Government Support of SNFs During COVID‐19, Generally · An Overview of COVID‐19 Billing Waivers ... cough, O2 sats of 87 and red eyes. A COVID 19 test sample has been collected

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April 16, 2020

An Overview of COVID‐19 Billing Waivers and Additional Funding Sources

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Washington Health Care Association| September 16, 2020 | 3:00 pm – 4:30 pm PT

Presented by: Mark Reagan and Bill Ulrich

Government Support of SNFs During COVID‐19, Generally

Overview of Funding Sources

On March 18, 2020, the first major federal financial package on the Coronavirus pandemic was signed into law. FFCRA provides paid sick leave and expanded family and medical leave to some workers, funds nutritional assistance, and establishes free testing for COVID‐19. The Department of Labor’s (Department) Wage and Hour Division (WHD) administers and enforces the new law’s paid leave requirements. These provisions will apply from the effective date through December 31, 2020.

The second major federal relief package for the COVID‐19 pandemic, the $2 trillion CARES Act includes direct payments to American taxpayers, extended and increased unemployment benefits, a new unemployment assistance program for self‐employed workers, small business relief, Federal Grants to various businesses and Payroll Protection Program loans for small business.

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Significant Questions:

• Are funds received through the CARES Act and Payroll Protection Program loans or grants?

• Does the Provider keep to keep the money or are these funds subject to recoupment?

• Should these funds be recognized as revenue or an offset to related expense?

• How will these funds be recorded on the Medicare and Medicaid cost report?

• Will the receipt of this money have a downstream negative impact on our Medicaid rate?

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Hierarchy of COVID 19 Funding

A dollar spent should only be counted to “prove” one and only one funding source

Non of the funding sources “reimburse” the provider for COVID 19 related costs.Rather, the Provider must demonstrate COVID 19 related costs [or lost revenue] in order to prove the money was spent in accordance with various guidelines

The difference between “reimbursement” for costs and “proving we spent” is fundamental to tracking costs.

There is a logical order that funding should be substantiated

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PPP Loans

FFCRA

Cares Act Grants

Other Funding Sources

Medicaid Rate Enhancement

Hierarchy of COVID 19 Funding

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Funds are intended to maintain staffing

Compensate employer for COVID related employee leave

COVID related expense or lost revenue

County, Etc

Payer of last resortThe Hierarchy of funds is the subject of debate

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Payroll Protection Program Loans

It is important to note that these loans fund basic expenses in order to maintain pre‐COVID spending and are not focused on incremental spending related to COVID

The settlement period is either 8 or 24 weeks after the loan is funded; therefore these funds should be addressed first

In order to attain forgiveness; at least 60% of the loan must be used to retain staff40% may be used for rent, mortgage or utility related expenses

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Payroll Protection Program Loans

PPP loans should be accounted for as a short term loan payable until such time as the loan is forgivenOnce the loan is forgiven these loans are revenue in accordance with General Accepted Accounting Principles

Note: the IRS has released guidance that for tax purposes these loans reduce expense

For Medicare cost reporting; these loans are revenue and should not be offset against cost

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FFCRA – Sick Leave

Families First Coronavirus Response Act [FFCRA] requires the employer provide paid sick leave or expanded medical leave for employees that meet specific COVID 19 related conditions Could be either active virus or suspected virus

The employer receives credits on their quarterly 941 equal to the cost of sick leave plus health insurance for the time the employee is sick.

Given these tax credits reduce the employer portion of taxes paid the credit is in effect a reduction in employer payroll tax expense.

Given this tax credit is applied immediately against employer taxes; these funds should be addressed as they are provided.

For Medicare cost reporting; these tax credits reduce paid sick leave expense by reducing payroll tax expense.

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FFCRA – FMLA

Families First Coronavirus Response Act: Employer

Paid Leave Requirements

Qualifying employers are required to provide paid sick leave

for employees if the leave meets certain COVID‐19 related

requirements.

The employer earns a dollar for dollar tax credit to

compensate for this leave. Is the sick leave and allowable cost on State and Federal costs reports?

Are we required to offset a federal tax credit against these expenses?

Are we allowed to count the additional expense for sick leave in computing

CARES Grant funding cost or PPP cost?

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CARES Act Grants

Nursing homes received up to four grants which provide funding to cover either lost revenue or incremental expense related to COVID 19.

Initially, these grants should be accounted for as deferred revenue.

