An additional $20 billion in “Provider Relief Funds” is being made available pursuant to the Coronavirus Aid, Relief, and Economic Security (CARES) Act through a “Phase 3” General Distribution. However, time is running out for health care providers to apply to the U.S. Department of Health and Human Services for these funds. The application deadline for what may be the final round of relief funds is November 6 at 11:59 pm ET.

Who Can Apply?

Phase 3 of the General Distribution allows health care providers who did not begin operation until after January 1, 2020 to apply for funds and allows health care providers who have already received payments equaling 2% of patient revenue to receive additional funds.

On October 22, HHS announced that additional providers, such as residential treatment facilities, chiropractors, and eye and vision providers that have not yet received Provider Relief Fund distributions, are also eligible to receive funds from this last distribution.

When Will Distributions Be Made?

HHS intends to issue Phase 3 – General Distribution payments as soon as practical following the November 6, application deadline. Entities that have not yet received 2% of annual revenue from patient care will be first to receive funds from the Phase 3 General Distribution.

The Phase 3 final payment amounts for applicants that have already received payments equaling 2% of annual patient care revenue will be determined once all applications have been received and reviewed.

How Will HHS Calculate 2% of Annual Revenue for Providers in Operation Less Than a Year?

Providers that began providing patient care in 2020 will be paid approximately 2% of patient care revenue based on the applicant’s reported financial information for those months in 2020 that they were in operation.

HHS has also stated that it may consider data from the same type of provider as the applicant when assessing the amount to be paid. However, no additional details have been provided at this time regarding how that assessment of similar providers will be utilized to assess funds to be received.

How Will Distributions Over 2% Of Annual Revenue Be Calculated?

The Phase 3 General Distributions will also take into account the financial impact of COVID-19 on individual providers and assess whether additional funds should be distributed to certain providers. The actual additional amount to be received will depend in part on the CARES Act funds available after the Phase 3 General Distribution to those that have not yet received an amount equivalent to 2% of annual revenue.

In assessing whether to award a provider additional funds over the 2% annual revenue amount, HHS will consider: (1) a provider’s change in operating revenue from patient care; (2) a provider’s change in operating expenses from patient care, including coronavirus expenses, and (3) payments received by the provider as part of previous Targeted Distributions.

Additional Considerations

  • Providers that are newly eligible for receipt of funds, such as those that did not operate until after January 1, 2020, should submit their TIN for validation as soon as practical in order to ensure that they can submit an application before the November 6 deadline.
  • Providers that previously submitted applications will need to submit a new application to receive additional funds.
  • Providers must agree to certain Terms and Conditions related to the use of funds.
  • Providers receiving more than $10,000 must meet certain Reporting Requirements. See HHS Sets Reporting Deadlines for CARES Act Provider Relief Funds 

Providers are encouraged to start the application process as soon as possible so as to not miss out on what may be the last general distribution of funds.