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Congress Gave Hospitals and Providers $100B in the Coronavirus Stimulus Package: What Now?

The COVID-19 pandemic has caused immense financial strain on healthcare systems across the nation. As a result, Congress passed a $3 trillion stimulus package that includes $100 billion for hospitals and other healthcare providers. While this relief for healthcare organizations is much needed, it can also add confusion. What can organizations use these stimulus funds for? What are the risks and compliance requirements?

Bobbi Brown, Senior Vice President of Professional Services, and Dan Orenstein, General Counsel at Health Catalyst, discuss answers to these questions and more. With over thirty years of experience in healthcare financial planning and analysis, Bobbi shares her unique perspective on the stimulus package and how providers can use these funds in their recovery planning. Dan has over two decades of legal experience in healthcare and discusses the specifics of compliance requirements.

In this webinar, Bobbi and Dan address the following:
-Explain significant sections of the four laws passed, including the CARES Act.
-Review program details of the Provider Relief Fund.
-Explore the use of the funds and compliance with terms and conditions.
-Discuss policy changes to better prepare for healthcare emergencies.

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Congress Gave Hospitals and Providers $100B in the Coronavirus Stimulus Package: What Now?

  1. 1. Congress Gave Hospitals and Providers $100B in the Coronavirus Stimulus Package: What Now? Bobbi Brown Senior Vice President, Professional Services Health Catalyst June 11, 2020 Dan Orenstein General Counsel Health Catalyst
  2. 2. Explain major sections of four laws passed including CARES act Review the stimulus programs Explore use of funds and compliance with terms & conditions Discuss impacts and improvements for healthcare policy Objectives
  3. 3. Stimulus Dollars 3
  4. 4. © 2020 Health Catalyst Reading Regulations- Challenge 4
  5. 5. © 2020 Health Catalyst H.R. 6074 Passed March 6, 2020 for • Dollars for HHS, Dept of State, Small Business Admin • Vaccines and other medicines • Grants for state, local, and tribal public health agencies • Loans for affected small businesses • Evacuations and emergency preparedness activities at U.S. embassies and other State Department facilities • HHS can waive restrictions for telehealth Coronavirus Preparedness & Response Supplemental 5 $8.3 B
  6. 6. © 2020 Health Catalyst H.R. 6201 Passed March 18, 2020 for • 😷 Paid sick leave • Tax credits • COVID-19 testing- reimburse cost for uninsured individuals • Medicaid fund-FMAP 6.2% increase • Expanding food assistance (SNAP) Families First Coronavirus Response Act (FFCRA) 6 $3.5 B
  7. 7. © 2020 Health Catalyst H.R. 748 Coronavirus Aid, Relief, and Economic Security Passed March 27, 2020 • Purpose: Providing emergency assistance and health care response for individuals, families and businesses affected by the 2020 coronavirus pandemic. CARES Act 7 $2.2 Trillion • Individual- unemployment • Small Business • Large Business- other industries • Public Health • Education • Safety Net • State and Local Government • $100 Billion Distribution Providers • $30B Grants • $20B Grants • $10B Grant- hard hit • $10B Rural grants • $.4 B Indian Services • $29.6B SNF, future hot spots, uninsured
  8. 8. © 2020 Health Catalyst H.R. 266 Continuation of CARES Act Signed on April 24, 2020 Paycheck Protection Program and Health Care 8 • Set asides or carve outs established – Clarifies eligibility • Allocations changed for hospitals – Net revenue – Hardest-hit areas • Carve out for rural, Indian Health $484 Billion