Once all terms and condition are met and the provider can prove “use” of these funds; they become grant revenue

There should be no offset of these funds on the Medicare cost report. [FAQ 8/26/20]Skilled Nursing Facility, form CMS‐2540‐10, Worksheet G‐3, line 24.50;

Given CARES Act grants are the only funding source that addresses lost revenue; these grants should be used for lost revenue exclusively.

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Other Funding Sources

Other funding sources are generally local and may include remuneration in cash or supplies which may include not for profit agencies or local health departments Remember: A given unit of cost may only be applied to one funding source

The cost of the underlying service or supplies are allowable costs and these grants should not be offset against cost on the Medicare cost report.

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Medicare Part A Waivers –Sections 1135/1812(f)

For the Compliance Officer

Be aware of all waivers applicable to providers Know the effective date of each waiverKnow the end date of each waiver

Update your risk assessment to incorporate applicable waivers

Update your monitoring and auditing program to incorporate key elements of each waiver

Assure training programs are updated so that pertinent information is communicated to the correct employees

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Section 1135 & 1812(f) Waivers

Conditions of participation or other certification requirements for an individual health care provider or types of providers;

Program participation and similar requirements for an individual health care provider or types of providers; and pre‐approval requirements.

Requirements that physicians and other health professional be licensed in the State in which they provide services

Actions under EMTALA rules (per § 1867 of the Act) regarding: the transfer of an individual who has not been stabilized (if the transfer arises out of the circumstances of the emergency) ; and the direction or relocation of an individual to receive medical screening at an alternative

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Section 1135 & 1812(f) Waivers

Sanctions for violations of Stark rules (physician self‐referral under § 1877 of the Act).

Deadlines and timetables for performance of required activities (may be modified but not waived).

Limitations on the ability to make direct payments to providers for services provided to Medicare Advantage enrollees.

Sanctions and penalties for noncompliance with certain patient privacy provisions of the Health Insurance Portability and Accountability Act of 1996 (HIPAA).

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Waivers for SNFs

Waiver of three day Qualifying Hospital Stay Allows for a resident to be Medicare covered

Waiver of Benefit period Allows for greater than 100 days

ESRD in a SNF Allows for ESRD services to provided in the SNF rather than offsite

Telehealth Allows for physician visits in a SNF

Waives the coinsurance and deductible for COVID 19 related services

Requires Medicare Advantage plans to cover COVID 19 related lab testing

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3 Day Stay Waiver

Emergency waivers of the QHS under 1812(f) of the Social Security ActApplies to beneficiaries affected by the emergency

Preserves entitlement “under normal circumstances”

CMS waives the QHS in order to provide “temporary emergency coverage”Applies to:Beneficiaries who are dislocatedOr, otherwise affected my Covid‐19

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3 Day Stay Waiver – How it works

All beneficiaries qualify regardless of whether they have SNF benefit days remaining

The beneficiaries status of “being affected by the emergency” exists nationwideNo need to verify individual cases

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3 Day Stay – When it applies

Beneficiary may be discharged from the hospital early without three consecutive days

Beneficiary may be admitted to the SNF directly from home

Beneficiary may be admitted directly from hospital ER

A current patient may be “skilled in place” without the need for a hospital stay

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Example 3 Day Stay Patient

• On July 7, 2020; Jane Doe, a long term Medicaid resident developed signs and symptoms of COVID 19. These symptoms include a fever of 101.0, a dry cough, O2 sats of 87 and red eyes. A COVID 19 test sample has been collected but the provider does not have test results.

• Ms. Doe was moved into a quarantine area of the SNF in order to maintain infection control.

• Ms. Doe requires the skills of a registered nurse to monitor for signs and symptoms of COVID 19 as well as her changing health needs.

• Ms. Doe meets Medicare skilled coverage criteria on July 7, 2020. Her physician signed an initial Medicare certification of skilled care on July 8, 2020 to be effective July 7, 2020

• Tests results were received on July 10 showing Ms. Doe is positive for COVID 19. A 5 day MDS is completed on July 11 and with a primary diagnosis of U07.1 she falls into a Medical Management category.

• The Nurse wrote an admission note stating that Ms. Doe was placed on Medicare skilled care due to sign and symptoms of COVID 19 and the Physician for the protection of the residents both at the facility and at the hospital requested that she remain at the SNF.

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Benefit Period – 100 Days +

Authorizes renewed SNF coverage without first have to start a new benefit period

Only applies for those beneficiaries who have been delayed or prevented by the emergency itself from commencing or completing the process of ending their benefit period thus renewing their SNF benefits

To qualify for the benefit period waiver, it must be demonstrated that a beneficiary’s continued receipt of skilled care in the SNF is in some way related to the PHE. One example would be when a beneficiary who had been receiving daily skilled therapy, then develops COVID‐19 and requires a respirator and a feeding tube.

