Health Law Advisor

In a previous post, we discussed the appropriate use of the Provider Relief Funds authorized and appropriated by Congress under the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act, Public Health and Social Services Emergency Fund (“Relief Fund”) for healthcare providers and facilities. Within that post, we specifically discussed the limitation imposed on use of the Relief Funds for payment of salaries, a topic of great interest to many recipients. Under the Terms and Conditions, recipients are prohibited from using the funds for salaries in excess of the Senior Executive Service Executive Level II amount – an annual salary of $197,300 – or $16,441 a month. We noted that, although the Department of Health and Human Services (“HHS”) had not spoken to this requirement with respect to the Provider Relief Funds, HHS permits other HHS grant Recipients to pay individuals’ salaries in excess of the $197,300 limit with non-federal funds.[1] Also, HHS’ federal contract regulations similarly limit use of federal contract funds for salary costs to the Executive Level II amount, but allow for amounts in excess of that limit to be paid with non-federal funds.[2]

To address the COVID-19 public health emergency fiscal burdens, Congress authorized and appropriated the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act[1], Public Health and Social Services Emergency Fund (“Relief Fund”) for healthcare providers and facilities. The Department of Health and Human Services (“HHS”) has begun to distribute several tranches of the Relief Funds. All totaled, Congress provided $175 billion to the Public Health and Social Services Emergency Fund (“Relief Fund”) through the CARES Act and the Payroll Protection Program and Health Care Act.[2]

As of May 7, 2020, HHS identified $50 billion for general distribution to Medicare providers. HHS distributed to Medicare providers the Relief Fund’s initial $45 billion tranche in April 2020, and is distributing the Relief Fund’s second $20 billion tranche. Also, HHS allocated Relief Funds to: hospitals in COVID-19 high impact areas ($10 billion); rural providers ($10 billion); Indian Health Services ($400 million), and skilled nursing facilities, dentists, and providers that take solely Medicaid (unidentified amounts).[3]