  9. 9. © 2020 Health Catalyst Continued Economic Stimulus H.R. 7070 Paycheck Protection Program Flexibility Act of 2020 Passed on June 3, 2020 • Covers period up to 24 weeks (was 8 weeks) • Maturity up to 5 years (was 2 years) • Reduce minimum spend on payroll to 60% (was 75%) • New safe harbors for forgiveness Additional Stimulus-Bill Passed by House and Stalled in Senate 9
  10. 10. © 2020 Health Catalyst For an additional amount for “Public Health and Social Services Emergency Fund”, $100,000,000,000 to remain available until expended, to prevent, prepare for, and respond to coronavirus, domestically or internationally, for necessary expenses to reimburse, through grants or other mechanisms, eligible health care providers for health care related expenses or lost revenue that are attributed to coronavirus. 10 Language
  11. 11. © 2020 Health Catalyst Things are Dynamic 11 June 2, 2020 Press release HHS Provides Additional $250M to help U.S. Healthcare systems respond to COVID-19 June 4, 2020 Press release HHS Announces New Lab Data Reporting Guidance for COVID-19
  12. 12. Specifics Many sources of $ Various Federal Agencies Funds distributed in many ways Short and long term dollars
  13. 13. © 2020 Health Catalyst Which COVID-19 program was most helpful for your organization? • Provider Relief Fund – 40% • Accelerated and Advance Payment – 12% • FCC- COVID-19 Telehealth Program – 10% • FEMA Public Assistance Program – 0% • Not sure – 38% Poll Question #1 13
  14. 14. © 2020 Health Catalyst Provider Relief Fund: NOT A LOAN, GRANT 14 • Immediate infusion of $50B • First round: $30B sent to provider accounts on April 10, 2020 • Second round: $20B distribution began April 26, 2020 Specific time period to sign-in and attest to terms and conditions • 90 days from receipt of payment Allocation Formula: • First round: Your Medicare FFS revenue to Medicare FFS ($121,000,000/$484,000,000,000) x $30B = $7,500,000 • Second round: Revenue from tax reports or incurred losses (Tax Yr Rev x $50B)/$2.5T- Initial funds from first round Distribution data is public. For $30M: 318,168 providers attested/received an allocation as of end of May
  15. 15. © 2020 Health Catalyst Billed Medicare in 2019, Not excluded from participation Payment used only to prevent, prepare for and respond to coronavirus. Reimbursement for health care related expenses or lost revenue Not used to reimburse expenses/losses from other sources. No balance billing Submit reports: • >$150,000 no later than 10 days after end of quarter • Amount of funds received, amount of funds expend • Detail list of actions, projects, jobs created/retained, subcontracts • Agree to cooperate in audits Terms and Conditions on Provider Relief Fund 15
  16. 16. © 2020 Health Catalyst Dollars distributed to 395 hospitals with highest proportion of COVID-19 inpatient cases (70% of cases) Fact: • 184,037 COVID-19 inpatient cases thru April 10- each recipient funding equal $76,975 per case Distributed $10B based on IP admissions and $2B on proportion of disproportionate share High Impact Hospitals Covid-19 Response $12B 16 Source: High Impact Relief Fund CARES act website $ # of Hospitals NY 5,026B 90 NJ 1,708B 53 MI 900M 30 IL 694M 33 MA 495M 22 LA 399M 15 Top 6 States
  17. 17. © 2020 Health Catalyst Dollars distributed May 22, 2020 to 13,237 facilities Uses: • Testing • Staffing • Lost revenue • PPE Distributed with base $50,000 + $2,500 per bed (6 or more certified beds) Must comply with audit and reporting rules SNF Covid-19 Response $4.9B 17 Source: SNF Relief Fund CARES act website $ Millions NY 394 TX 392 CA 356 OH 314 IL 289 Top 5 States
  18. 18. © 2020 Health Catalyst Dollars distributed 7,988 providers 13,237 facilities • Rural acute care hospitals • Critical Access Hospitals (CAH) • Rural Health Clinics • Community Health Centers in rural Distributed with base payment + % of annual expense Must comply with audit and reporting rules Rural Covid-19 Response $10B 18 Source: Rural Relief Fund CARES act website $ Millions TX 634 MN 385 IA 383 KS 382 KY 372 OH 368 WI 363 Top 7 States