Note that beneficiaries who do not themselves have a COVID‐19 diagnosis may nevertheless be affected by the PHE. For example, when disruptions from the PHE cause delays in obtaining treatment for another condition.

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Benefit Period – Always Skilled

The benefit period waiver would not apply to those beneficiaries who are receiving ongoing skilled care in the SNF that is unrelated to the emergencyA scenario that would have the effect of prolonging the current benefit period and precluding a benefit period renewal even under normal circumstances.

For example, if the patient has a continued skilled care need (such as a feeding tube) that is unrelated to the COVID‐19 emergency

The beneficiary cannot renew his or her SNF benefits under the section 1812(f) waiver as it is this continued skilled care in the SNF rather than the emergency that is preventing the beneficiary from beginning the 60 day “wellness period.”

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Benefit Period – Golden Rule

A SNF resident’s ongoing skilled care is considered to be emergency‐related unless it is altogether unaffected by the COVID‐19 emergency itself That is; The beneficiary is receiving the very same course of treatment as if the emergency had never occurred

The Provider should compare the course of treatment that the beneficiary has actually received to what would have been furnished absent the emergency.

Unless the two are exactly the same, the provider would determine that the treatment has been affected by – and, therefore, is related to–the emergency.

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Medicare Coverage

The patient must meet the requirements of skilled care The patient requires skilled nursing services or skilled rehabilitation services, i.e., services that must be performed by or under the supervision of professional or technical personnel Services are ordered by a physician Services are rendered for a condition for which the patient received inpatient hospital services or for a condition that arose while receiving care in a SNF for a condition for which he received inpatient hospital services; The patient requires these skilled services on a daily basis As a practical matter, considering economy and efficiency, the daily skilled services can be provided only on an inpatient basis in a SNF.The services delivered are reasonable and necessary for the treatment of a patient’s illness or injury

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Medicare Documentation

Physician must certify and re‐certify the need for skilled care

Claims for skilled care coverage need to include sufficient documentation to enable a reviewer to determine whether:Skilled involvement is required in order for the services in question to be furnished safely and effectively; and

The services themselves are, in fact, reasonable and necessary for the treatment of a patient’s illness or injury, i.e., are consistent with the nature and severity of the individual’s illness or injury, the individual’s particular medical needs, and accepted standards of medical practice. The documentation must also show that the services are appropriate in terms of duration and quantity, and that the services promote the documented therapeutic goals.

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3 Day Stay Waiver ‐ Billing Instructions

Complete a 5 day MDSInterrupted stay policy does not applyFollow all PDPM assessment rules

Include the HIPPS code from 5‐day MDS

Use the DR condition code

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Benefit Period ‐ Billing Instructions

At the end of the first 100 days; submit a final discharge claim with patient status = 01

Readmit the beneficiary to start the benefit period waiver

Complete a 5‐day PPS Assessment [day 105]

Use the HIPPS code from this new 5‐day assessment

The variable per diem schedule begins from day 1

Include Condition Code = DR

Include Condition Code = 57 [readmission]

In the remarks section include “COVID100”

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Compliance Risks

You will get audited!

Physician certifications

Daily documentation of skilled care

Nexus to COVID 19. Why was a QHS stay not necessaryHow was additional 100 spell of illness related to COVID 19

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Paycheck Protection Program (PPP) –Department of Treasury/Small Business Administration

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Paycheck Protection Program (PPP)

Original Legislation ‐ Paycheck Protection Program was enacted as part of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) (signed March 27, 2020)

Amended Legislation ‐ Paycheck Protection Program Flexibility Act of 2020 (signed June 5, 2020)

Further Amendment ‐ S.4116 (signed July 4, 2020)Extended application deadline an additional five weeks to Aug. 8.

Does not allow a second application, however

By the end of June, the Small Business Administration, which administers the PPP, had approved 4.9 million loans totaling over $520 billion, leaving nearly $130 billion in funds untapped

FAQs (SBA and Treasury)https://www.sba.gov/document/support‐‐faq‐lenders‐borrowers?fbclid=IwAR0grGa9wseRQD‐4VEWr7mqcSga2ITyk52EJV‐FPwOA3cy4aiCU4d8x7ud8

At least 22 Interim Final Rules as of July 4, 2020https://home.treasury.gov/policy‐issues/cares/assistance‐for‐small‐businesses

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Paycheck Protection Program (PPP)

Application/Receipt/Return – Safe Harbor

Qualification

Justification

Return Deadline of May 18 – Safe Harbor

Has come and passed

Forgiveness

Have up to 24 weeks to use the funds, up to Dec. 31.

