QUESTION: Our hospital received a couple of million dollars from the COVID-19 Provider Relief Fund. We are in the process of being acquired by a larger health system. Will we have to send the money back?
ANSWER: It depends on the form of the acquisition.
HHS recently posted the following on its Provider Relief Fund FAQ Page:
If the transaction is a purchase of the recipient entity (e.g., a purchase of its stock or membership interests), then the Provider Relief Fund recipient may continue to use the funds, regardless of its new owner. But if the transaction is an asset purchase (whether for some or all of the Provider Relief Fund recipient’s assets), then the original recipient must use the funds for its eligible expenses and lost revenues and return any unused funds to HHS. In these circumstances, the Provider Relief Fund money does not transfer to the buyer, however, buyers in these circumstances will be eligible to apply for future Provider Relief Fund payments. If a bankrupt recipient is liquidated, it must similarly use the funds for its eligible expenses and lost revenues and return any unused funds to HHS.