First Provider Relief Fund Indictment Provides Window Into Enforcement Issues

On February 10, 2021, the United States Department of Justice filed the first criminal charges relating to a alleged violation of the terms the Provider Relief Fund (PRF). The allegations contained in the indictment illustrate some of the pitfalls of the PRF and the importance of compliance with its terms. It may also provide insight into coming enforcement actions.

The alleged defendant was a resident of southeastern Michigan who owned and operated a home health agency in Indiana. The home health agency closed in January 2020 and filed a notice of voluntary termination with Medicare in March 2020. However, despite the filing of this notice, when the first wave of payments under the PRF were automatically deposited into providers’ accounts in April, the defendant’s home health agency received approximately $38,000. The defendant then allegedly submitted an attestation to the terms and conditions of the PRF payment and allegedly distributed the funds to family members in a series of checks, all just under $10,000. The indictment charged the defendant with one count of Theft of Public Money, Property, or Records.

This indictment touches several possible areas of enforcement or audits of PRF payments, including eligibility criteria, attestations, and use of the funds. The first wave of payments under the PRF consisted of $30 billion that was automatically deposited in providers’ accounts in amounts based on a provider’s 2019 Medicare billing. Providers did not make requests or applications for this funding. However, simply because a provider received money did not mean they were entitled to keep it, a provider also had to meet the eligibility criteria, such as the requirement that it provided services after January 31, 2020.

Providers were required to either attest to their compliance with the terms and conditions of the PRF payment, including eligibility criteria and restrictions on use of the funds, or return the money to HHS. Providers who took no action were “deemed” to have attested that they were in compliance with the terms and conditions. Some have argued that a “deemed” attestation, which was not alleged to have occurred in this indictment, would be more difficult for the government to enforce; however, this course of action carries significant risk to the provider.

Providers who received payments were also required to use the payment only to prevent, prepare for, and respond to coronavirus, and that the payment would reimburse the provider only for healthcare related expenses or lost revenues that are attributable to coronavirus. This is the most likely area of enforcement for PRF payments because it was the policy goal of the fund. However, it may also be the most difficult for providers, as the guidance relating to use of the PRF payments unfolded and evolved over time, often months after provider received the funds.

For over 35 years, Wachler & Associates has represented healthcare providers and suppliers nationwide in a variety of health law matters, and our attorneys can assist providers and suppliers in understanding the Provider Relief Fund. If you or your healthcare entity has any questions pertaining to healthcare compliance, please contact an experienced healthcare attorney  at 248-544-0888 or wapc@wachler.com.