  19. 19. © 2020 Health Catalyst 1. Fund primary health care- grants under HRSA Amount $100M Average award $70,000 (base amount plus volume) Health Centers Currently serve 1 in 12 people nationwide 19 Two separate grants – 1387 grants awarded as of April, no applications 2. Fund detection, prevention, treatment, diagnosis HRS $1.32B Average award $950,000 (base amount plus volume) Reporting requirements: Quarterly progress reports required
  20. 20. © 2020 Health Catalyst Steps: 1. Enroll as provider participant 2. Check patient eligibility 3. Submit patient information (submit claims electronically) 4. Receive payment via direct deposit 5. No balance bill to patient 6. Agree to audit More for Providers – Covid19 Claims Reimbursement 20 Reimbursement for costs of COVID19 - testing, services to uninsured ASPR, CMS $1B paid to provider through billing cycle for services after February 4th. Paid at Medicare rates, Training held April 29, 2020
  21. 21. © 2020 Health Catalyst As of April 26 • CMS received 21,000 hospital requests • 24,000 for part B As of May 20 • Payout documented at $92M Part A • $8M Part B More for Providers – Accelerated and Advance Payment 21 Loans: Accelerate Cash flow, Funds to prevent, prepare for and respond to COVID-19 expenses and lost revenue-PPE, supplies, construction, surge ASPR $100B Detail on next slide- program under evaluation. Reporting, Documentation and audits- recipients required to submit reports and maintain documentation
  22. 22. © 2020 Health Catalyst Accelerated and Advance Payment for Providers 22 Eligibility Process Recoupment 1. Billed Medicare claims within last 180 days 1. MAC website and submit form 1. Due after 120 days and CMS will lower claims payment to recoup 2. Not in bankruptcy/no outstanding Medicare delinquencies 2. Hospitals request up to 100% of six months of payments 2. Hospitals have one year to repay, other providers 210 days 3. Not under active medical review 3. Others request up to 100% of three months of payments April 26th CMS suspends and reevaluating program.
  23. 23. © 2020 Health Catalyst Hospital Medicare Payments Changes & Delays Reimbursement through billing process 23 • Suspend 2% sequestration (May-Dec 2020) • Increase 20% MSDRG payment increase for patients diagnosed with COVID19 – April 15th published waiver- use codes B97.29(prior to March 31) U07.1 (COVID-19) (April 1, 2020) • DSH reductions suspended until Dec 2020 • Pausing reductions for DME (Durable Medical Equipment) • Stopping reductions in clinical lab test going to start in 2021 (delay to 2022) • Flexibility to bill home and community-based services
  24. 24. © 2020 Health Catalyst Physician/Small Providers Small Business Association Loans < 500 Employees, via Banks 24 Paycheck Protection Program (PPP) • 2.5X monthly payroll (max of $10M) at 4% • No payment 12 months, then 10-year loan • Loan Forgiveness for maintaining payroll Economic Injury Disaster Loan (EIDL) • Up to $2M at 3.75% • 30 years repayment • Cannot duplicate funds used for PPP As of May 23, 2020 4.4 loan count total of $511B Average loan $116K 64% of loan count for loans $50K and under
  25. 25. © 2020 Health Catalyst As of May 25, FCC awarded $68.2M to 185 providers Separate FCC pilot program Connected Care Pilot • Over 3 years cover costs of eligible services and equipment • Target low income, veterans • Application due in mid-May FCC Covid-19 Telehealth Program 25 Source: Sage Growth/Black Box market Research: Evolving US Healthcare Needs &Attitudes during Covid-19 April 9, 2020 Main program for providers Application process on-line Help providers provide telehealth services to patients at their home or remote locations.
