HHS changed the rules for $50 billion in provider COVID-19 relief grants the day before providers are required to submit financial information to receive their full share of payments, according to the department's website.
HHS is requiring providers to send their money back Wednesday if they still want to be eligible for their full grant allocation but aren't ready to accept the grant terms and conditions. Providers could re-apply for funds, and would then have 90 days to agree to the terms and conditions of the funds.
As of Friday, providers had not yet attested to grant terms for a significant share of the money HHS has sent out so far.
HHS sent out the $50 billion general distribution based on 2018 net patient revenue in two separate rounds. The first, sent two weeks after the CARES Act was signed, was a $30 billion tranche sent automatically based on 2019 fee-for-service reimbursement. The second tranche of $20 billion was an attempt to reconcile the initial tranche with the overall net patient revenue formula.
Providers that file Medicare cost reports, such as hospitals, got funds from the $20 billion tranche automatically. But physician practices and others who weren't in the automatic disbursement had to submit revenue information to ensure they got their share of the second round of funds.
The deadline for submitting financial data is Wednesday. Data provided by the agency showed providers have not yet attested to terms for roughly one-third of the combined $72 billion HHS sent out for the general distribution, rural providers and providers in COVID-19 hotspots.
But Wednesday's deadline causes timeline issues, as providers have to agree or reject to the grant terms and conditions to be eligible for more money. HHS has extended the initial 30-day attestation deadline until 90 days, which extends beyond Wednesday.
HHS this week updated its website to specify that if providers aren't ready to attest to the grant funds they have received but want to apply for their full share of grants, they can return grant in its entirety, and then submit their financial information and wait for HHS to send the full payment.
"Rejection of an initial payment will not preclude a provider from receiving their total general distribution amount that is approximately 2% of revenues," the updated site reads.
But it's unclear how long the funds could take to be returned. HHS had initially said that providers would receive funds in 10 business days, but on Friday updated guidance to say the payments would be sent "as quickly as possible." Providers would then have 90 days after receipt of payment to agree to the grant terms.
"It feels like a big unknown, to send back money that they received, and then wait and see what the redistribution process is based on the submission. I don't think we have a timeline," McDermottPlus Consulting vice president Mara McDermott said.
HHS did not respond to questions about the website updates.
It would be in many providers' interest to submit financial information to receive further payments, especially for specialties that have payer mixes more reliant on Medicare Advantage, private insurance and Medicaid, said RSM US senior analyst Rick Kes. But providers may not want to send money back and wait for further calculations, as they may need the money to offset persistent low service volumes and COVID-19-related expenses.
McDermott Will & Emery partner Joshua Spielman said some private equity-owned providers have been reluctant to submit financial information because they weren't sure they would get substantially more money, and their financial data could be subject to public disclosure.
The initial $30 billion tranche does not include a public disclosure requirement in its terms and conditions, while the second $20 billion does. HHS also lists on its attestation portal that it intends to make the payment recipients and amounts public.