we're hearing when we've inquired on behalf of our clients, uh, is to determine whether you anticipate that you're going to continue to have expenses that will allow you to utilize that money. And if you do anticipate that, then you can keep the money during that period of time. Of course, when it's all said and done, if at the end of the period you have not been able to expend all that money, then as Camille indicated, then you should return that money, it becomes a quote overpayment unquote, and you have 60 days to return it.
Speaker 1:Interesting. Right. So they should probably make the inquiry before, um, before going into the attestation portal so that they can get straight, um, this issue.
Speaker 3:And speaking of miscalculations, um, you know, the OIG did announce a new audit of the CARES Act, um, provider Relief fund that, uh, will work to examine the effectiveness of HH S'S controls over awarding the payments, um, and looking at data and interviewing program officials to gain an understanding of their basis of calculation and, uh, review those payments for compliance within the CARES Act.
Speaker 1:So, so that's, is that the same oig, um, audit authority that's referred to in the law where sometime in, is it a three year horizon that Yeah. Audit
Speaker 3:Mm-hmm.<affirmative> originally within the terms of, and, and Harvey might want to talk a little to this, but originally on the, in the terms of conditions, it talks about, you know, the oig, you know, has the authority to go in and audit how you spend your money. This is with respect to OIG announcing that they're looking to make sure that HHS had effective controls in place when they went to calculate the funds that were distributed to providers. So a whole, a whole different, uh, ballgame.
Speaker 1:Oh, I see, I see. Right. Yeah.
Speaker 2:Cause
Speaker 1:The oig Oh, hhs
Speaker 2:Ok. Yeah, the OIG is, is an Inspector general, and as an inspector general, which has been getting a lot of publicity lately, inspectors general of agencies, one of their primary jobs is to see whether the agency, uh, of, uh, for which they are, the Inspector General is doing its job properly.
Speaker 1:Right. Right. So, okay. OIG will be scrutinizing both HHS and its administration of this program as well. Um, um, the, the individual,
Speaker 2:Correct.
Speaker 1:The individual recipients. And perhaps with that, we should, we should move on to talking about the reporting and, and auditing as they're talked about in the terms for these, for these programs. Um, so I understand the CARES Act required providers receiving money under the Relief fund to submit quarterly reporting. Um, when, what do we know about this? What will be required? Uh, when will the reports be due?
Speaker 3:Well, the quarterly, the first, they defined the first one to be due July 10th. Um, we do not know what that report will look like. Um, there's no guidance that has been issued yet. So, um, considering how much, uh, how many other deadlines have been extended, uh, I think people are keeping their fingers crossed that this will be extended to, but right now, that's all we know. Um, due July 10th, and we don't know what those sources look like, but they will, those reports will be required to report all, all stimulus money, any funding you receive from any act that related to covid. And then it will also act, ask for you to submit, um, how you spent that money and or how it might have subsidized loss revenues.
Speaker 1:Interesting. And where, who, who's reviewing the reports and, and where are they submitted? Is this all going through hrsa?
Speaker 3:Um, they are, they will be submitted to, um, hhs, but everyone pretty much between hhs, hrsa, oig, um, Harvey might wanna talk a little bit about that in terms of who will have, who has the ability to look at these to make sure that, and review them to make sure they've followed the terms and conditions. I mean, the terms and conditions specifically stayed in it. Um, who all has access to audit these?
Speaker 2:Yeah, I think you're gonna see audits, quite frankly, from all those agencies. B A O I G, uh, hrsa, cms, uh, HHS contractors. Um, there's gonna be a lot of folks doing auditing. Uh, I, uh, it would appear to me Congress didn't give out all this money and not want to have some accountability, uh, for how it's being spent. So you're gonna be seeing a lot of folks doing auditing and exactly how that's gonna be done, how that's gonna be coordinated, I think is something that we're gonna learn about in the future.
Speaker 1:Yes. And Harvey, is there any, um, is there a minimum, like a minimum threshold of, of dollars providers must have received in order to be, um, subject to the, to the auditing?
Speaker 2:Well, you definitely will be audited if you receive more than 2 million, but that doesn't mean that if you receive less than$2 million that you won't be audited. But o obviously they're going to audit those that got the most money first, and uh, then they'll sort of work their way down. Uh, but that can change if there are complaints. Uh, we think that, uh, given the nature of this program, you're going to see the, uh, uh, key Tom Barr, uh, the, the attorneys that represent whistleblowers. I think you're gonna see a lot of activity in that area. You're gonna see a lot of complaints, uh, potentially a lot of whistleblowers. And, uh, all of those can, uh, redirect the attention of the government agencies to respond to those. So right now, it's a little bit on the auditing side, uh, kind of the wild, wild west. We really don't know, but, uh, we, we, we are confident there will be audits and who will be doing them, how they will be done, uh, and when they will be done, and still to be determined
Speaker 1:Right there. Mm-hmm.
Speaker 3:<affirmative>, Suzanne, there's been a lot of numbers thrown out in terms of thresholds. Just a couple of things that, um, I might point out. The quarterly report is required to be filed if you've received over 150,000,
Speaker 1:Um, okay.
Speaker 3:Single audit will be required if you have received over 750,000. And then, and then with respect to the PPP loans, they have identified that if you've received over 2 million, you will be audited.
