CARES Act, Payroll Protection, and Medicare Advance Payment Programs

This document was last updated on July 20, 2020 to reflect changes made by the Department of Health and Human Services to its existing guidance.

In response to widespread cash flow issues resulting from the COVID-19 public health emergency, Congress enacted two key pieces of legislation: the CARES Act and the Paycheck Protection Program and Health Care Enhancement Act (“PPPHCEA”). This guide details the compliance and oversight implications stemming from health care providers’ receipt of COVID-19-related grants and loans through the various CARES Act and PPPHCEA funding programs.

The terms and conditions, attestations, and other requirements attached to the receipt of such funds are rife with ambiguity and impose substantial burdens on providers to ensure the proper application for funds, as well as compliant receipt, distribution, and use-tracking of such funds.

These requirements present potentially significant financial and reputational risk to recipients whose resources are already stretched thin in responding to COVID-19.

We dissect key avenues through which COVID-19-related funds dispersed under the aforementioned statutes could be recouped from recipients, or serve as the basis for other government enforcement actions, mainly under the False Claims Act.

We elaborate on the most significant areas of potential recipient liability, with a focus on detailed compliance tips that providers can employ to minimize the risk of such liability for the three main programs under which providers will receive funds:

  1. the Provider Relief Fund;
  2. the Paycheck Protection Program; and
  3. the Medicare Accelerated and Advance Payment Program.

The in-depth guide concludes with a list of concrete best practices for CARES Act and PPPHCEA related funding compliance.

A Guide to Compliance Considerations for Health Care Providers

Photo of Richard Zall Richard Zall

Rick Zall is chair of Proskauer’s Health Care Group. Rick advises health care companies, investors and lenders in their most challenging transactions, including mergers and acquisitions, joint ventures, financings and complex commercial agreements.

With a deep understanding of the health care industry, Rick…

Rick Zall is chair of Proskauer’s Health Care Group. Rick advises health care companies, investors and lenders in their most challenging transactions, including mergers and acquisitions, joint ventures, financings and complex commercial agreements.

With a deep understanding of the health care industry, Rick is known for providing practical, creative solutions in order to successfully close deals for his clients.

Rick advises clients on state and federal health care regulatory compliance matters, including the corporate practice of medicine, digital health, telemedicine, HIPAA, fraud and abuse, Medicare and Medicaid payment reimbursement, MACRA, and value based payment.

Rick advises clients on state and federal health care regulatory compliance matters, including the corporate practice of medicine, digital health, telemedicine, HIPAA, fraud and abuse, Medicare and Medicaid payment reimbursement, and value based payment.  As businesses globally are impacted by the Coronavirus (COVID-19) pandemic, Rick is a member of the firm’s Coronavirus Response Team helping clients respond and solve issues across myriad fronts, from understanding CARES Act programs to compliance with applicable state and local guidelines for employers to follow.

Rick is a respected thought leader in the health care industry and frequently presents at key industry events. He has served in government, is a co-founder of the New York Primary Care Development Corporation (PCDC), and earlier in his career was CEO of a private equity-backed medical management company. Rick has also directed two industry studies for the Robert Wood Johnson Foundation and serves as principal outside counsel and board secretary to the Clinton Health Access Initiative (CHAI).

Photo of Edward S. Kornreich Edward S. Kornreich

Past long-standing chair of Proskauer’s Health Care Department, Ed Kornreich is a recognized authority on the legal, regulatory and business issues related to health care services.

Ed works primarily on health care transactions, regulatory compliance, health care payment and governance issues for varied…

Past long-standing chair of Proskauer’s Health Care Department, Ed Kornreich is a recognized authority on the legal, regulatory and business issues related to health care services.

Ed works primarily on health care transactions, regulatory compliance, health care payment and governance issues for varied providers (both for-profit and not-for-profit), vendors, GPOs, distributors and entrepreneurs. His approach combines sensitivity to meeting regulatory business goals with a comprehensive and realistic assessment of the health care environment, and he is particularly experienced in dealing with the complex issues related to integrated health care systems.

