What's Next: Navigating the Shift from Response to Recovery August 20, 2020 Mississippi Healthcare Financial Management Conference
Today’s Presenters Laura Gillenwater, CPA Kade Moody, CPA, CHFP Vicki Smith, CFE Senior Manager Partner Senior Manager Healthcare Healthcare Government Services
About HORNE 33 PARTNERS 850 + TEAM MEMBERS $100 M + EXPECTED REVENUE FOR 2020 SERVICES INDUSTRIES
Emergency Funds Experience With 15+ years experience helping state We guide clients through program requirements, anticipate agencies manage Federal and State agency next steps and reduce time spent on documentation and disaster relief funds, HORNE is currently submission. assisting in the administration of $4.4B in We offer a compliance-oriented perspective to help maximize CARES Act and COVID-19 related funding for eligible reimbursements from a variety of funding sources: state emergency management agencies.
1. What to know about CARES Act Funds 2. What to know about FEMA Funds 3. Putting it all together
CARES Act Provider Relief Funds • Provider Relief Funds Distribution to date • Reporting Requirements Laura Gillenwater
Provider Relief Funds Distributions* as of August 20, 2020 General, Phase 1 General, Phase 2 $1.4 High-Impact $37.0 $50.0 Rural $5.0 SNF Allocation $15.0 Tribal Hospitals, Clinics, Urban Health Centers $15.0 Safety Net Hospitals $13.2 $4.9 $22.0 Medicaid, CHIP, Dental $11.0 Nursing Homes $0.5 Children's Hospitals Remaining, incl. Uninsured COVID-19 Patients * in in Bil illions ions HORNELLP/Healthcare.com
General Distributions Phase 2 Phase 1 $50B $15B Eligibility Portal closes 8/28/20
Targeted Distributions • High Impact Distributions - $22B • Two rounds – Positive admissions through April 10 – Positive admissions through June 10 • Rural Distributions - $11.3B • Two rounds – Rural acute care hospitals, RHCs, CAHs, and CHCs – Rural specialty hospitals, urban hospitals reclassified to rural, and certain hospitals in small metro areas
Targeted Distributions, continued • SNF Distribution - $4.9B • Tribal Distribution - $0.5B • Safety Net Hospital Distribution - $14.7B • Three rounds – Eligible hospitals under initial criteria – Eligible hospitals under expanded criteria – Free-standing children’s hospitals
Uninsured Portal • $2B appropriated through other COVID Acts as well as portion of $100B in CARES Act • Portal opened on HRSA website 4/27, claims submissions started 5/6 • For providers who have tested uninsured individuals for COVID-19 or have treated uninsured individuals with a positive COVID-19 diagnosis on or after Feb 4th, 2020. • Reimbursement will be at Medicare rates • Terms and Conditions for these funds different than most of the allocations
Reporting Requirements • Reporting system will become available on 10/1/20 • All recipients must report by 2/15/21 on expenditures through 12/31/20 • For any funds not used by 12/31/20, a second and final report will report will be due by 7/31/21 • Still awaiting further guidance – HHS failed to publish by their own 8/17 deadline
MS CARES Act Funds • MS has allocated $80M to hospitals – formula based on hospitalized COVID-19 patients treated as of 6/21/20 and number of MS licensed beds in the hospital • Being administered by MDOH • Monthly reporting due at the end of each month • Funds must be used by 12/15/2020 • Do not cover lost revenue
FEMA & COVID-19 • Category B – Emergency Protective Measures • Date of Declaration – March 20, 2020 • COVID-19 costs eligible retroactively to January 20, 2020 • 75% Federal Funding of Eligible Costs Vicki Smith Vicki Smith
Eligibility to Receive FEMA Funding • Be an eligible applicant • Be an eligible facility • Perform eligible work • Incur eligible documented costs
FEMA COVID-19 Guiding Documents Relating to Medical Care to Date
Emergency Protective Measures • Primary Care Facilities • Work performed must be related to the treatment of COVID-19 patients. Includes confirmed and suspected; • Medical equipment necessary to respond to COVID-19 (equipment purchases are subject to disposition requirements); • Purchase & delivery of PPE, durable medical, and consumable medical supplies (supply purchases are subject to disposition requirements); • Certain labor costs. – Any labor costs that are included in patient billing and/or otherwise covered by another funding source are not eligible for FEMA PA.
