The influx of $ 1.5 billion Medicare money to skilled nursing facilities comes with strings attached – and some might not keep it

Late last week, some operators of skilled nursing facilities – along with many other providers who provide Medicare-reimbursed health services – woke up to a sudden influx of money into their bank accounts. ‘company. But they won’t necessarily be able to keep it.

Without much fanfare, the Centers for Medicare & Medicaid Services (CMS) began handing out the first $ 30 billion of the roughly $ 100 billion earmarked for healthcare providers in the coronavirus stimulus package passed the month. last.

CMS administrator Seema Verma touted the flexibility operators would enjoy once they received their shares of the COVID-19 stimulus money.

“There are no strings attached, so the healthcare providers who receive these dollars can basically spend it as they see fit,” Verma said. during a press conference at the White House Last week.

But operators may have seen a few channels to consider, according to an analysis fine print from law firm Arnall Golden Gregory.

“The conditions confirm that the funds are to” reimburse the beneficiary only for health care expenses or loss of income attributable to the coronavirus, “wrote Hedy Silver Rubinger, partner of AGG and his partner Alexander Foster.” The documentation of all expenses related to COVID-19, as well as lost revenue attributable to COVID-19, will be required for reports to be submitted to CMS. ”

Unlike other forms of coronavirus assistance from the federal government – as a Medicare advance payment program which has seen CMS launch over $ 51 billion in short-term operator loans – Medicare’s $ 100 billion in funding comes in the form of grants that don’t need to be repaid.

This first round was open to any provider who received fee-for-service reimbursements from Medicare in 2019; future distributions of the total of $ 100 billion available will be sent to facilities, such as nursing homes with a significant proportion of long-term care residents, which derive revenue from Medicaid and other payment sources.

Based on this information, investment firm Mizuho Securities USA predicted that qualified nursing institutions was expected to earn $ 1.5 billion in total aid during the first round of financing.

But to keep the money, operators will need to keep full documentation of how they use the money, AGG warned – while not breaking any of the rules governing the program.

“Providers should know that within 30 days of receiving relief funds, they must sign a certificate confirming receipt of the funds and agreeing to the terms of payment,” noted Rubinger and Foster.

For example, the funds can only be used by facilities that support people with confirmed or suspected cases of COVID-19. Operators can only allocate the money to “expenses related to health care or loss of income attributable to the coronavirus”, and therefore cannot use it to cover other expenses “which have been reimbursed by other sources or that other sources are obliged to reimburse ”.

If a vendor determines that their organization cannot comply with these rules, they are required to return the money within 30 days, although AGG noted that full guidelines regarding the refund process have yet to be released.

All or nothing?

As currently drafted, the rules describe an “all or nothing” proposition in which operators can either agree to all of the terms and take the money, or decline and return the full grant. But as the government releases more details on the process over the next few days, Rubinger predicted that CMS will allow operators to keep some of the money while seeking reimbursement for anything that exceeds the COVID-19 costs of suppliers.

“Since there will be quarterly reports and other requirements, common sense tells me that there will be some accounting at the end of this,” Rubinger said.

Because of this, Rubinger said operators must start preparing detailed briefs on how COVID-19 has affected their finances – whether they have already received their Medicare grants or are waiting for the Medicaid tranche to go into effect. .

“For the skilled nursing industry right now, the most important thing they can do is really start tracking both their soft and hard spending related to COVID,” Rubinger said.

Fixed costs include direct expenses such as COVID-19 testing, personal protective equipment (PPE) and temporary staff obligations; Incidental costs can include a wide variety of tasks performed at both the building and corporate level, such as the extra time spent finding PPE suppliers or navigating the dense network of emergency regulations for them. nursing homes with consultants and lawyers.

“Our clients are spending a lot more money legally on this than they probably originally anticipated, in terms of changing admissions agreements and trying to resolve state and federal policy disputes than they were. ‘they receive – and determine what is the law and what is only a suggestion, ”Rubinger mentioned.

The additional documentation serves a dual purpose. In addition to preventing potential financial headaches with CMS, having records of all expenses related to COVID – especially related to attempts to secure testing and PPE – will help with any future litigation around the coronavirus.

“That will be the key to success in all of this – having a record,” Rubinger said.

Medicaid relief arrival

CMS did not say exactly when the second round of funding, based on reimbursements from Medicaid and other sources, would begin. More than 60% of nursing home residents nationwide rely on Medicaid, which pays for long-term stays, for their primary insurance coverage.

Leaders of the Medicare & CHIP Payment and Access Commission (MACPAC) at the end of last week wrote a letter urging Verma to release this next wave of money as soon as possible.

“Using the Fast Track Medicare electronic funds transfer channel ignores the real and pressing concerns of safety net providers who are on the front lines to serve the poorest and most vulnerable.” country, but who may not have high health insurance. income, ”wrote MACPAC President Melanie Bella. “Since the purpose of the relief fund is to reimburse COVID-19-related health care providers not covered by other sources of revenue, these providers should be given priority when distributing the remaining $ 70 billion of federal funds. ”

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