  26. 26. © 2020 Health Catalyst Example of FCC Grant (Public Information) Program for equipment, devices not for personnel 26 Applicants: 1. Monthly bill with an invoice to FCC 2. Attach documentation of actual payment 3. Agree to audit
  27. 27. © 2020 Health Catalyst States and Local Government Plus Pnp PNP is Private Non-Profit 27 Public health emergency management activities for prevention and response to COVID-19 Emergency work such as labor (OT, premium), supplies, equipment Work must be documented and reasonable in nature and amount Public assistance grants under FEMA $100M Applications accepted-duration of public health emergency
  28. 28. © 2020 Health Catalyst CMS • Reporting requirements- delay in due date • Cost report filing- delay in due dates • Telehealth services • Inpatients in temporary expansion sites • Critical Access Hospitals (CAH) ability to go above 25 beds and 96 hr. LOS • Distinct units • Discharge planning • Stark and Anti-kickback Office for Civil Rights- No penalties for HIPAA violations if operating in good faith during pandemic. Flexibilities and Waivers 28
  29. 29. © 2020 Health Catalyst As funds are distributed, healthcare organizations now need to comply with terms and conditions. Which one program has you most concerned for compliance/audits? • Provider Relief Fund – 35% • Accelerated and Advance Payment – 17% • PPP Paycheck Protection Program – 30% • FCC- COVID-19 Telehealth – 11% • FEMA-Public Assistance Grant – 7% Poll Question #2 29
  30. 30. © 2020 Health Catalyst Summary of Stimulus Bills 30 Added note: CARES act includes section 3854 Treatment of Sunscreen Innovation Act Many programs and sources of money waivers of regulations helpful Need to prepare and plan Documentation of use of funds is critical
  31. 31. Provider Relief
  32. 32. © 2020 Health Catalyst Provider Relief Fund - Recap Terms and Conditions Practical Considerations for the Use of Provider Relief Funds Reporting, Compliance, and Audit Policy Changes to Better Prepare for Public Health Emergencies Disclaimer: This presentation is for information purposes only. It is not legal or compliance advice. For legal and compliance advice, you should consult your legal and compliance advisors. Contents 32
  33. 33. © 2020 Health Catalyst Eligibility and Payment Formula Under the General Distribution Eligibility – • Provider must have billed Medicare on a fee-for-service basis in 2019. • Provide or provided after January 31, 2020 diagnoses, testing, or care for individuals with possible* or actual cases of COVID-19. *”HHS broadly views every patient as a possible case of COVID-19.” Calculation – Lesser of 2% of a provider’s 2018 net patient revenue or the sum of incurred losses for March and April, 2020. • Estimate of payment: (Individual Provider Revenues/$2.5 Trillion) X $50 Billion 33
  34. 34. © 2020 Health Catalyst Eligibility and Payment for the Rural Targeted Distribution Eligibility – • Provider must be a rural acute care general hospital, Critical Access Hospital (CAH), Rural Health Clinic (RHC) or Community Health Center in a rural area. • Provide or provided after January 31, 200 diagnoses, testing, or care for individuals with possible* or actual cases of COVID-19. *”HHS broadly views every patient as a possible case of COVID-19.” Calculation – Minimum base payment plus a percent of annual expenses. • Minimum amount of $100,000 covers RHCs with no reported Medicare claims, such as pediatric RHCs, and CHCs lacking expense data. • Minimum amount of $1M for rural acute care general hospitals and CAHs. • Rural hospitals received a graduated base payment plus approx. 2% of total operating expenses reported on most recent, publicly available cost reports. 34
  35. 35. © 2020 Health Catalyst Eligibility and Payment for the High-Impact Area Targeted Distribution Eligibility – • Hospitals and health systems that provided inpatient care for 100 or more COVID-19 patients through April 10, 2020. • 336 payments made to 395 hospitals and health systems. Calculation – • $10 billion allocated based on a fixed amount per COVID-19 admission. • Remaining $2 billion distributed based on each hospital’s portion of Medicare’s Disproportionate Share Hospital (DSH) payments and Medicare uncompensated Care payments (UCP). 35
  36. 36. © 2020 Health Catalyst Provider Relief Funds Showed up in Your Account… 36
  37. 37. © 2020 Health Catalyst There Are a Few Things You Need to Do in Connection With the Provider Relief Fund 37 • Use the funds in accordance with statutory requirements and terms and conditions • Attest to terms and conditions • Report on a regular basis on use of funds • Prepare for audits and ongoing compliance
