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 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 is Chair of the Firm’s Health Care Group, with a national practice representing clients in the health care services sector in complex business transactions (private equity, M&A and joint ventures) and regulatory matters. After more than 25 years, David has developed deep…

David is Chair of the Firm’s Health Care Group, with a national practice representing clients in the health care services sector in complex business transactions (private equity, M&A and joint ventures) and regulatory matters. After more than 25 years, David has developed deep healthcare industry expertise which he leverages to provide practical, creative and actionable advice to clients. Recently, David has been involved with representing stakeholders as they navigate a shifting healthcare landscape arising from COVID-19 including CARES Act compliance matters and implementing new healthcare delivery models.

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

As one of the architects of the NYS ACO statute and regulations and a former member of the NYS Value Based Payment Workgroup, David has deep expertise in regulatory and transactional  issues involving large provider networks and risk bearing entities. David has also worked with clients to develop demonstration projects with the Center for Medicare and Medicaid Innovation.

In the community, David is dedicated to expanding access to primary care services for underserved populations. For almost 10 years, he has been an active member of the Board of Directors of Primary Care Development Corporation (“PCDC”). PCDC is a nonprofit Community Development Financial Institution dedicated to providing low-cost debt financing to not-for-profit organizations to expand and improve primary care in underserved communities.

Photo of Ryan P. Blaney Ryan P. 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 S. Madden Jason S. 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 an associate in the Corporate Department and a member of the Health Care Group. His practice focuses on representing health care clients, including hospitals and health systems, academic medical centers, physician organizations, telehealth platforms, and digital health companies. Daniel provides…

Daniel Weinstein is an associate in the Corporate Department and a member of the Health Care Group. His practice focuses on representing health care clients, including hospitals and health systems, academic medical centers, physician organizations, telehealth platforms, and digital health companies. Daniel provides legal advice on a wide range of regulatory, corporate, and transactional matters, such as Medicare/Medicaid reimbursement, fraud and abuse compliance, managed care contracting, value-based payment arrangements, HIPAA, practice expansions, and general corporate and business planning.

Daniel maintains an active pro bono practice, which includes representing veterans seeking disability benefits and leading Election Protection call centers. He is also an active member in the NYC Bar Association’s health law committees.

Daniel earned his J.D. from NYU School of Law, where he was President of the Health Law & Policy Society and a Notes Editor for the NYU Journal of Legislation & Public Policy. Prior to law school, Daniel worked as a health care policy consultant at both NORC at the University of Chicago and Navigant Consulting. Daniel received his B.A. in Political Science and Community Health from Tufts University, graduating summa cum laude.