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CARES Act Provider Relief Fund: General Information


$50 Billion General Distribution

$50 billion is allocated proportional to providers' share of 2018 net patient revenue. The allocation methodology is designed to provide relief to providers, who bill Medicare fee-for-service, with at least 2% of that provider’s net patient revenue regardless of the provider’s payer mix. Payments are determined based on the lesser of 2% of a provider’s 2018 (or most recent complete tax year) net patient revenue or the sum of incurred losses for March and April.

Total Amount Date distributed Distribution
$30 billion April 10 ($26 billion)
April 17 ($4 billion)
Automatic based on provider’s share of Medicare fee-for-service reimbursements in 2019
$20 billion April 24 (portal acess begun) Based on CMS cost reports or incurred losses

Information about the Initial $30 Billion Distribution

On April 10, 2020, HHS immediately distributed $30 billion to eligible providers throughout the American healthcare system.

All facilities and providers that received Medicare fee-for-service (FFS) reimbursements in 2019 are eligible for this initial rapid distribution.

  • All relief payments are made to the billing organization according to its Taxpayer Identification Number (TIN).
  • Payments to practices that are part of larger medical groups will be sent to the group's central billing office.

If you ceased operation as a result of the COVID-19 pandemic, you are still eligible to receive funds so long as you provided diagnoses, testing, or care for individuals with possible or actual cases of COVID-19. Care does not have to be specific to treating COVID-19. HHS broadly views every patient as a possible case of COVID-19.

Payments from the initial $30 billion are based on the provider’s share of total Medicare fee-for-service (FFS) reimbursements in 2019.

  • To estimate a payment amount, divide the provider’s 2019 Medicare FFS (not including Medicare Advantage) payments received by the total 2019 FFS Medicare payments, which were approximately $484 billion, and multiply that ratio by $30,000,000,000. Providers can obtain their 2019 Medicare FFS billings from their organization's revenue management system.

Example

A community hospital billed Medicare FFS $121 million in 2019. To determine how much they would receive, use this equation:

(Provider’s 2019 Medicare FFS Amount) / (Total 2019 Medicare Payments) x ($30,000,000,000)

$121,000,000/$484,000,000,000 x $30,000,000,000 = $7,500,000

HHS has partnered with UnitedHealth Group (UHG) to provide rapid payment to providers eligible for the distribution of the initial $30 billion in funds.

  • Providers are paid via Automated Clearing House account information on file with UHG or the Centers for Medicare & Medicaid Services (CMS).
  • The automatic payments come to providers via Optum Bank with "HHSPAYMENT" as the payment description.
  • Providers who normally receive a paper check for reimbursement from CMS, will receive a paper check in the mail for this payment as well.

Visit the For Providers page for information about the attestation process to accept or reject the funds.

  • Providers must sign an attestation confirming receipt of the funds and agreeing to the terms and conditions of payment within 45 days of receiving the payment.
  • Not returning the payment within 45 days of receipt will be viewed as acceptance of the Terms and Conditions.

$50 Billion Targeted Allocations

$50 billion is allocated for targeted distribution to providers in areas particularly impacted by the COVID-19 outbreak, rural providers, providers of services with lower shares of Medicare reimbursement or who predominantly serve the Medicaid population, and providers requesting reimbursement for the treatment of uninsured Americans. The fast and transparent dispersal of funds gives relief to those providers who are struggling to keep their doors open.


$12 Billion High-Impact Distribution

HHS is distributing $12 billion to 395 hospitals who provided inpatient care for 100 or more COVID-19 patients through April 10, 2020, $2 billion of which will be distributed to these hospitals based on their Medicare and Medicaid disproportionate share and uncompensated care payments.

  • These 395 hospitals accounted for 71 percent of COVID-19 inpatient admissions reported to HHS from nearly 6,000 hospitals around the country. The distribution uses a simple formula to determine what each hospital receives: hospitals are paid a fixed amount per COVID-19 inpatient admission, with an additional amount taking into account their Medicare and Medicaid disproportionate share and uncompensated care payments.

$10 billion high-impact distribution to hospitals

Inpatient admissions are a primary driver of costs related to COVID-19. A portion of the Provider Relief Fund is being distributed to hospitals that have treated a large number of COVID inpatient admissions.

In response to an HHS request for information, 5,598 hospitals submitted the number of COVID-19 inpatient admissions they encountered through April 10, 2020. 184,037 COVID-19 inpatient admissions were reported.