  38. 38. © 2020 Health Catalyst Can your organization use Provider Relief Funds for operational expenses other than direct COVID-19 healthcare expenses? • Yes – 71% • No – 29% Poll Question #3 38
  39. 39. © 2020 Health Catalyst “The Recipient certifies that the Payment will only be used to prevent, prepare for, and respond to coronavirus, and shall reimburse the Recipient only for health care related expenses or lost revenues that are attributable to coronavirus.” Key terms to discuss: • “Health care related expenses” – How should providers think about the statutory enumerated list? • “Lost revenues” – Operational costs that are included Documentation is critical to showing appropriate use of funds • Mechanism to track expenses should be used. Tracking should include the use of funds by the billing entity that received the funds. Terms and Conditions – Use of Funds 39
  40. 40. © 2020 Health Catalyst “The term ‘healthcare related expenses attributable to coronavirus’ is a broad term that may cover a range of items and services purchased to prevent, prepare for, and respond to coronavirus, including: • supplies used to provide healthcare services for possible or actual COVID-19 patients; • equipment used to provide healthcare services for possible or actual COVID-19 patients; • workforce training; • developing and staffing emergency operation centers; • reporting COVID-19 test results to federal, state, or local governments; • building or constructing temporary structures to expand capacity for COVID-19 patient care or to provide healthcare services to non-COVID-19 patients in a separate area from where COVID-19 patients are being treated; and • acquiring additional resources, including facilities, equipment, supplies, healthcare practices, staffing, and technology to expand or preserve care delivery.” See “CARES Act Provider Relief Fund FAQs,” fund-general-distribution-faqs.pdf Use of Funds – “Health care related expenses” 40
  41. 41. © 2020 Health Catalyst “Providers can use Provider Relief Fund payments to cover any cost that the lost revenue otherwise would have covered, so long as that cost prevents, prepares for, or responds to coronavirus. Thus, these costs do not need to be specific to providing care for possible or actual coronavirus patients, but the lost revenue that the Provider Relief Fund payment covers must have been lost due to coronavirus. HHS encourages the use of funds to cover lost revenue so that providers can respond to the coronavirus public health emergency by maintaining healthcare delivery capacity, such as using Provider Relief Fund payments to cover: • Employee or contractor payroll • Employee health insurance • Rent or mortgage payments • Equipment lease payments • Electronic health record licensing fees” The above are examples only. Other operating expenses will also constitute a qualifying use of funds if the above requirements are met. Use of Funds – “Lost Revenue” 41
  42. 42. © 2020 Health Catalyst • Recipient will not use the funds to reimburse expenses or losses that have been, or can be, reimbursed from other sources. • General Provisions: Prohibits use of funds for various items, including excessive executive pay, gun control advocacy, lobbying, abortion funding, embryonic research, unpaid federal tax liability. • Recipient certifies that it will not seek to collect from the patient out-of-pocket expenses in an amount greater than what the patient would have otherwise been required to pay if the care had been provided by an in-network recipient. Terms and Conditions – Other terms 42
  43. 43. © 2020 Health Catalyst • A recipient of funds must confirm agreement with the terms and conditions by written attestation. • The deadline for attestation has been extended to 90 days from the date of receipt of payment. – E.g., Attestation due July 11 for April 10 payment, July 23 for April 24 payment • Reporting - Providers receiving more than $150k of funds must provide quarterly reports containing a detailed list of all projects or activities for which the funds were used. Attestation and Reporting 43
  44. 44. © 2020 Health Catalyst • Total amount of funds received from HHS • Amount of expenditures • Detailed list of all projects or activities for which covered funds were expended: – Name and description of project/activity – Estimated number of jobs created or retained, where applicable – Detailed information on any sub-contracts or subgrants awarded. Reporting – What Needs to Be Included 44
