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The Provider Relief Fund: Welcome relief or compliance minefield?

Andrew B. Wachler (awachler@wachler.com) is Principal and Stephen J. Shaver (sshaver@wachler.com) is an Associate Attorney at Wachler & Associates PC in Royal Oak, MI.

The outbreak of COVID-19 has sent shock waves through the US economy. In the healthcare industry, hospitals and healthcare providers have seen nonessential but revenue-generating procedures postponed and distancing guidelines lead to steep declines in other services.[1] At the same time, they have seen a surge in actual and potential COVID-19 patients, as well as rapid increases in the prices of many basic medical supplies and equipment.[2] Caught between sudden expenses and a sudden drop in revenue, many hospitals and healthcare providers are struggling for operating capital[3] and some have shut down entirely.[4]

In response, Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act on March 27, 2020.[5] Among the measures contained in the CARES Act was the creation of the CARES Act Provider Relief Fund (PRF).[6] The PRF’s goal is to provide financial relief to hospitals and healthcare providers by distributing funds directly into the accounts of hospitals and healthcare providers. The distribution of these funds is administrated by the Department of Health & Human Services (HHS). Congress initially appropriated $100 billion for the PRF but, on April 24, 2020, passed the Paycheck Protection Program and Health Care Enhancement Act and appropriated an additional $75 billion for the fund.[7] HHS has divided the first $100 billion into a series of general and targeted allocations. Each allocation from the PRF comes with conditions and limitations on the use of the funds, creating a plethora of compliance challenges for providers.

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