Shortly after the COVID-19 Public Health Emergency (PHE) began, Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which established the Provider Relief Fund (PRF). The goal of the PRF program was to provide financial support to healthcare providers across the nation in response to the unprecedented challenges presented by the PHE. Despite this noble goal, the federal agencies responsible for carrying out the PRF program have focused their efforts recently on clawing back PRF payments made to providers who the agencies assert did not strictly comply with the Program’s reporting requirements, among others. These PRF repayment demands seek to collect money distributed to providers that was intended to promote patient safety and preserve access to healthcare services. In many instances, providers relied on these funds to simply keep the lights on and stay in business. Now, the government’s demands for return of these monies again threatens the stability of many providers who received PRF funds, and providers are consistently left with little to no information as to why or how these repayment demands are being made in the first place.
Originally tasked with administering the $178 billion authorized under the PRF program, the Health Resources & Services Administration (HRSA), a subagency of the Department of Health and Human Services (HHS) distributed hundreds of thousands of PRF payments to providers of all types over the last several years. Notably, not all providers that received PRF funds needed to request those funds in order to receive payment, or affirmatively agreed to be bound by a set of associated terms and conditions. Recipients of the first batch of disbursements in Period 1 typically received the funds as an automatic deposit, with no notice or solicitation, and with no specific request for the funds required. If Period 1 recipients retained the PRF funds for 90 days or longer, then those providers were deemed to have accepted the PRF program’s terms and conditions, even if providers never read the terms or signed anything and despite the fact that HRSA would not publish the full details of the terms and conditions until months later. Providers who received PRF disbursements in Period 2 or later generally submitted a specific application to receive the funds, along with an attestation agreeing to comply with the terms and conditions.
Regardless of the Period in which a provider may have received funds, one of the most critical requirements attached to the receipt of PRF disbursements was the requirement to submit a report to HRSA on the use of the funds. As the terms and conditions would come to explain, failure to timely submit the necessary reporting would be considered grounds for recoupment of the funds. If a provider did not submit the report on time, HRSA should have notified the provider of its perceived non-compliance with the PRF terms and conditions, and allowed 60 days for the provider to submit the report or otherwise come back into compliance to justify retention of the funds.
However, we have seen numerous instances where HRSA has mailed the notice to the wrong address or a completely unrelated address, sent the notice to the wrong email address or an unmonitored inbox, or failed to provide notice altogether. If a provider did not remedy its alleged non-compliance within 60 days of the notice, even where the notice was mishandled or never sent or received, then HRSA considers the PRF payment to be a debt owed to HHS and refers the amount of PRF funds received by the provider for a given Period to the United States Treasury for collection action. Once the debt has been placed with the Treasury for collection, interest, penalties, and administrative fees begin to accrue at exorbitant rates, and it becomes extremely difficult to dispute the debt liability or challenge the underlying alleged non-compliance with the PRF terms and conditions. Indeed, even a clear demonstration that the PRF funds were appropriately spent within the authorized areas or that the HRSA notice of non-compliance was never received by the provider have not been reason enough to overcome the repayment demand.
That is, even where a provider can demonstrate that they spent the PRF funds appropriately and HRSA is at fault regarding the lack of notice, HRSA is still demanding repayment and referring these alleged debts to Treasury. Moreover, HRSA has failed to implement an effective appeal mechanism for these circumstances and generally takes the position that it cannot reconsider the debt once HRSA has referred the debt to Treasury. Treasury, on the other hand, because the debt originates from HRSA, insists that only HRSA can rule on the merits of the dispute. Thus, these providers are often left with little recourse besides entering into a repayment plan with Treasury to satisfy the debt, in addition to the disproportionate amount of interest and fees assessed.
If an individual provider or healthcare entity has received PRF payments in any Period, then such providers are strongly encouraged to review their records and communications to ensure that they have complied with the PRF terms and conditions, and in particular have submitted the necessary reporting. Providers who find themselves facing a Provider Relief Fund repayment demand should seek out experienced healthcare counsel to assist with responding to and resolving the demand.
For over 35 years, Wachler & Associates has represented healthcare providers and suppliers nationwide in a variety of health law matters, and our attorneys can assist providers and suppliers in understanding new developments in healthcare law and regulation. If you or your healthcare entity has any questions pertaining to the Provider Relief Fund or healthcare compliance, please contact an experienced healthcare attorney at 248-544-0888 or wapc@wachler.com