  45. 45. © 2020 Health Catalyst • Providers must maintain appropriate records and cost documentation to substantiate compliance with the terms and conditions. • Providers must agree to submit copies of records upon request and comply with all audits by HHS and OIG. – The CARES Act authorizes OIG to audit both interim and final payments made under the program. – OIG is required to report to Congress on its audit activity. – There is likely to be a high level of auditing and oversight going forward. Records Requirements and Audits 45
  46. 46. © 2020 Health Catalyst We Continue to See Heroic Efforts: But COVID-19 exposed many ways in which our public health infrastructure was unprepared for the crisis. 46 Photo source: PBS Utah,
  47. 47. © 2020 Health Catalyst Policy Changes : Data Use – Expand data use rights to enable use and disclosure by business associates of covered entities of limited data sets and de-identified information during the COVID-19 emergency. • This will enable accelerated research on effective clinical interventions and treatment pathways, and will help expand patient monitoring and help with contact tracing efforts. Testing and Contact Tracing – Expand immediate funding to states, localities, and health systems to support their testing and contact tracing efforts. That can help to be better prepared at the health system, local, state, and national levels in the near term 47
  48. 48. © 2020 Health Catalyst Policy Changes : Hospital and Health Systems Public Health Response Infrastructure – Provide funding to hospitals and health systems to build out their epidemic response data systems, including registries, reporting, surveillance, dashboards Funding to States and Localities for Public Health Response Infrastructure – Provide funding to States to build out their public health response data systems, including registries, reporting, surveillance, dashboards That can help to be better prepared at the health system, local, state, and national levels in the intermediate term 48
  49. 49. © 2020 Health Catalyst Policy Changes : National Public Health Response Infrastructure – Provide funding for the development of a national Epidemic/Pandemic Information Network. • Overhaul CDC’s data aggregation and reporting system • Expand the mission of PCORI and National Patient-Centered Clinical Research Network (PCORNET) • Mandate healthcare data vocabulary standards in EHRs That can help to be better prepared at the health system, local, state, and national levels in the intermediate term 49
  50. 50. © 2020 Health Catalyst Policy Changes : National Patient Identifier – Establish a national patient identifier. This will be critical in public health emergencies to (a) enable healthcare organizations to link patients across providers and across HIEs, and (b) for surveillance and contact tracing efforts. HIPAA – Modify HIPAA to: • In an emergency, grant waivers, and enable data aggregation, and use and disclosure of limited data sets and de-identified information for public health purposes and research. • Implement systems to enable full transparency to patients and to support greater control of uses and disclosures of their data when there is no emergency. Interoperability – Continue to support interoperability across the healthcare industry, and enforce against information blocking practices. That can help to be better prepared at the health system, local, state, and national levels in the intermediate term 50
  51. 51. © 2020 Health Catalyst Sept. 1 – 3, 2020 • Transformative Role of Data and Analytics in the New Normal • Unique and Innovative Virtual Experience • Nationally Recognized Keynotes • Educational, Case Study, and Technical Breakouts • Virtual Analytics Walkabout Projects • Virtual Machine Learning Marketplace • Digital Innovation Showcase • Virtual Networking (”Braindate”) • CME Accreditation for Clinicians The Healthcare Analytics Summit 2020 - Virtual 51 Cost : $99 per registrant Register here: Eric Topol, MD Author, AI expert and healthcare futurist Vice Admiral Raquel C. Bono, MD Former CEO and Director of the U.S. Defense Health Agency and Head of Washington state’s COVID-19 healthcare response team Yonantan Adiri CEO and founder, Healthy.IO, former CTO to Israeli President Shimon Peres Ari Robicsek, MD Chief Medical Analytics Officer at Providence St. Joseph Health and a specialist in infectious disease More keynotes to be announced soon!
  52. 52. © 2020 Health Catalyst Would you like to be considered for a complimentary pass to attend the Virtual Healthcare Analytics Summit? • Yes • No Poll Question #4 52
  53. 53. Q&A 53 Bobbi Brown Senior Vice President Professional Services Health Catalyst Dan Orenstein General Counsel Health Catalyst
  54. 54. Thank you!