Situation Report | July 27, 2020
As announced in a recent member alert, the U.S. Department of Health and Human Services (HHS) has extended the deadline for Medicaid Provider Relief Funding from July 20 to August 3.
In addition to delaying the deadline, HHS posted new Frequently Asked Questions (FAQs) related to this funding. The revised FAQs are available here.
Newly added are questions about eligibility for the Program of All-inclusive Care for the Elderly (PACE); the “curated” list of providers; calculation of the number of full time employees (FTEs); lost revenues; validation of tax identification numbers; and more.
Providers are advised to review the FAQs, particularly the following ones that address whether they have to pay taxes on any received Relief funds:
Q: May a health care provider that receives a payment from the Provider Relief Fund exclude this payment from gross income as a qualified disaster relief payment under section 139 of the Internal Revenue Code?
A: No. A payment to a business, even if the business is a sole proprietorship, does not qualify as a qualified disaster relief payment under section 139. The payment from the Provider Relief Fund is includible in gross income under section 61 of the Code.
Q: Is a tax-exempt health care provider subject to tax on a payment it receives from the Provider Relief Fund?
A: Generally, no. A health care provider that is described in section 501(c) of the Code generally is exempt from federal income taxation under section 501(a). Nonetheless, a payment received by a tax-exempt health care provider from the Provider Relief Fund may be subject to tax under section 511 if the payment reimburses the provider for expenses or lost revenue attributable to an unrelated trade or business as defined in section 513.
For more information, visit the Internal Revenue Services website.
On July 10, HCA held a webinar on this potential source of provider funding; to obtain a recording, contact Teresa Brown.
As covered in numerous communications, the funding is for providers who bill Medicaid fee-for-service and/or Medicaid managed care and meet other eligibility criteria. Information on the program, including copies of the application and instructions, links to previous webinars, a web portal video, a new Fact Sheet and other resources are available on the HHS website.