The Coronavirus Aid, Relief, and Economic Security (CARES) Act was a landmark piece of legislation enacted to address the economic and health crises triggered by the COVID-19 pandemic. Within this extensive act, a significant provision was the establishment of the Provider Relief Fund (PRF), designed to bolster the healthcare system during unprecedented times. This fund, further augmented by the Paycheck Protection and Health Care Enhancement Act and the Consolidated Appropriations Act of 2021, ultimately allocated a combined $178 billion to hospitals and other healthcare providers across the nation.
Administered by the Department of Health and Human Services (HHS) through the Health Resources and Services Administration (HRSA), the Provider Relief Fund served a critical dual purpose. Firstly, it aimed to financially support healthcare providers by reimbursing them for healthcare-related expenses directly attributable to COVID-19. This included costs associated with increased patient loads, the acquisition of personal protective equipment (PPE), and the implementation of new safety protocols. Secondly, the PRF was intended to offset lost revenue experienced by healthcare facilities due to the pandemic. Many hospitals and clinics faced significant financial strain as elective procedures were postponed and routine patient visits declined, even as COVID-related care demands surged.
A key condition attached to receiving PRF payments was the balance billing requirement. Hospitals accepting these funds were mandated to agree that they would not seek out-of-pocket payments from patients diagnosed with presumptive or actual COVID-19 that exceeded what these patients would have owed had they received care from in-network providers. This measure was crucial to protect patients from unexpected and potentially exorbitant medical bills, often referred to as “surprise billing,” during a public health emergency. The government recognized that patients seeking urgent COVID-19 treatment should not be financially penalized for receiving care from out-of-network facilities, especially when network options might be limited in crisis situations.
To ensure compliance with this critical balance billing requirement, HRSA has initiated a nationwide audit program. This audit is designed to assess whether hospitals that received PRF distributions and agreed to the associated terms adhered to the balance billing stipulations for patients admitted for COVID-19 treatment, particularly those who were out-of-network. The audit process will involve a thorough examination of billing practices, supporting documentation, and internal controls implemented by hospitals to guarantee adherence to the balance billing rules. This scrutiny underscores the government’s commitment to ensuring that PRF funds were utilized responsibly and in accordance with the intended purpose of providing financial relief to healthcare providers while simultaneously safeguarding patients from unfair billing practices during the COVID-19 pandemic.