If not forgiven, then a loan at 1% interest

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PPP Forgiveness

What Is Forgivable?

In Whose Opinion?

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PPP Forgiveness

What Is Forgivable?

Payroll Costs:•Much (but not all) Of (but not all) Your Payroll Cost Is Forgivable

•Examples of Questionable or NOT Forgivable Payroll costs:

• Payroll that exceeds $100K per year (for any employee)• Employer Portion of Payroll Tax• Insurance Paid By the Employee (deductions from checks)

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PPP Forgiveness

What Is Forgivable?

Utilities:• “Major” Utility Expenses, e.g., Electricity, Gas, Water/Sewer are forgivable

•Examples of Questionable or NOT Forgivable Costs that some may consider “Utility Costs”:

• Phone / Internet Access• Trash Pickup / Medical Waste Pickup

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PPP Forgiveness

What Is Forgivable?

Rent:•Rent Paid To Unrelated Landlords Is Pretty Clearly Forgivable

•Examples of Questionable or NOT Forgivable Rent Costs:

• Amounts (or part of the amount) Paid to Related Landlords

• Rent That May Include “extras”, e.g., rent deposit amounts, property tax payments, insurance payments, etc.

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CARES Act/Provider Relief Fund –Health & Human Services, CMS

CARES Act/Provider Relief Fund

Statutory Provisions

Congress passes and President signs Public Laws 116‐136

and 116‐139 (2020)

FAQs

CMS issues and updates FAQs ‐ legislation by FAQ• https://www.hhs.gov/sites/default/files/provider‐relief‐fund‐general‐

distribution‐faqs.pdf

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Congressional Action in March on COVID‐19

Signed into Law on March 6: The Coronavirus Preparedness

and Response Supplemental Appropriations Act (H.R. 6074) Provided $8.3 billion in emergency funding

Included telehealth waivers

Signed into Law on March 18: The Family First Coronavirus

Response Act (H.R. 6201)• No cost coverage of COVID‐19 testing

• Paid Sick Leave, FMLA, etc.

Signed into Law on March 27: The Coronavirus Aid, Relief,

and Economic Security Act (CARES Act) (H.R. 748)

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$100B for COVID‐19 Expenses/Losses

$100 Billion appropriated to the Public Health and

Social Services Emergency Fund (PHSSEF) for providers

Purposes:• COVID‐19 health expenses

• Lost revenue attributable to COVID‐19

Eligible providers?• Public entities

• Medicare/Medicaid enrolled suppliers/providers

• For‐profit and not‐for‐profit entities specified by HHS that provide COVID‐19

diagnosis, testing, or care

Will be Administered by HHS• May be pre‐payment, prospective payment, or retrospective payment

• Consider most efficient payment systems practicable

• Application includes statement justifying need and TIN

• Can’t reimburse expenses or losses that other sources are obligated to reimburse


Key CARES Act Provisions

• Providing $100 billion in funding to providers;

• Temporarily lifting the Medicare sequester through December 31, 2020;

• Creating a 20% Medicare add‐on payment for inpatient hospital COVID‐19

patients;

• Allowing flexibility for acute care hospitals to transfer patients out of their

facilities and into alternative care settings in order to prioritize resources;

• Aligning the 42 CFR Part 2 regulations on confidentiality and sharing of substance

use disorder treatment records with HIPAA;

• Supporting provisions for the health care workforce; and

• Further expanding the use of telehealth.

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Tranches for SNFs General Distributions – (Phase 1 and Phase 2)

• Two general distributions (Phase 1) and “clean‐up” tranche for CHOWs and ALFs (Phase 2)

Targeted Distributions• Two targeted distributions

Allocation for SNFs ‐ $4.9 billion

Nursing Home Infection Control Distribution ‐ $2.5 billion

Tranche for NFs, ICF‐IIED and Other Medicaid‐Only Providers Medicaid/CHIP ‐ targeted distribution

Can receive along with SNF targeted but not general distributions

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Phase 2 TranchesMust be a Medicare Part A provider that experienced a change in ownership and billed Medicare fee‐for‐service in 2019 and 2020 that prevented the otherwise eligible provider from receiving a Phase 1 – General Distribution payment

Must be a state‐licensed/certified assisted living facility

Framework for acceptance/expenditure/return of funds

Acceptance/Rejection of Awards

Is this a loan or a grant that I will need to pay back?