After working for the Legal Aid Society, Ed entered private practice, where he helped represent a major public hospital corporation in a series of reimbursement disputes with the state and federal governments, and counseled New York area hospitals and nursing homes on reimbursement and operational issues. Thereafter, Ed served as General Counsel of St. Luke’s-Roosevelt Hospital Center, one of the largest teaching hospitals in New York. After leaving St. Luke’s-Roosevelt Hospital Center, Ed joined Proskauer as a Partner in 1990.

Ed frequently writes and lectures on Medicare and Medicaid reimbursement, health care integration, not-for-profit law and corporate governance issues, and the application of federal and state anti-kickback and “Stark” laws to health care transactions.

Photo of David Manko David Manko

David has more than two decades of experience representing clients in the health care industry. His experience includes complex business transactions such as mergers, acquisitions, joint ventures and other contractual relationships. He is particularly adept at structuring health care transactions that implicate regulatory…

David has more than two decades of experience representing clients in the health care industry. His experience includes complex business transactions such as mergers, acquisitions, joint ventures and other contractual relationships. He is particularly adept at structuring health care transactions that implicate regulatory issues such as the Corporate Practice of Medicine, the Stark Law and the Anti-Kickback Statute. Recently, David has been highly involved in representing sponsors and targets in private equity transactions involving health care technology companies, physician practices, MSOs and other service providers. He also has experience unwinding transactions that have not achieved the objectives of one or both parties.

In 2017, Chambers USA recognized David as a regulatory and transactional healthcare lawyer “who earns impressive reviews from peers and clients alike.” Says one commentator, “he is a master negotiator and is second to none in his responsiveness,” adding that “he turns around whatever needs to be done promptly and efficiently.”

Photo of Ryan Blaney Ryan Blaney

Ryan Blaney represents health care, life science, and technology clients in a range of regulatory, enforcement, internal investigative and transactional matters, with particular expertise in privacy law, life sciences and digital health. He also has expertise in regulatory compliance, counseling clients on a…

Ryan Blaney represents health care, life science, and technology clients in a range of regulatory, enforcement, internal investigative and transactional matters, with particular expertise in privacy law, life sciences and digital health. He also has expertise in regulatory compliance, counseling clients on a range of matters, including health care fraud and abuse, third party reimbursement, data breach issues, data privacy and security, and FDA regulatory matters. He has substantial experience in pharmaceutical lifecycle management and competition issues, including the Hatch- Waxman Act and Biosimilars Price Competition and Innovations Act.

Ryan serves information technology companies, public and private health care companies, hospitals and physician organizations, manufacturers, medical device companies, and health plans. He guides venture capital groups, private equity funds, investment banks, and other investors on health care regulatory issues in connection with financing, mergers and acquisitions, and restructuring.

Ryan’s work is greatly informed by his experience as a teacher. Prior to attending law school, Ryan earned a master’s degree in education and taught at an under-resourced Catholic middle school. He is known for his ability to communicate clearly and to coordinate large teams working on complex matters. Outside of his health law practice, Ryan has been repeatedly recognized for his public service and pro bono work. He has successfully handled numerous education-related cases, helped establish three nonprofit organizations and defended qualified recipients of disability benefits.

Photo of Jason Madden Jason Madden

Jason Madden is an associate in the Health Care Department. His practice focuses on representing health care clients, including hospitals, physician groups, not-for-profit corporations, private equity firms and other financial institutions. Jason provides legal advice on a wide range of regulatory, transactional and…

Jason Madden is an associate in the Health Care Department. His practice focuses on representing health care clients, including hospitals, physician groups, not-for-profit corporations, private equity firms and other financial institutions. Jason provides legal advice on a wide range of regulatory, transactional and litigation matters, including fraud and abuse compliance; HIPAA and data privacy; mergers, acquisitions and financings; and general corporate and business planning.

In addition, Jason actively participates in pro bono matters, representing not-for-profit organizations on a variety of matters, and is an active member of the American Health Lawyers Association (AHLA). Jason also volunteers at the Manhattan and Brooklyn Family Courts, and helped lead the Legal Aid Society’s Associate Campaign.

Photo of Daniel S. Weinstein Daniel S. Weinstein

Daniel Weinstein is a law clerk in the Health Care Department.