On March 27, Congress passed the largest stimulus bill (or emergency relief, depending on who you ask) in United States history. We previously provided an update covering one aspect of the CARES Act, the Paycheck Protection Program, which provides relief to small businesses in the form of subsidized loans. This update will provide an overview of a program designed to assist health care providers with the added costs they are inevitably facing to deal with the Covid-19 pandemic.

The Act added $100 billion in new funding to an existing program, the Public Health and Social Services Emergency Fund (PHSSE), to be distributed to hospitals, nursing homes, clinics, and other health service providers throughout the country. PHSSE is administered by the Department of Health and Human Services (DHHS)’s Assistant Secretary for Preparedness and Response (ASPR). The Act directs the Secretary of DHHS to accept applications for the funding on a rolling basis.

The Act is somewhat sparse on details of what expenses are eligible for funding. It is written broadly, presumably to give care providers adequate flexibility to spend on whatever, in their professional judgement, their communities most need to respond to the virus. Funding can be prospective or retrospective, meaning it can be in the form of a reimbursement for spending which has occurred, or it can be for items which the prover feels it needs to respond to the crisis that it does not otherwise have funds available for. Notably, one eligible expense is lost revenue attributable to the coronavirus. If, for instance, a provider needed to postpone or cancel elective procedures to avoid unnecessary social contact or to free up resources to deal with Covid-19 patients or testing, those lost revenues would be eligible for reimbursement through PHSSE.

Of course, providers are not permitted to get reimbursed for the same expense from multiple sources. If the provider receives compensation for a given expense through a distinct state program, or the expense is covered in its insurance policy, PHSSE will not double-compensate the provider. But, if there are multiple avenues of funding available, providers should apply for all that are potentially applicable. Once one source of funding comes to fruition, the provider can withdraw applications to others, although it may not be permissible to withdraw an insurance claim upon receipt of grant funding.

Typically, ASPR manages a PHSSE budget of $2.6 billion. Given the dramatic increase in the size of the program, and the highly irregular circumstances of its pending dispersal, ASPR is taking care to design an application procedure to fits the needs of the moment. Similar to other federal reimbursement programs, providers who want to apply for grant funding should be documenting as thoroughly as possible any and all expenses and revenue declines, along with their relation to responding to the Covid-19 pandemic, as possible. 

As of right now, that procedure has not been made public. We are carefully monitoring updates from DHHS to quickly react to such procedure when it becomes available.   

Questions and Updates

Please do not hesitate to contact the Wladis Law Firm if you have any questions about the above information. We will do our best to provide you with updates and will be available to answer questions as circumstances change. We may be reached at (315) 445-1700 or by e-mailing Attorney Jennifer Huse Granzow at jgranzow@wladislawfirm.com or by reaching out to your everyday firm contacts.