On May 22, 2020, the U.S. Department of Health and Human Services’ (HHS) Office of Inspector General (OIG) updated its Work Plan to reflect its planned audit of the $50 billion disbursed by HHS to hospitals and other providers under the Public Health and Social Services Emergency Fund (Provider Relief Fund), which McGuireWoods most recently discussed in a May 22 legal alert. The Provider Relief Fund was included as part of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) and reimburses eligible healthcare providers for expenses and lost revenue attributable to the 2019 novel coronavirus (COVID-19). The Work Plan is used by OIG to set forth its planned and ongoing agency evaluations, audits, and inspections. The OIG expects to release its audit findings in fiscal year 2020.

The Provider Relief Fund audit will be conducted by OIG’s Office of Audit Services. These audits examine the performance of HHS programs and/or grantees and are intended to provide HHS with an independent assessment of the HHS programs and operations.

As is standard for all OIG Work Plan announcements, the OIG set forth the general details of its audit objectives. The announcement provided that OIG will obtain data and interview HHS officials to gain an understanding of how Provider Relief Fund payments were calculated and review Provider Relief Fund payments for compliance with CARES Act requirements. In addition, the OIG will seek to determine whether HHS’ controls over Provider Relief Fund payments ensured that payments were correctly calculated and disbursed to eligible providers. Such an audit may be in part a response to congressional interest; the U.S. House of Representatives included changes to the Provider Relief Fund program in its passage of H.R. 6800, the Health and Economic Recovery Omnibus Emergency Solutions Act (HEROES Act), as discussed in item 2 of a May 18 legal alert. The Senate is not expected to pass the HEROES Act, but such changes may be included in future legislation.

For background, the CARES Act, as supplemented by the Paycheck Protection Program and Health Care Enhancement Act, appropriated $175 billion total to the Provider Relief Fund to assist providers financially impacted by COVID-19. The CARES Act statutory language called for HHS to review applications prior to disbursement of the fund but HHS largely disbursed the funds without requiring a formal application or review. The $50 billion to be audited by OIG was allocated to Medicare facilities and providers affected by COVID-19. The initial $30 billion was automatically distributed between April 10, 2020 and April 17, 2020 in proportion to providers’ Medicare fee-for-service payments in 2019, as discussed in an April 10 legal alert. On April 24, 2020, HHS began distributing an additional $20 billion to providers based on their share of 2018 net patient revenue, which was automatic for certain providers that file annual cost report information to the government, and began accepting submissions from certain other eligible providers of their financial data for subsequent waves of distributions, as discussed in an April 27 legal alert.

In addition, on May 26, 2020, OIG announced its Strategic Plan for COVID-19 Oversight (Strategic Plan). In the Strategic Plan, OIG reiterated its intention to conduct audits and evaluations of the Provider Relief Fund in order prevent, detect, and remedy waste or misspending. OIG specifically highlighted its plan to fight fraud and abuse that diverts funding from its intended purposes or exploits emergency flexibilities granted to healthcare providers. OIG is also likely to consider whether the Provider Relief Fund (and other COVID-19 responses) were successful so HHS can leverage lessons learned from these programs in the future.

McGuireWoods is continuously monitoring information released by HHS and the Trump administration regarding the fund. Please contact the authors or any of the McGuireWoods COVID-19 Response Team members for additional information on the Provider Relief Fund and its availability to healthcare providers and for assistance with the documentation and attestation and reporting process.