• Retention and use of these funds are subject to certain terms and conditions. If these terms and conditions are met, payments do not need to be repaid at a later date. These Terms and Conditions can be found here.

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Attestations – Terms & ConditionsSpecific Terms & Conditions ‐ Core Provisions

1. The Recipient certifies that it:provides or provided after January 31, 2020 diagnoses, testing, or care for individuals with possible or actual cases of COVID‐19 (Phase 1 General Distribution also required Medicare billings in 2019);

is not currently terminated from participation in Medicare or precluded from receiving payment through Medicare Advantage or Part D;

is not currently excluded from participation in Medicare, Medicaid, and other Federal health care programs; and

does not currently have Medicare billing privileges revoked.

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Attestations – Terms & Conditions

Specific Terms & Conditions ‐ Core Provisions (cont.)

2. The Recipient certifies that the Payment will only be used to prevent, prepare for, and respond to coronavirus, and that the Payment shall reimburse the Recipient only for health care related expenses or lost revenues that are attributable to coronavirus.

3. The Recipient certifies that it will not use the Payment to reimburse expenses or losses that have been reimbursed from other sources or that other sources are obligated to reimburse.

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Attestations – Terms & Conditions

Specific Terms & Conditions ‐ Core Provisions (cont.)

4. The Recipient shall submit reports as the Secretary

determines are needed to ensure compliance with conditions

that are imposed on this Payment, and such reports shall be in

such form, with such content, as specified by the Secretary in

future program instructions directed to all Recipients.

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5. Nursing Home Infection Control Distribution requires:

Costs associated with administering COVID‐19 testing, which means an in vitro diagnostic test defined in section 809.3 of title 21, Code of Federal Regulations (or successor regulations) for the detection of SARS– CoV–2 or the diagnosis of the virus that causes COVID–19, and the administration of such a test, that:

Is approved, cleared, or authorized under section 510(k), 513, 515, or 564 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 360(k), 360c, 360e, 360bbb–3);

The developer has requested, or intends to request, emergency use authorization under section 564 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 360bbb–3), unless and until the emergency use authorization request under such section 564 has been denied or the developer of such test does not submit a request under such section within a reasonable timeframe;

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Is developed in and authorized by a State that has notified the Secretary of Health and Human Services of its intention to review tests intended to diagnose COVID‐19; Other test that the Secretary determines appropriate in guidance

Reporting COVID‐19 test results to local, state, or federal governments Hiring staff, whether employees or independent contractors, to provide patient care or administrative support. Expenses incurred to improve infection control, including activities such as implementing infection control “mentorship” programs with subject matter experts or changes made to physical facilities Providing additional services to residents, such as technology that permits residents to connect with their families if the families are not able to visit in person

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Attestations – Terms & ConditionsUnique General Term & Conditions

• Section 202. Executive Pay. None of the funds appropriated in this title shall be used to pay the salary of an individual, through a grant or other extramural mechanism, at a rate in excess of Executive Level II (currently $197,300.)

• Section 520. Pornography.• (a) None of the funds made available in this Act may be used to maintain or establish a computer network unless such network blocks the viewing, downloading, and exchanging of pornography.

• (b) Nothing in subsection (a) shall limit the use of funds necessary for any Federal, State, tribal, or local law enforcement agency or any other entity carrying out criminal investigations, prosecution, or adjudication activities.

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Revenue losses “attributable” to COVID‐19 and Healthcare‐related expenditures

The Terms and Conditions state that Provider Relief Fund payments will only be used to prevent, prepare for, and respond to coronavirus and shall reimburse the Recipient only for healthcare‐related expenses or lost revenues that are attributable to coronavirus. What expenses or lost revenues are considered eligible for reimbursement? (Modified 6/19/2020)

• 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;

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Revenue losses “attributable” to COVID‐19 and Healthcare‐related expenditures (cont.)

• Providers may have incurred eligible health care related expenses

attributable to coronavirus prior to the date on which they received

their payment.

• Providers can use their Provider Relief Fund payment for such

expenses incurred on any date, so long as those expenses were

attributable to coronavirus and were used to prevent, prepare for, and

respond to coronavirus. HHS expects that it would be highly unusual

for providers to have incurred eligible expenses prior to January 1,

2020.

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• The term “lost revenues that are attributable to coronavirus” means any revenue that you as a healthcare provider lost due to coronavirus. This may include revenue losses associated with fewer outpatient visits, canceled elective procedures or services, or increased uncompensated care.

• 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.

Impact of sequester and business interruption insurance?

