Medicaid, CHIP, and Dental Relief Fund: Overview and Deadline

Medicaid, CHIP, and Dental Relief Fund: Overview and Deadline

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By Jim Chinn, CPA, Tax Senior Manager | Healthcare & Medical Services Team

CARES ACT Provider Relief Fund Application for Healthcare Providers

As authorized by the CARES Act, the Department of Health and Human Services (HHS) has allotted 15 billion dollars in grants to certain providers that billed Medicaid/Children’s Health Insurance Program (CHIP) programs for services between January 1, 2018, and December 31, 2019. The grant amount is equal to 2 percent of revenue from patient care for calendar year 2017, 2018, or 2019 as chosen by the provider. Providers must complete an online application by August 3, 2020, and attest to certain Terms and Conditions to receive the funding. The grants do not need to be repaid as long as the funds are used in accordance with HHS Terms and Conditions.

Which Healthcare Providers Are Eligible for the Grants?

In order to be eligible for the grant, a provider must have:

  • Not received a payment from the 50 billion dollar General Distribution to Medicare providers
    • Generally, these payments were directly deposited into provider bank accounts between April 10 and April 17 and were sent via Optum Bank with “HHSPAYMENT” in the description.
  • Billed Medicaid/CHIP programs or Medicaid managed care plans for health care-related services between January 1, 2018 and December 31, 2019
    • Dental practices that do not bill Medicare are also eligible to participate assuming they meet the other criteria. HHS has curated a list of dental practice tax identification numbers (TINs) and that it will match against applications from dental providers.
  • Filed federal income tax returns for 2017, 2018, or 2019 reporting gross receipts or sales from providing patient care; or be exempt from filing a return
  • Provided patient care after January 31, 2020, and have not ceased providing patient care

Grant Recipient Terms and Conditions

The grant recipient must attest to several terms and conditions within 90 days of receiving payment:

  • On or after January 31, 2020, the grant recipient provided diagnosis, testing, or care for actual or possible COVID-19 patients
    • Note HHS broadly views every patient as a possible case of COVID-19
  • The recipient is not terminated, revoked, or precluded from participating in Medicare, Medicaid, or other Federal health care programs
  • The funds will be used to recoup lost revenue or for health care related expenses incurred to prevent, prepare for, and respond to COVID-19 (see expanded Uses of Funds section below for more information)
  • The funds will not be used to reimburse expenses or losses that have already been reimbursed from other sources or that other sources are obligated to reimburse
    • HHS has specified that providers who received PPP loans are eligible for these grants; however, the grant funds cannot be used to cover expenses
  • The recipient agrees to comply with future HHS reporting and information requirements and consents to public disclosure of payment

Complete terms and conditions can be found here .

How Healthcare Providers Can Use the Grant Funds

As I mentioned earlier, the grant funds can be used to recoup lost revenue or to cover health care related expenses. Here are some examples of expenditures for which the funds can be used (not exhaustive):

  • Supplies or equipment used to provide health care services for possible or actual COVID-19 patients
  • Workforce training
  • Reporting COVID-19 test results to federal, state, or local governments
  • Building or constructing temporary structures to expand capacity for COVID-19 patients or to provide services to non-COVID-19 patients in a separate area
  • Acquiring facilities, health care practices, staffing, or other resources to expand or preserve care delivery

The Medicaid, CHIP, and Dental Relief Fund may provide much needed cash-flow to support health-care providers and their practices during these very uncertain times. Please visit the U.S. Department of Health & Human Services website for more information on the program and to apply for funding. But remember, applications are due August 3, 2020!

Questions? Contact us. We are here to help your Healthcare Practice navigate the economic downturn.

Additional Resources for Healthcare Practices

COVID-19 Business Resource Library


About the Author

Jim is a Senior Manager in Keiter’s Tax Department. For the last 4 years, Jim has worked predominately with clients in the medical and dental industry where he provided tax planning and compliance services related to practice acquisitions and transitions. Jim strives to add value to his client relationships by being a trusted advisor. Keep up-to-date with Jim’s thought leadership on our blog.

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The information contained within this article is provided for informational purposes only and is current as of the date published. Online readers are advised not to act upon this information without seeking the service of a professional accountant, as this article is not a substitute for obtaining accounting, tax, or financial advice from a professional accountant.

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