Contact Us
Back to the blogMay 4, 2020

CARES Act Provider Relief Fund

CARES Act Provider Relief Fund

The COVID-19 pandemic forever changed all of our lives, and the Coronavirus Aid, Relief, and Economic Security (CARES) Act provides unprecedented economic relief for all Americans. It included $500 billion in direct payments to Americans, $208 billion in significant industry loans, and $300 billion in Small Business Administration (SBA) loans. Of course, the real question begging to be answered is how healthcare organizations can benefit from this. The Provider Relief Fund in the CARES Act was created to assist healthcare organizations reduce the impact of the COVID-19 pandemic on their revenue and safety.

In fact, hospitals and other healthcare hot spots have money provisioned directly for them. The CARES Act provided a total of $100 billion for healthcare providers, and half of that has already been earmarked by the Department of Health and Human Services (HHS). Of the remaining $50 billion, HHS Secretary Alex Azar neglected to give direct numbers. Still, he estimates $10 billion each will go to rural hospitals and New York City, with another $400 million heading to the Indian Health Service to help deal with the effects.

Here’s what you need to know about the Provider Relief Fund and its allocations, according to the HHS.

What is the Provider Relief Fund?

The bipartisan CARES Act provides $100 billion Provider Relief Fund in economic relief money for hospitals and healthcare providers on the frontline of the COVID-19 pandemic. Its purpose is to support healthcare-related expenses and promote practices that lost revenue due to the effects of the virus. The bill also helps uninsured Americans gain access to necessary testing and treatment, should they be diagnosed with the COVID-19 coronavirus. The funds were divided into two categories:

1. General Allocation ($50 Billion)

General allocation funds in the Provider Relief Fund were split into two payments, with $30 billion distributed the week of April 10, and the other $20 billion going out April 24. These funds were calculated using data on hand, along with a simplified formula to ensure the money moved quickly. It went toward facilities that accept Medicare, although some places, like children’s hospitals, also received funding, despite low Medicare patient revenue. Otherwise, the government went off 2018 net patient revenue from CMS cost reports submitted to the HHS.

Providers who don’t have adequate cost report data on file will need to submit revenue reports online to be considered for additional funds. Otherwise, payments will go out weekly every Friday, starting April 24, 2020. There are plenty of terms and conditions to prevent abuse, so be sure to perform due diligence before applying.

2. Targeted Allocation ($50 Billion)

As explained above, some money in the Provider Relief Fund is targeted directly at specific institutions. This money is divided as follows:

  • $10 Billion – High-impact COVID-19 areas, such as New York City

  • $10 Billion – Rural healthcare providers

  • $400 million – Indian Health Services, to assist with issues like the Navajo Nation’s outbreak

  • Unknown – Allocation for uninsured treatments

  • Unknown – Additional allocations

These targeted distributions will be made to those who apply and have a stated need related to the coronavirus epidemic. It aims to keep bills as low as possible so every American can afford treatment and care for a possible COVID-19 infection.

So, how and why were healthcare providers impacted by this global pandemic?

Provider Relief Fund Impact

Even though we’re facing a global pandemic, healthcare providers are surprisingly among the hardest hit industries. As a matter of fact, reports from Becker’s Hospital Review show 201 hospitals are furloughing employees during the COVID-19 crisis. This is because nonelective procedures have been suspended by many institutions, while patients themselves are avoiding clinics as possible hot zones.

These two factors alone are leading to millions of dollars of lost revenue for offices and hospitals, and the effects are being transferred to healthcare workers. At a time when we need physicians and nurses the most, a staggering 21% of doctors are facing pay cuts and/or furloughs as of the end of April 2020. This is causing some to consider career changes. It’s not just physicians and nurses either – many in both the ambulatory and hospital sector experienced some of the worst unemployment numbers to come from this pandemic.

Healthcare providers that are staying in business are doing so in a much different way. The push to telehealth and telemedicine came faster than anyone anticipated. Virtual doctor visits are quickly becoming the new norm, as patients of all generations seek medical advice from their trusted healthcare professionals while stuck at home. This means there is an opportunity to be had among all this chaos.

The Shift to Telehealth 

The usage of telehealth services by hospitals was already on the rise prior to 2020. From 2010 through 2017, usage more than doubled from 35% to 76%, according to the American Heart Association. However, the COVID-19 pandemic pushed the American Medical Association (AMA) and Centers for Medicare & Medicaid Services (CMS) to expand Medicare coverage of telehealth services immediately.

This important measure was again enabled to help ensure every American could access the same level of healthcare services. It has never been more apparent the dividing line between the haves and the have nots, and physicians and hospitals feel a duty to help patients, regardless of their financial situation.

Both video calls and audio-only telephone calls can qualify for healthcare visits, although a doctor is obviously limited in what he or she can diagnose using these methods. Generally, exact data is needed, and it’s only a matter of time before home healthcare devices, wearables, smart scales, and other data can be used to assist in effectively diagnose a patient. If a physician can’t access your vitals, the diagnosis can suffer, and the security concerns are rampant.

The TempDev Advantage

If you are looking for advice on how to take advantage of the Provider Relief Fund and the CARES act, the consultants at TempDev can advise. We have also assisted many clients in launching their NextGen integrated telehealth initiatives to make virtual visits easier for both providers and patients. Contact us today to learn how to utilized NextGen EHR and EPM software to transform your business to survive COVID-19 pandemic.


Agree with our point of view? Become our client!

Please submit your business information and a TempDev representative will follow up with you within 24 hours.

Hello! I’m the assistant Twinkie.

If you want to know more about TempDev please fill in your contact information below.
We’ll make sure to reach back as quickly as possible.
Hello! I’m the assistant Twinkie. How can I help?