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Revenue losses “attributable” to COVID‐19 and Healthcare‐related

expenditures (cont.)

• 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

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• You may use any reasonable method of estimating the revenue during March and April 2020 compared to the same period had COVID‐19 not appeared.

• For example, if you have a budget prepared without taking into account the impact of COVID‐19, the estimated lost revenue could be the difference between your budgeted revenue and actual revenue. It would also be reasonable to compare the revenues to the same period last year.

• All providers receiving Provider Relief Fund payments will be required to comply with the reporting requirements described in the Terms and Conditions and specified in future directions issued by the Secretary.

• HHS will provide guidance in the future about the type of documentation we expect recipients to submit. Additional guidance will be posted at https://www.hhs.gov/provider‐relief/index.html

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Not covered by other sources of reimbursement

Cross‐subsidization principles

Medicaid as payor of last resort?

HHS may have an entirely different view!

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ReportingThe Terms and Conditions for all Provider Relief Fund payments require recipients who receive at least $150,000 in the aggregate from any statute primarily making appropriations for the coronavirus response to submit quarterly reports to HHS and the Pandemic Response Accountability Committee. This requirement is from section 15011 of the CARES Act. What do providers need to do in order to be in compliance with this provision in the Terms and Conditions? (Added 6/13/2020)

• Recipients of Provider Relief Fund payments do not need to submit a separate quarterly report to HHS or the Pandemic Response Accountability Committee. HHS will develop a report containing all information necessary for recipients of Provider Relief Fund payments to comply with this provision.

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Special impacts of CHOWs and transfer of ownership

If, as a result of the sale of a practice/hospital, the TIN that received a Provider Relief Fund payment is no longer providing healthcare services as of January 31, 2020, is it required to return the payment? (Modified 6/12/2020)

• Yes. If, as a result of the sale of a practice/hospital, the TIN that received a Provider Relief Fund payment did not provide diagnoses, testing, or care for individuals with possible or actual cases of COVID‐19 on or after January 31, 2020, the provider must reject the payment. The Provider Relief Fund Payment Attestation Portal will guide you through the attestation process to reject the payment.

Phase 2 portal is designed to attempt to deal with the problem of delayed CHOWs

Still lots of unanswered and unresolved questions.

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Special impacts of CHOWs and transfer of ownershipIf a seller receives Provider Relief Fund money prior to the completion of a sale, can the seller transfer some or all of the Provider Relief Fund money to the buyer? (Modified 6/22/2020)

• If the transaction is a purchase of the recipient entity (e.g., a purchase of its stock or membership interests), then the Provider Relief Fund recipient may continue to use the funds, regardless of its new owner. But if the transaction is an asset purchase (whether for some or all of the Provider Relief Fund recipient’s assets), then the original recipient must use the funds for its eligible expenses and lost revenues and return any unused funds to HHS.

• In these circumstances, the Provider Relief Fund money does not transfer to the buyer, however, buyers in these circumstances will be eligible to apply for future Provider Relief Fund payments. If a bankrupt recipient is liquidated, it must similarly use the funds for its eligible expenses and lost revenues and return any unused funds to HHS.

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Parent – Subsidiary Issues/ Important Distinctions Between General & Targeted Distributions –

Can a parent organization transfer General Distribution Provider Relief Fund payments to its subsidiaries? (Modified 7/23/2020)

• Yes, a parent organization can accept and allocate General Distribution funds at its discretion to its subsidiaries. The Terms and Conditions place restrictions on how the funds can be used. In particular, the parent organization will be required to substantiate that these funds were used for increased health care‐related expenses or lost revenue attributable to COVID‐19, and that those expenses or losses were not reimbursed from other sources and other sources were not obligated to reimburse them.

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In the case of a parent organization with multiple billing TINs that may have each received a General Distribution payment, may the parent organization attest to the Terms and Conditions and keep the payments? (Modified 7/23/2020)

• Yes, the parent organization with subsidiary billing TINs that received General Distribution payments may attest and keep the payments as long as providers associated with the parent organization were providing diagnoses, testing, or care for individuals with possible or actual cases of COVID‐19 on or after January 31, 2020 and can otherwise attest to the Terms and Conditions. The parent organization can allocate funds at its discretion to its subsidiaries. If the parent organization would like to control and allocate Provider Relief Fund payments to its subsidiaries, the parent organization must attest to accepting its subsidiaries’ payments and agreeing to the Terms and Conditions.

