QUESTION: Our hospital is eligible to receive money from the CARES Act Provider Relief Fund. The HHS Terms and Conditions say that the payment will only be used to prevent, prepare for, and respond to coronavirus, and shall reimburse the Recipient only for health care related expenses or lost revenues that are attributable to coronavirus. There is also a condition that none of the funds can be used to pay individual salaries “in excess of Executive Level II.” Can we still use the money to offset losses that our hospital and physician practices incurred resulting from the cancellation of elective procedures due to the lockdown order in our state?
ANSWER: Yes, as long as the funds are not used to subsidize any particular physician’s salary. The Terms and Conditions incorporate by reference HRSA guidance about the salary cap, which was part of the original Congressional grant appropriation. Effective January 2020, the “Executive Level II” salary level is $197,300. According to HRSA: “An individual’s institutional base salary is not constrained by the legislative provision for a limitation of salary. The rate limitation simply limits the amount that may be awarded and charged to HRSA awards. For individuals whose salary rates are in excess of Executive Level II, the non-federal entity may pay the excess from non-federal funds.” So as long as the money is not used to fund any particular individual’s salary, you should be able to use the money to offset general losses experienced by your hospital or physician practices without the salary cap affecting what you pay.