This morning, the U.S. Department of Health and Human Services (HHS) announced that Medicare-enrolled providers would receive a direct deposit disbursements today totaling $30 billion. The $30 billion is part of the $100 billion Public Health and Emergency Fund created by the  Coronavirus Aid, Relief and Economic Security Act (CARES Act) to provide financial assistance to physician practices, hospitals and other providers negatively impacted by the COVID-19 pandemic. 

This is welcome relief for physician practices. The distribution policy adopted by HHS reflects the recommendations from organized medicine sent to HHS Secretary Alex Azar by the American Medical Association, California Medical Association (CMA) and 136 other medical societies earlier this week, although it is not exactly what we proposed. CMA has been aggressively advocating to Congress and HHS for additional financial assistance to sustain distressed physician practices.

The funds disbursed today do not need to be paid back. The money was deposited via Optum Bank and is labeled “stimulus payment” or ”HHSPAYMENT.” Note that the funds will go to each physician organization's TIN that normally receives Medicare payments, not to each individual physician.

The funds may be used either for health care related expenses or for lost revenues that are attributable to coronavirus. According to HHS, “providers will be distributed a portion of the initial $30 billion based on their share of total Medicare [fee-for-service (FFS)] reimbursements in 2019. Total FFS payments were approximately $484 billion in 2019.”

HHS adds that providers “can estimate their payment by dividing their 2019 Medicare FFS (not including Medicare Advantage) payments they received by $484,000,000,000, and multiply that ratio by $30,000,000,000.” The amounts received appear to be nearly  three weeks of Medicare payments. For additional details on the calculations, see the HHS provider relief webpage. 

Each organization receiving grants will need to attest to certain HHS terms and conditions within 30 days of receiving the grant. As part of the terms and conditions for receiving the funding, HHS is banning balance billing for out-of-network care provided for COVID-19 related care. HHS states,  “… for all care for a possible or actual case of COVID-19, a [provider] must certify  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 [provider].”

There are additional conditions for receipt of the funding that CMA is working to clarify, such as a requirement that the funding “recipient  certify that it will not use the payments to reimburse expenses or losses that have been reimbursed from other sources or that other sources are obligated to reimburse," which could interfere with small business loan payments.  

HHS said it is working to disperse additional funding to providers with lower shares of Medicare reimbursement (such as pediatricians, allergists and OB-GYNs) and Medicaid providers, and for COVID-19 treatment for the uninsured. The current policy does not help providers with a greater Medicare Advantage volume. 

CMA has and continues to strongly advocate for additional financial assistance for physician practices that are losing revenue due to the shelter-in-place rules and orders to delay non-essential services. 

In California , CMA has also asked Governor Gavin Newsom to require or incentivize health plans and insurers to provide supplemental financial assistance or stabilization grants for their network physicians that are financially distressed. CMA estimates that, statewide, up to 34% of Californians (more than 13 million people) could lose access to their physician absent financial assistance to maintain the financial viability of physician practices. It is critical that we continue to support financial relief for physician practices to ensure a sufficient physician workforce is available in this country not only throughout the COVID-19 pandemic, but also as demand for medically necessary care is building while the state's health care resources are focused on treatment of COVID-19 patients.

For a full list of financial resources available to physician practices during the COVID-19 emergency, see CMA’s COVID-19 Financial Toolkit for Medical Practices