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Providers Receiving Repayment Demands for Provider Relief Fund Payments

In response to the unprecedented challenges created by the COVID-19 pandemic, the Coronavirus Aid, Relief, and Economic Security (CARES) Act established the Provider Relief Fund (PRF) as an effort to financially support the nation’s healthcare providers as they grappled with COVID-19. To achieve this goal, the Health Resources & Services Administration (HRSA) was tasked with administering the PRF program, and distributed hundreds of thousands of payments from the program’s $178 billion fund to healthcare providers of all types. However, even though providers may have used the PRF funds for permitted COVID-related purposes, many providers are increasingly being demanded to return the money, and being given little to no notice or information as to why.

In the early days of the COVID-19 pandemic, the first batch of disbursements under the PRF program were unsolicited and were deposited directly into providers’ bank accounts without prior application or notice. Providers had to quickly decide whether to return the funds, or to keep the money and agree to abide by the terms and conditions of the PRF program, despite not knowing at the time precisely what those terms were. Many providers that are being subjected to the current rash of repayment demands received PRF funds during the earliest distribution phases.

The repayment demands themselves and the processes available to dispute such demands present an entirely new set of complications and may often give the impression that a provider is being unfairly targeted for performing valuable healthcare services during a public health emergency. As the administrator of the PRF program, HRSA is supposed to initially notify providers of any alleged non-compliance with the PRF program terms and conditions. Usually, this is due to HRSA’s claim that a provider has not submitted the required reporting before the appropriate deadline or within the late reporting timeframe. Notably, providers are increasingly commenting that they are not receiving any notices regarding compliance with the PRF program or reporting requirements, or further, that they are later discovering such notices were sent to the wrong address.

If HRSA does not receive a response from the provider or deems the provider to continue to be non-compliant with the PRF program, even where HRSA failed to send notices to the proper address, HRSA may elect to refer the demand for repayment to the United States Department of the Treasury for debt collection. Once HRSA refers an alleged debt to the Treasury, HRSA has asserted that it no longer has any authority over the debt and it will refuse to speak with providers or their representatives about the debt. Thus, Treasury will assume the role of debt collector and seek to collect on the alleged debt independent from HRSA by sending demands for payment directly to the provider. Generally, Treasury and its debt collectors will use correct addresses or contact information, and this is how a provider learns of the issue. Further, the Treasury has a broader collection and enforcement authority than HRSA. Once the Treasury is referred a debt from HRSA, Treasury may impose serious consequences on a provider to enforce the debt, such as wage garnishment and offset of federal health benefit plan payments, including Medicare payments.

There are several theories, but it is ultimately unclear why so many providers are not receiving relevant notice from HRSA. Providers who have received PRF funds should be aware that they are required to make certain reports to HRSA on the use of the money and should familiarize themselves with the reporting requirements and deadlines. Providers who have received  repayment demands should seek appropriate guidance in responding to and disputing any demands.

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 new developments in healthcare law and regulation. If you or your healthcare entity has any questions pertaining to Provider Relief Fund repayment demands or healthcare compliance, please contact an experienced healthcare attorney at 248-544-0888 or

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