From this data, HHS identified those facilities with 100 or more COVID-19 admissions. These facilities encountered 129,911 admissions, or over 70% of the total number of COVID-19 inpatient admissions reported. The number of admissions encountered by these hospitals was the used to determine the allocation of Relief Funds across the pool of eligible recipients. Each recipient received funding equal to $76,975 per admission.

Note: Payments to these facilities on this basis is not intended to reimburse the facilities for the specific cost of these admissions. Rather, COVID-19 admissions is being used as a proxy for the extent to which each facility experienced lost revenue and increased expenses associated with directly treating a substantial number of COVID-19 inpatient admission.

$2 billion high-impact distribution to facilities

HHS recognizes that not all facilities are equally prepared to withstand the impacts of the coronavirus. Facilities that serve large Medicare or uninsured populations often do not have the same level of financial resources as other facilities. In recognition of this fact, HHS distributed $2 billion in additional funding to these facilities in proportion to each facility's share of Medicare Disproportionate Share funding.


$10 Billion Rural Distribution

HHS is distributing $10 billion to rural hospitals, including rural acute care general hospitals and Critical Access Hospitals (CAHs), Rural Health Clinics (RHCs), and Community Health Centers located in rural areas.

  • Hospitals and RHCs will each receive a minimum base payment plus a percent of their annual expenses. This expense-based method accounts for operating cost and lost revenue incurred by rural hospitals for both inpatient and outpatient services. The base payment will account for RHCs with no reported Medicare claims, such as pediatric RHCs, and CHCs lacking expense data, by ensuring that all clinical, non-hospital sites receive a minimum level of support no less than $100,000, with additional payment based on operating expenses.
  • Rural acute care general hospitals and CAHs will receive a minimum level of support of no less than $1,000,000, with additional payment based on operating expenses.
  • Eligible providers will receive the funds via direct deposit, based on the physical address of the facilities as reported to the Centers for Medicare and Medicaid Services (CMS) and the Health Resources and Services Administration (HRSA), regardless of their affiliation with organizations based in urban areas.

This funding recognizes that rural hospitals, health clinics, and health centers function with lower operating margins than urban and suburban providers and thus are at greater risk of closure as a result of reduced volumes attributable to the coronavirus.  Targeted distributions to rural hospitals, health clinics, and health centers were made according to the following methodology.

Recipients fall into three categories:

  • Rural acute care general hospitals and Critical Access Hospitals (CAHs)
  • Rural Health Clinics (RHCs)
  • Community Health Center sites located in rural areas

Rural acute care hospitals and Critical Access Hospitals (CAHs):

The methodology provides hospitals with supplemental funds based on a graduated base amount plus an additional amount to account for a portion of their usual operating costs and the volume of care they regularly provide, according to the following formula. The most recent, publicly available Medicare hospital cost reports were used to identify operating costs:

  • Per Hospital $ Allocation = Graduated Base payment + 1.97%* of the hospital’s operating expenses

The graduated base payment is calculated as:

  • 50% of the first $2 million of expenses (payment of up to $1,000,000)
  • 40% of the next $2 million of expenses (payment of up to $800,000)
  • 30% of the next $2 million of expenses (payment of up to $600,000)
  • 20% of the next $2 million of expenses (payment of up to $400,000)
  • 10% of the next $2 million of expenses (payment of up to $200,000)

Rural hospitals with annual operating expenses greater than $10,000,000 receive a base payment of $3,000,000.

Rural hospitals with no operating expense data receive a base payment of $1,000,000.

The total calculated amount was then multiplied by 1.03253231** to determine the actual payment per rural provider.

*The actual value used in the formula was 1.967728428%.

Rural Health Clinics (RHCs):

Provider-Based RHCs:  RHCs connected with rural hospitals have their allocations included with their hospital’s allocation, and the hospital is responsible for allocating dollars to support its RHC services.

Independent RHCs:  A base amount plus a percentage of total operating costs were calculated for independent RHCs not associated with a hospital using RHC Cost Report data according to the following formula:

  • Per Independent RHC $ Allocation = $100,000 per clinic site + 3.6%  of the RHC’s operating expenses

Community Health Centers:

Health Centers in rural areas: The allocation for health centers in rural areas was a flat payment amount per health center site of $100,000.  Funds are distributed to each FQHC organization based on the number of individual rural clinic sites it operates.

