What's Next: Navigating the Shift from Response to Recovery August - - PowerPoint PPT Presentation

August 20, 2020 Mississippi Healthcare Financial Management Conference

What's Next:

Navigating the Shift from Response to Recovery

Vicki Smith, CFE

Senior Manager Government Services

Laura Gillenwater, CPA

Senior Manager Healthcare

Kade Moody, CPA, CHFP

Partner Healthcare

Today’s Presenters

About HORNE

PARTNERS

33

TEAM MEMBERS

850+

EXPECTED REVENUE FOR 2020

$100M+

INDUSTRIES SERVICES

With 15+ years experience helping state agencies manage Federal and State agency disaster relief funds, HORNE is currently assisting in the administration of $4.4B in CARES Act and COVID-19 related funding for state emergency management agencies. We guide clients through program requirements, anticipate next steps and reduce time spent on documentation and submission.

Emergency Funds Experience

We offer a compliance-oriented perspective to help maximize eligible reimbursements from a variety of funding sources:

• 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

$50.0 $15.0 $22.0 $11.0 $4.9 $0.5 $13.2 $15.0 $5.0 $1.4 $37.0

General, Phase 1 General, Phase 2 High-Impact Rural SNF Allocation Tribal Hospitals, Clinics, Urban Health Centers Safety Net Hospitals Medicaid, CHIP, Dental Nursing Homes Children's Hospitals Remaining, incl. Uninsured COVID-19 Patients

HORNELLP/Healthcare.com

Provider Relief Funds Distributions*

as of August 20, 2020

* in in Bil illions ions

General Distributions

Phase 1 $50B Phase 2 $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
• f 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

• ne 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

• ther 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.

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.

Purchased Supplies Disposition Impact

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

Costs must still be reasonable. All efforts must be fully documented. Once the documented exigency or emergency period ends, transition to a procurement process that includes full and open competition is required

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

A separate justification is required for each instance of noncompetitive procurement.

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

Purchasing under Exigent or Emergency Circumstances Resources

Required Contract Provisions

All contracts must contain the applicable clauses described in Appendix II to the Uniform Rules (2 CFR § 200)

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Required Provision Contract Criteria 1. Legal/contractual/administrative remedies for breach of contract > SAT ($250k) 2. Termination for cause or convenience > $10k 3. Equal Employment Opportunity Construction Work 4. Davis Bacon Act Construction Work 5. Copeland Anti-Kickback Act Construction Work > $2,000 6. Contract Work Hours and Safety Standards Act > $100k + mechanics or laborers 7. Rights to inventions made under a contract

• r agreement

Funding agreement 8. Clean Air Act and Federal Water Pollution Control Act >$150k 9. Debarment and Suspension All 10. Bryd Anti-Lobbying Amendment All (>$100k: Certification) 11. Procurement of Recovered Materials Applicant is a state or political subdivision of a state. Work involves the use of materials. 12. Access to Records All

Cost or Price Analysis

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FEMA Pricing Guide

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All vendors must be checked against the exclusion list at SAM.gov

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Debarment Check

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

Duplication of Benefits

• As defined by Section 312 of the Robert T. Stafford Disaster Relief

and Emergency Assistance Act (42 U.S.C. § 5155) Federal law prohibits any person, business, concern, or other entity from receiving federal funds for any loss for which they have received financial assistance under any other program, insurance, or any

• ther source. A duplication of benefits (DOB) occurs when:
• A beneficiary receives assistance;
• The assistance is from multiple sources; and
• The assistance amount exceeds the need for an identified recovery purpose.
• The prohibition regarding DOB applies to federally funded programs

providing financial assistance as a result of a major disaster or emergency declaration.

State, county and city agencies (SLTT) have purchased PPE and contracted for medical staffing. These supplies and labor assets have been provided to hospitals free of charge. Hospitals routinely bill patients and those billing rates include supplies and

• labor. Does this create a

duplication of benefits (DOB)?

Scenario

→ The hospitals are receiving a good or service, not funding. If the same PA applicant (hospital) receives insurance payments from patients’ insurance, there is no duplicative financial assistance (prohibited by 312) because the hospital has not received financial assistance from either the SLTT, FEMA or another source of Federal funding. → If the hospital as an eligible applicant seeks FEMA funding, it cannot claim costs that it did not incur (e.g., for goods and services provided by SLTT) or for which it received financial assistance from another source. Anecdotally, it may be unlikely that typical hospital billing structures/insurance would account for the increased need for staffing, equipment, and supplies that the SLTTs are providing. → If medical facilities seek funding from FEMA (as an eligible applicant in their

• wn right), FEMA will condition those grants as to disallow funding for any

goods or services that were provided or funded by SLTT governments, other Federal agencies, other CARES Act funding, or insurance.

Scenario

Putting It All Together

• Strategies for shifting from response to recovery
• Hard Trends
• Q & A

Kade Moody

Safety

Need a set of guiding principles and a strategy that can be fluid

• Of Employees

→ The health and well-being of your team → Team members will have different personal situations → Privacy concerns → Ripple effect

• Of Patients

→ This moment will be forever remembered

• Of Information

→ Cyber risks

• Tone from the Top matters

Compliance and Complexities

• Significant dollars coming from every direction
• FAQs change daily
• Multiple funding streams
• Single Audit requirements
• State oversight

Flexibility and Speed

• Perfect is the enemy of good
• No off-the-shelf playbook
• Virtual War Room
• Contingency planning – what happens if the Top is

unavailable?

• Expanding collaboration

Financial Liquidity

• Annual budgets are not enough — budgets must be

dynamic

• Create flexibility and ranges in cash flow planning
• Work closely with your lenders to ensure flexibility in

covenants

• Potential committee focused on business continuity and

sustainability

Big Picture View + Attention to Detail

• Push forward into a new era of economic recovery and
• pportunity
• What will your organization look like in the newspaper?
• Compliance and complexity abound

Big Picture View + Attention to Detail

• Hard Trends

→ New fears → New technology, including artificial intelligence and

bandwidth challenges

→ Bankruptcies and thus changes in payer mix → Increased complexities of chronic conditions → Increased mental health needs → Decreased demand for commercial office space → More geographically diverse workforce → Ability to provide a broader reach of healthcare → The Pandemic will end ….. and there likely will be

another

Big Picture View + Attention to Detail

What is your societal purpose? How will decisions impact stakeholders?

Consolidation and Relationships

• Technology
• New models of care delivery
• New entrants into the industry
• Private Equity, VCs and Public Markets
• Payers becoming providers
• New “ownership” of healthcare means new
• perating reality
• Doing what is best for the patient competing with doing

what is best for the investors

Consolidation and Relationships

• Must have an ethical framework to ensure these

two objectives do not conflict

• Must ensure adequate consideration of clinical

impact

• Trust is key to success

QUESTIONS?

Vicki Smith, CFE

Senior Manager Government Services

Laura Gillenwater, CPA

Senior Manager Healthcare

Kade Moody, CPA, CHFP

Partner Healthcare

Thank you!