Speaker 1:I see. Okay. That is a lot of different<laugh>, different thresholds, and then so often with audits, um, they, it takes so long to settle out, right.<laugh>, um, it may be the, the receipt of the money may be significantly in the rear view mirror before, um, providers learn about the audit. So I guess that just underlines the, the importance of the contemporary, its documentation of how they've been, how they have used the funds. And
Speaker 3:That is exactly right. I mean, I could not stress enough, um, how important it is for them to be tracking that now, because the, I mean, as we know it, I mean, so much of the expense and, uh, realignment of the resources you had took place in March and April, and, um, they really got to focus on going back to that and, and accumulating that information.
Speaker 1:Right. Which, when you think about, um, real time crisis response administration of a facility<laugh> during those months, and then also taking the care to go back and, and account for the use of those funds. That's, that's a pretty hefty list would seem. I think we have just a few minutes left. And I I wanted to ask you all one other question. Um, curious how you advise if you have encountered this situation, long-term care facilities that are navigating changes in ownership during this time. If provider relief fund money is based on, um, the billings in a prior year, then then what happens when a, when a facility is, is sold or, or, um, merged into another, um, entity? Is that something you've seen coming up?
Speaker 2:We have and, uh, there have been, uh, a number of frequently asked questions that have dealt with that, uh, for example, on, uh, May 20th of this year. Uh, question number two under the frequently asked questions, uh, was the following an organization that sold part of its practice? This is obviously not a long-term care facility. This was the physician group in 2019 or January, 2020, received a payment under the general distribution that reflected the 2019 Medicare fee for service. Billing of that part of the practice can return a portion of the payment for part of the practice it no longer owns. And HHS responded by saying, no, it may not return a partial payment. And then it went on to say that within the context of a provider that sold part of the practice, and I'll quote, if a provider anticipates that it's covid related, lost revenues of increased expenses will be materially less than the value of the provider relief fund payment receive, the provider should reject the entire general distribution payment and submit the appropriate revenue documentation through the general distribution portal to facilitate HHS determining the correct payment. End of quote. So when HS HHS seems to be saying is that even if a provider sold a substantial part of its business, and the case of long term care facility would probably be the entire facility, uh, that in part justified the amount of, of the fund that it got. That is the timing of the sale. If it was in business for a part of the sale, uh, that doesn't create an, necessarily create an overpayment if the provider believes that it's healthcare related expenses and lost revenue will not be materially less. So the payment amount itself does not appear to appear to be material. Instead, the material components are the provider's ultimate healthcare expenses in the lost revenue attributable to ho to covid. And if the provider believes there will be materially less because of the sale, then the, the, the entire payment should be returned. Um, and this was reinforced by another question in that frequently asked questions, which was question number three. It was the following question. And that question was, does HHS intend to recoup any payments made to providers not tied to specific claims for reimbursement, such as a general distribution payment? And the response was that the provider relief fund, in terms and conditions, require the recipients to be able to demonstrate that loss revenues and increased expenses attributable to covid 19, excluding expenses and losses that have been reimbursed from other sources, uh, or other sources are obligated to reimburse, exceed total payments from the relief fund, then generally HHS doesn't intend to recoup as long as the provider's loss revenue can, increased expenses exceed the amount of the provider relief funding a provider has received. So that's something that has to be looked at and we expect there will be additional frequent asked questions on this particular subject. Uh, yes. So it's sort of a stay tuned, if you will. Right. But we're al what what is also complicated is, and this is somewhat peculiar to long-term care facilities, because of the delays that occur when a long-term care facility is sold, buyer sometimes doesn't, isn't able to bill immediately, but they actually have taken over the operation of the facility. So they bill under the prior providers, the selling providers, uh, uh, Medicare number, uh, in those kinds of situations, uh, you certainly can't keep the money for the period that's covered by that because you weren't providing the services as the selling provider. In those cases, you need to return all the money and then the buyer can make application if it feels it's entitled to the money in a fit experienced, uh, covid related expenses as we've been describing them.
Speaker 1:Right. Okay. So if the buyer didn't, didn't bill Medicare in 2019, then, um, then clearly it wouldn't be entitled to any funds under that general distribution. Correct. And that seems to dovetail in with the topic we were discussing earlier about actions to take when, um, providers think that the, the distribution they received might not have been correct or excessive. Well, certainly. Um, there's a lot of, uh, Wes here, we've gotten a little into the weeds. I feel like we've given a bit of an overview of the high points as well in terms of what the money is for and, um, what the, the safeguards are on it. Harvey, Camille, do you have any other, um, last thoughts on the provider release fund before we sign off?
Speaker 2:Well, let me just say that I, I think it should be obvious that you have to have a system in place to adequately document how you're spending these funds, uh, from what fund are you're spending them and what you're spending them on. And if you haven't taken time to, uh, to do that on your own, uh, certainly consulting with folks like Camille at B K D would be very helpful to get an idea of how to create that kind of an accounting system to be able to keep track of this. Because when you are audited, uh, I can assure you the auditors will be looking for that kind of detail.
Speaker 1:Well, thank you both. Um, thank you. Thank you Harvey. Been really, I hope Thank you.
Speaker 2:Yes.