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As the SARS-CoV-2 virus and incidence of COVID-19 continue to evolve, the pivotal role hospitals and health systems play for our nation is more important than ever. With the unprecedented task of responding to this pandemic, providers now face increasing challenges caused by new costs and lost revenue. In response to these growing needs, the federal government has created funding mechanisms to help providers mitigate these financial headwinds.  

On March 13, 2020, President Trump declared COVID-19 a national emergency, enacting the emergency powers of the federal government pursuant to Part 501(b) of the Robert T. Stafford Disaster Relief and Emergency Assistance Act of 1988 (Stafford Act). This allows the federal government to use approximately $40 billion from FEMA in fighting the COVID-19 pandemic. As a result of this declaration, state, territorial, tribal and local government entities and certain private nonprofit (PNP) organizations are eligible to apply for FEMA Public Assistance. The FEMA funding made available through the president’s emergency declaration is designed to reimburse qualified organizations for much of their emergency response cost—but only if their application for funding is properly structured and timely presented.  

Beyond the Stafford Act, Congress passed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), which authorized $100 billion for the Public Health and Social Services Emergency Fund. The $100 billion fund was established to help hospitals ramp up quickly, in response to new demands, giving the U.S. Department of Health & Human Services (HHS) Secretary broad discretion over how the $100 billion fund will be distributed, although it’s not yet clear how these funds will be allocated.

Who’s eligible?

PNP Healthcare Providers

PNP healthcare providers that own and/or operate medical or custodial care facilities are eligible for reimbursement. To verify eligibility, a nonprofit provider must be able to show it has:

  • A ruling letter from the IRS granting tax exemption under 501(c), (d) or (e)
  • Documentation from the state substantiating that the nonrevenue-producing organization or entity is a nonprofit entity organized or doing business under state law
  • Evidence of ownership or operation of an eligible facility*

*An eligible facility is one that provides an eligible service, including emergency, medical, custodial care and other essential social services

Private for-profit hospitals and health systems aren’t eligible for assistance from FEMA directly; however, state, local, tribal or territorial governmental entities may contract with for-profit hospitals to carry out eligible emergency protective measures. FEMA will then reimburse the governmental entity for the cost of the eligible work, which would then be paid to the private provider for its services.

What types of emergency protective measures are reimbursable?

It’s important that providers fully understand which specific costs are considered reimbursable emergency protective measures under the Stafford Act.  

Under the law, emergency medical care is eligible as an emergency protective measure for public and PNP medical facilities if the facility provides an emergency medical service necessary to save lives and/or protect public health and safety. In this case, emergency medical care related to COVID-19 cases is eligible as an emergency protective measure.

Below is a listing of some of the reimbursable costs:

  • Costs related to patient evacuation when such action is required
  • In limited circumstances, costs for essential components of a facility are urgently needed to save lives or protect health and safety, such as an emergency room 
  • Emergency medical care costs, such as:
    • Triage and medically necessary tests and diagnosis related to COVID-19 cases
    • Emergency medical treatment of COVID-19 patients
    • Prescription costs related to COVID-19 treatment
    • Use or lease of specialized medical equipment necessary to respond to COVID-19 cases
    • Purchase of personal protective equipment, durable medical equipment and consumable medical supplies necessary to respond to COVID-19 cases (disposition requirements may apply)
    • Medical waste disposal related to eligible emergency medical care
    • Emergency medical transport related to COVID-19
    • Temporary medical facilities and expanded medical care facility capacity for COVID-19 for facilities overwhelmed by COVID-19 cases and/or to quarantine patients infected or potentially infected by COVID-19+

+Temporary facilities and expansions may be used to treat COVID-19 patients or non-COVID-19 patients, as appropriate

How can healthcare providers apply for funding?

FEMA is simplifying the Public Assistance application and funding process to address the magnitude of this event and allow for the receipt of eligible funding more quickly. FEMA is developing an online form where applicants explain work activities, answer basic questions, submit limited supporting documentation and provide a cost estimate. FEMA will review this information, follow up with limited requests for additional information if necessary and award assistance. Applicants also can directly apply for reimbursement without waiting for FEMA to assign a Program Delivery Manager. Applicants may apply directly for assistance through the Public Assistance Grants Portal.  

For more information on eligibility guidance, please visit FEMA’s Public Assistance Policy, Guidance, and Fact Sheets and COVID-19 pages. In addition, application support and tutorials are available on the Resource tab in the Public Assistance Grants Portal.

Due to the rapidly changing information regarding COVID-19, all guidance contained in this article is current as of the date of publication. If you have questions or need assistance, reach out to your BKD Trusted Advisoror use the Contact Us form below.

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