• Can a parent organization allocate Provider Relief Fund General Distribution to subsidiaries that do not report income under their parent’s employee identification number (EIN)? (Added 7/22/2020) Yes. The Terms and Conditions place restrictions on how the funds can be used. In particular, the parent organization will be required to substantiate that these funds were used for increased health care‐related expenses or lost revenue attributable to COVID‐19, and that those expenses or losses were not reimbursed from other sources and other sources were not obligated to reimburse them.

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Must a parent organization that received a Provider Relief Fund Targeted Distribution on behalf of a subsidiary in which it is has a direct ownership relationship remit the payment to the subsidiary? (Modified 9/3/2020)

• Yes. The parent entity must transfer a Provider Relief Fund Targeted Distribution payment to any or all subsidiaries that qualified for a Targeted Distribution payment. Control and use of the funds must be delegated to the entity that was eligible for the Targeted Distribution payment if a parent entity received the Targeted Distribution payment on the behalf of an eligible subsidiary, unless the funds were received as part of the Skilled Nursing Facility Targeted Distribution or Nursing Home Infection Control Distribution, in which case parent entities may distribute funds among those subsidiaries that were eligible for payment at its discretion. The purpose of Targeted Distribution payments is to support the specific financial needs of the eligible healthcare provider.

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If a parent organization received a Provider Relief Fund Targeted Distribution on behalf of a subsidiary, which organization should attest to the Terms and Conditions for the payment? (Added 8/27/2020)

• The parent entity should attest to the Terms and Conditions for the Targeted Distribution payment if it is the entity that received the payment. It may attest on behalf of any or all subsidiaries that qualified for a Targeted Distribution (i.e., Skilled Nursing Facility, Safety Net Hospital, Rural, Tribal, High Impact Area) payment. The parent entity must transfer a Provider Relief Fund Targeted Distribution payment to any or all subsidiaries that qualified for a Targeted Distribution (i.e., Skilled Nursing Facility, Safety Net Hospital, Rural, Tribal, High Impact Area) payment. Control and use of the funds must be delegated to the entity that was eligible for the Targeted Distribution payment if a parent entity received the Targeted Distribution payment on the behalf of an eligible subsidiary.

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Documentations strategies

Audits by HHS

Gregg Shapiro, former Chief of the Affirmative Civil Recovery in Boston,

beginning a one‐year detail serving as Special Inspector General for

Pandemic Recovery

https://crsreports.congress.gov/product/pdf/IN/IN11328

Return of funds

Recoupment

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Temporary Sequester Relief

Medicare Sequester:• 2% reduction to FFS Medicare Payments

• In place since April 1, 2013

CARES Act:• Exempts Medicare from sequestration from May 1, 2020 to December 31, 2020

• Extends sequester from 2029 to 2030

Consider impact on Medicare Advantage payments

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Washington Medicaid Support for COVID‐19

Washington Medicaid COVID 19

• Medicaid $29 Rate Add‐on Effective February 1 through June 30th

• Paid using Enhanced FMAP funding

• Medicaid $13 Rate Add‐on for July 2020• Paid using CARES Act Grants

• Medicaid $5 Rate Add‐on for August and September 2020• Paid using CARES Act Grants

• Funding for Lab Testing for COVID 19• State is paying for state mandated testing

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Cost Report Treatment / Settlement

• Department has not made a decision regarding cost reporting of COVID 19 related revenue or expense

• There is no tracking or payback of the Medicaid COVID specific add‐on

• The Department is concerned about the following:• Making the process not burdensome

• Fear of inflated rates in future years based on 2020 costs

• Not knowing which cost increases are temporary versus permanent

• Consider offsetting a portion of COVID 19 CARES Act revenue

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Accounting for COVID‐19 Related Expense

Compliance Issues Related to Tracking and Reporting Expenses

Assure COVID expenses are used to prove only one funding source

Assure costs are included in the correct line item on Medicare and Medicaid cost reports

Assure lost revenue is reasonable measured

Assure documentation is sufficient to show incremental costs are related to COVID 19

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Proving Lost Revenue

Revenue is considered reduced when it was less than expected and the proximate cause is COVID 19.

The measurement period begins March 1, 2020.

We do not have a final “bookend” to when the measure period stops. COVID 19 related costs and lost revenue could be years and not months

There are several revenue based measurements options outlined in the FAQs

Compare current revenue to budget

Compare current revenue to pre: COVID 19 revenue

Compare current revenue to same period in prior year

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State Level Medicaid Funding

Many states redirected enhanced FMAP into Medicaid rate add‐ons in order to provide additional resources for SNFs.