  • Per FQHC $ Allocation = $100,000 per rural clinic site

The total calculated amount for RHCs and health centers was then multiplied by 1.03253231** to determine the actual payment per rural provider.

**This adjustment was applied to ensure that the total value of distributions equaled $10 billion.

Providers eligible for the targeted Rural Health Relief Fund distribution must be located in a geography that meets the following rural definition:

  1. All non-Metro counties.
  2. All Census Tracts1within a Metropolitan county that have a Rural-Urban Commuting Area (RUCA) code of 4-10.  The RUCA codes allow the identification of rural Census Tracts in Metropolitan counties. 
  3. 132 large area census tracts with RUCA codes 2 or 3. These tracts are at least 400 square miles in area with a population density of no more than 35 people per square mile. 
  4. For independent Rural Health Clinics: the authorizing statute applies the Census Bureau definition, which defines a Rural Health Clinic as being located outside of an Urbanized Area as defined by the U.S. Census Bureau.
  5. For Critical Access Hospitals:  CAHs have a unique safety net role and statutory charge per Section 1820 of the Social Security Act.  That statute initially gave state governors the authority to designate necessary provider CAHs, a number of which did not make a distinction between rural and urban designations. 

RUCA Codes

(Code Definitions: Version 2.0)

  1. Metropolitan area core: primary flow within an Urbanized Area (UA)
  2. Metropolitan area high commuting: primary flow 30% or more to a UA
  3. Metropolitan area low commuting: primary flow 10% to 30% to a UA
  4. Micropolitan* area core: primary flow within an Urban Cluster (UC) of 10,000 through 49,999 (large UC)
  5. Micropolitan* high commuting: primary flow 30% or more to a large UC
  6. Micropolitan* low commuting: primary flow 10% to 30% to a large UC
  7. Small town core: primary flow within an Urban Cluster of 2,500 through 9,999 (small UC)
  8. Small town high commuting: primary flow 30% or more to a small UC
  9. Small town low commuting: primary flow 10% through 29% to a small UC
  10. Rural areas: primary flow to a tract outside a UA or UC (including self)

Allocation for Skilled Nursing Facilities

HHS is distributing $4.9 billion to skilled nursing facilities (SNFs) to help them combat the devastating effects of this pandemic.


Allocation for Uninsured Patients

A portion of the funds will be distributed to healthcare providers who have provided treatment for uninsured COVID-19 patients on or after February 4, 2020. Providers can request claims reimbursement and will be reimbursed at Medicare rates, subject to available funding.

To request reimbursements, visit the COVID-19 Uninsured Program Portal.


Allocation for Indian Health Service

HHS is distributing $500 million to Indian Health Service facilities, distributed on the basis of operating expenses. This funding complements other funding provided to expand IHS capacity for telehealth and testing.


Additional Allocations

Separate funding will be distributed to other providers, including dentists and providers that solely take Medicaid.

Patient Protections

We are working to remove financial obstacles that might prevent people from getting the testing and treatment they need from COVID-19.

Protecting uninsured patients

Every health care provider who has provided for COVID-related treatment of uninsured patients on or after February 4, 2020, may request claims reimbursement and will be reimbursed at Medicare rates, subject to available funding.

Insurance protections

Private insurers must waive an insurance plan member's cost-sharing payments for COVID-19 testing.

  • Some private insurers, including Humana, Cigna, UnitedHealth Group, and the Blue Cross Blue Shield system, have agreed to waive cost-sharing payments for COVID-19 treatment related for insured patients.

Providers/recipients must not seek collection of out-of-pocket payments from a presumptive or actual COVID-19 patient that are greater than what the patient would have otherwise been required to pay if the care had been provided by an in-network provider.

No surprise billing

Recipients/providers must not to seek collection of out-of-pocket payments from a presumptive or actual COVID-19 patient that are greater than what the patient would have otherwise been required to pay if the care had been provided by an in-network provider.

Recipients/providers must abstain from "balance billing" any COVID-related treatment/any uninsured patient for whom the provider seeks reimbursement for COVID-19-related treatment.

Preventing fraud and misuse of the funds

Recipients/providers must submit documents sufficient to ensure that these funds were used for healthcare-related expenses or lost revenue attributable to the coronavirus.

Content created by Assistant Secretary for Public Affairs (ASPA)
Content last reviewed on May 27, 2020