Yesterday, the Department of Health and Human Services (“HHS”) announced that the CARES Act has procured $100 billion in funding for health care providers. Some of the money will be allocated to providers treating uninsured patients for COVID-19 at Medicare rates. The rest of the funding is divided into four categories: (1) general allocation; (2) targeted allocation; (3) rural allocation; and (4) tribal allocation.

At the media briefing to announce the procurement of funds, HHS Secretary Alex Azar promised that the allocation of funds will be closely monitored and that there would be “significant anti-fraud and auditing work by HHS.” He also stated that the “terms and conditions of receiving these allocations include measures to help prevent fraud and misuse of the funds.” Key requirements include certifications that payments will only be used for medical expenses or lost income attributable to COVID-19, which triggered the widespread cancellation of non-emergency surgeries that are lucrative sources of hospital revenue. Recipients must also limit expenses for out-of-network coronavirus patients to in-network rates.

The terms and conditions tied to receipt of the funds can be found here. These terms and conditions are not final.

Pandemic Response Accountability Committee

The CARES Act also creates the Pandemic Response Accountability Committee that will be tasked with performing oversight of CARES Act funds. The members of the Committee include:

  • the Inspectors General of the Departments of Defense, Education, Health and Human Services, Homeland Security, Justice, Labor, and the Treasury;
  • the Inspector General of the Small Business Administration;
  • the Treasury Inspector General for Tax Administration; and
  • any other Inspector General, designated by the chairperson from any agency that expends or obligates covered funds or is involved in the coronavirus response.

Duties of Accountability Committee

The Committee’s specific duties include:

  • auditing or reviewing covered funds . . . to determine whether wasteful spending, poor contract or grant management, or other abuses are occurring;
  • making referrals for investigation to the Inspector General for the agency that disbursed the covered funds, including random audits to identify fraud; and
  • reviewing whether competition requirements applicable to contracts and grants using covered funds have been satisfied.

This makes it clear that doctors and hospitals receiving funds will be under the government’s microscope.

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