Some states do not require “proof of use” for this additional funding

Other States, not surprisingly California, put in place robust auditing of SNF COVID 19 related funding and use of funds

Enhanced Medicaid rates should be booked as Medicaid revenue

There is no cost offset on the Medicare cost report

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Cost Reporting – MedicarePRM 15‐1, Chapter 6

Unrestricted grants, gifts, and income from endowments should not be deducted from operating costs in computing reimbursable cost

Restricted grants, gifts, and income from endowments designated for cost reporting periods beginning October 1, 1983, should not be deducted from the particular operating costs or group of costs.

CMS has issued guidance that CARES Act receipts are revenue and not offset against expense.

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Fundamentals of Accounting

Accurate tracking COVID 19 specific costs is important:

Why or how is the cost related to COVID 19?

The is cost incremental; the provider would not have purchased the supply or hired the labor absent COVID 19

Is the cost related to higher incremental cost for the same service or supply, hiring wages or increased unit cost of supplies

Isolating COVID 19 related into their own accounts is less important

A dietary cost is still a dietary cost for cost reporting

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Allocating COVID 19 Expense

A cost can only go into one bucket

Once that cost is counted to “prove” a funding source; it cannot be counted twice

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General Ledger Account Tracking

Detailed tracking of COVID 19 costs by setting up additional G/L accounts could be important

In setting up accounts; Accounts should be sufficiently separate to maintain proper allocation on Medicare and State cost reports

Sample COVID 19 G/L accounts:

Admin labor 4‐15500

Admin non labor related costs 4‐25500

Laundry labor related cost 6‐15500

Laundry non labor relates costs 6‐25500

Housekeeping labor related costs 7‐15500

Hskp non labor related costs 7‐25500

RN labor related costs 30‐15501

Infection control labor related costs 9‐15501

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Payroll Related Spending

Tracking staffing related to COVID 19 is the most difficult area to address

Identify specific positions that are due entirely to COVID 19, examples:Security position to monitor main entranceAdditional housekeeperInfection control nurse

Identify incremental time related to COVID 19, for instance:Ideally, this should be supported by a schedule of additional shifts as opposed to happenstanceRecommend hour per patient day approachKey element here is “why staffing increased” and,How is that increase related to COVID 19

The provider needs to provide documentation beyond the mere dollars

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COVID 19 Costs – Ancillary Costs

Lab supplies and cost of testing

Cost of additional medications not covered by other payer sources

Additional Oxygen treatment costs

PPE related nursing supplies

Labor related to gathering samples

Additional time for staff to don and doff masks

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COVID 19 Costs – Support Services

Staff meals

Equipment and supplies related to screening

Dietary supplies and equipment related to non‐communal dining

Additional equipment and supplies for infection control

Additional medical waste

Additional laundry supplies for laundry extra usage

Activities supplies related to social isolation

Additional time for staff to don and doff masks

Additional at entrance to screen visitors and staff

Additional staff time related to non‐communal dining

Additional staff time related to infection control

Increased laundry labor related to laundry linens

Additional activities and social services time to assist in communicating with families

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COVID 19 Costs – Direct Care

Additional staff time related to cohorting patients

Additional infection control nurse

Hazard pay

Day care related expense if day care is shut down

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Did We Spend The Relief Money?

There are many details that need to be considered, but, at the highest level, we need to determine whether or not the relief funds were spent and what those funds were spent for.

Funds Received Expenses Incurred UN‐Spent Funds

PPP $ 1,000,000 COVID Supplies $ 500,000 "

FFCRA $ 1,000,000 COVID Payroll $ 750,000 "

Cares Act $ 1,000,000 COVID Lab Tests $ 100,000 "

Other Funding $ 1,000,000 COVID Cleaning $ 125,000 "

Medicaid $ 1,000,000 COVID Sick Leave $ 84,000 "

" $ XX,XXX "

" $ YY,YYYY "

" $ZZ,ZZZZ "

COVID COVID COVID "

Total Funds Received $ 5,000,000 $ 5,000,000 $0.00

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Two Step Process

• First show incremental expense

• Second, demonstrate the incremental expense is related to COVID 19• This is much more difficult

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Questions?Please email questions to:

Bill UlrichEmail: Bill.Ulrich@billing‐services.com

Phone: 509.448.2067 X 202

Mark E. ReaganEmail: mreagan@health‐law.com

Phone: 415.875.8501

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THANK YOU.

Documents

Government Support of SNFs During COVID‐19, Generally · An Overview of COVID‐19 Billing Waivers ... cough, O2 sats of 87 and red eyes. A COVID 19 test sample has been collected