In late October 2020, the Department of Health and Human Services (“HHS”) released guidance on use of Provider Relief Fund (“PRF”) payments to cover costs associated with a potential COVID-19 vaccine. Also, in late October, HHS Office of the Inspector General (“OIG”) announced a review of the Health Resource and Services Administration’s (“HRSA”) administration of the PRF. The PRF is a $175 billion fund created by Congress in the CARES Act and administered by HHS, through HRSA, to provide financial relief to healthcare providers during the COVID-19 pandemic.
A provider who retains a payment from the PRF must agree to certain restrictions on use of the payment. For example, the payment may only be used to prevent, prepare for or respond to coronavirus; to reimburse the recipient for health care related expenses or lost revenues that are attributable to coronavirus; and cannot be used to reimburse expenses or losses that have been reimbursed from other sources or that other sources are obligated to reimburse. These restrictions led to speculation about how the payments could be used with regard to a potential COVID-19 vaccine, especially in light of both the required cold-storage and other logistical challenges of the vaccines currently under development as well as the Center for Medicare & Medicaid Services’ (“CMS”) promises to cover the cost of the vaccine.
After CMS announced that it would cover the cost of the vaccine, HHS clarified its position regarding the PRF. Because Medicare, Medicaid, and CHIP will pay for the doses and administration of the vaccine, providers cannot use the PRF payment to reimburse themselves for these expenses. However, PRF payments may be used for COVID-19 vaccine distribution and logistics, including purchase of additional refrigerators, personnel costs to provide vaccinations, and acquiring doses of a vaccine (including transportation costs not otherwise reimbursed). Moreover, funds may be used before an FDA-licensed or approved vaccine becomes available.