Colin G. McCulloch, Member of the Firm in the Health Care & Life Sciences practice, in the firm’s Washington, DC, office, authored an article in Healthcare Business Today, titled “The Federal Government Is Taking Action Against COVID-19 Fraud—Here’s How Nursing Facilities Can Prepare.”

Following is an excerpt:

Congress distributed a lot of “free” money to help nursing facilities respond to the COVID-19 pandemic, appropriating a total of $9.44 billion specifically for skilled nursing facilities. The government distributed money under a number of different programs, each with its own rules for accounting for the money. For instance, nursing facilities could use lost revenues to account for general distributions from the Provider Relief Fund (PRF), but Nursing Home Infection Control targeted distributions and Quality Incentive Program payments under the PRF program were required to be accounted for by the hiring of staff to address infection control or other financial expenditures to safeguard the resident population during the pandemic. The Paycheck Protection Program, the Economic Injury Disaster Loan Program, and FEMA’s Public Assistance Program all had their own rules for applying and using funds. 

The rules were often evolving and unspecific because Congress’s goal was to get the relief funds in the hands of providers as quickly as possible. Now the government is catching up, and enforcement is a headline event. In May 2021, U.S. Attorney General Merrick Garland established a COVID-19 Fraud Enforcement Task Force, which has already charged over 1,000 criminal cases and opened over 200 civil investigations. President Biden has moved to reinforce this Task Force and recently announced the appointment of a Task Force Chief Prosecutor, who will focus on criminal cases against perpetrators of COVID-19-related fraud. Furthermore, according to remarks made by Garland at the American Bar Association’s annual white-collar crime conference, Biden’s 2022 budget request seeks $36.5 million to hire an additional 120 attorneys nationwide to handle COVID-19-related fraud cases.

Given the government’s strong stance against COVID-19-related fraud, nursing facilities should understand their reporting and audit requirements to minimize the risk of an enforcement action. Facilities that received PRF payments totaling over $10,000 during a payment received period are required to file reports, regardless of whether funds were received from general distributions, Nursing Home Infection Control distributions, or Quality Incentive Program payments. For facilities that received greater than $750,000 in a fiscal year, they will also have to submit a compliance report on the use of the funds prepared by an outside independent certified public accountant by the end of this calendar year.   

The Health Resources & Services Administration (HRSA) requires nursing facilities that received Nursing Home Infection Control funds and Quality Incentive Program payments, in particular, to support the use of those funds by reporting costs associated with reducing the COVID-19 threat to residents. This is distinct from the general distributions of the PRF that could be supported by lost revenue. 

It is important to note just how broad these reporting requirements are. For example, “hiring staff” may include asking and paying current staff to provide additional patient care and administrative support over existing levels. Similarly, “incurring expenses to improve infection control” includes not only personal protective equipment and laboratory expenses but also the costs of extra training for staff on infection control measures or the cost of hiring an infection control nurse. 

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