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COVID-19: Medicaid and Children’s Health Insurance Providers - $15 Billion in CARES Funding

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On June 9th, 2020, the US Department of Health and Human Services (HHS) announced an expansion of its Provider Relief Fund.
June 19, 2020

On June 9th, 2020, the US Department of Health and Human Services (HHS) announced an expansion of its Provider Relief Fund. The expansion will distribute $15 billion into eligible Medicaid and Children’s Health Insurance Program (CHIP) providers that participate in state Medicaid and CHIP programs. The funding will supply relief to Medicaid and CHIP healthcare providers experiencing lost revenues or increased expenses due to COVID-19.1

The $15 billion distributed by HHS to healthcare providers participating in Medicaid and CHIP programs will be paid on the basis of annual patient revenue. The initial general distribution provided payments to approximately 62% of all providers participating in state Medicaid and CHIP programs. HHS hopes to use this round of payments to make the Provider Relief Fund available to the 38% of healthcare providers who did not receive funding through the general distribution. The types of providers potentially eligible for this funding include pediatricians, obstetricians, gynecologists, dentists, opioid treatment and behavioral health providers, assisted living facilities, and other home and community-based services providers. HHS estimates that nearly one million healthcare providers could be eligible for this funding.2

To receive the distributions, healthcare providers will be required to meet the following criteria:

  • The provider must participate in state Medicaid and CHIP programs.
  • The provider has not received a payment from the Provider Relief Fund General Allocation.
  • The provider has billed their state Medicaid/CHIP programs for healthcare-related services between January 1, 2018 and May 31, 2020 OR the provider owns an included subsidiary that has billed Medicaid for healthcare-related services during the period of January 1, 2018 to December 31, 2019.
  • The provider must have either filed a federal income tax return for the fiscal years of 2017, 2018, or 2019 OR be an entity exempt from filing a federal income tax return and have no beneficial owner that is required to file a federal income tax return.
  • The provider has provided patient care after January 31, 2020.
  • The provider must not have permanently ceased providing patient care directly, or indirectly through included subsidiaries.
  • If the applicant is an individual, he or she must have gross receipts or sales from providing patient care reported on Form 1040, Schedule C, Line 1, excluding income reported on a W-2 as a (statutory) employee.3 

The payment to each provider will be at least 2% of reported gross revenue from patient care. Each distribution to healthcare providers will be based on each provider’s annual patient revenue and the number of Medicare patients providers serve. Providers can enter this information on the Provider Relief Fund Payment Portal available here. The final amount each provider receives will be determined after the data is submitted.4

Before submitting their applications, healthcare providers should familiarize themselves with the Medicaid Provider Distribution Instructions here5, and the Medicaid Provider Distribution Application Form here.6 Healthcare providers must submit applications and their gross revenues from patient care for calendar year 2017, or 2018, or 2019 by July 20, 2020.7


Readers should not act upon information presented without individual professional consultation.

Any federal tax advice contained in this communication (including any attachments): (i) is intended for your use only; (ii) is based on the accuracy and completeness of the facts you have provided us; and (iii) may not be relied upon to avoid penalties.


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