Emergency Protective Measures • Temporary and Expanded Medical Facilities • FEMA may approve work and costs associated with temporary medical facilities or expanded medical facilities in response to the COVID-19 emergency. • These facilities may be used to treat COVID-19 patients, non- COVID-19 patients, or both • Medical care activities and associated costs in a temporary or expanded medical facility may be eligible absent another payor. – Maintenance while in operationally ready but unused status (“warm”) • Costs to expand a primary medical care facility must be feasible and cost effective. In most cases, permanent renovations are not eligible without demonstration that work can be completed in time to address COVID-19 and is a cost-effective option vs temporary built out.
Equipment Disposition Impact Tangible personal property having useful life of more than one year and a per-unit acquisition costs equals or exceeds the lesser of the capitalization level established by the applicant for financial purposes or $5,000. • If purchased with PA funding, when no longer needed to respond or recover from incident, Applicant may use items for other federally funded programs or projects, provided the Applicant informs FEMA. Otherwise; – Current Fair Market value greater than $5,000. FEMA reduces funding by FMV amount. – Current Fair Market value is less than $5,000. FEMA does not reduce eligible funding.
Purchased Supplies Disposition Impact All applicants must calculate current Fair Market Value of any unused residual supplies (including materials) that FEMA funded for any of its projects and determinate the aggregate total. • Aggregate total of residual supplies greater than $5,000. FEMA reduces funding by FMV amount. • Aggregate total of residual supplies is less than $5,000. FEMA does not reduce eligible funding.
Management Costs – FEMA Category Z Project • Administrative costs related to managing grant funds and documentation • Document labor, materials, and equipment usage as shown above • Keep separate from other costs
Purchasing under Exigent or Emergency Circumstances Once the documented exigency or emergency period ends, transition Costs must still be All efforts must be to a procurement reasonable. fully documented . process that includes full and open competition is required
Purchasing under Exigent or Emergency Circumstances What Federal Procurement Requirements Still Apply During Exigent or Emergency Circumstances? Contracts must include the required contract clauses Must complete a cost or price analysis if contract exceeds the Federal simplified acquisition threshold (Currently $250,000) Contracts must be awarded to a responsible contractor Use of cost-plus-percentage-of-cost contracting is prohibited Time & material contracts are only allowed under certain conditions
Purchasing under Exigent or Emergency Circumstances Resources FEMA Tutorial https://www.youtube.com/watch?v=SdlNKNvu_uw&feature=youtu.be FEMA Fact Sheet https://www.fema.gov/media-library-data/1537192764124- 4c99f98f8cf5b63584ac80d252b0a9b5/EE_Procurment_PA_Fact_Sheet_1- 18-2018_508_FINAL.pdf A separate justification is required for each instance of noncompetitive procurement.
Required Contract Provisions Required Provision Contract Criteria All contracts must Legal/contractual/administrative remedies 1. > SAT ($250k) for breach of contract contain the applicable 2. Termination for cause or convenience > $10k clauses described in 3. Equal Employment Opportunity Construction Work Appendix II to the 4. Davis Bacon Act Construction Work 5. Copeland Anti-Kickback Act Construction Work > $2,000 Uniform Rules Contract Work Hours and Safety Standards > $100k + mechanics or laborers 6. (2 CFR § 200) Act Rights to inventions made under a contract 7. Funding agreement or agreement Clean Air Act and Federal Water Pollution 8. >$150k Control Act 9. Debarment and Suspension All 10. Bryd Anti-Lobbying Amendment All (>$100k: Certification) Applicant is a state or political 11. Procurement of Recovered Materials subdivision of a state. Work involves the use of materials. 12. Access to Records All qrco.de/bbV6qN
Cost or Price Analysis FEMA Pricing Guide qrco.de/bbV6qu qrco.de/bbV6qZ
Debarment Check All vendors must be checked against the exclusion list at SAM.gov qrco.de/bbV6rC
Expedited Project Can fund 50% of estimated cost of project at obligation • Minimal documentation required to receive 50% • All documentation required to close project and receive full funding amount • When building project application in FEMA Grants Portal, the “expedited” project type is selected • Ensure procurement/contract is compliant
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