SPECIAL BULLETIN COVID-19 #129: Reporting Requirements and Financial Support to Nursing Homes under Secretarial Order No.2

Tuesday, September 8, 2020


Secretarial Order No.2 (the Order) went into effect on Aug. 7, 2020. This Order requires nursing homes to test all staff/health care personnel (HCP) who have the potential for direct or indirect exposure to patients or infectious materials at least every other week. Nursing homes covered under this Order must also follow NC Department of Health and Human Services (NC DHHS) guidance for additional testing and reporting when one or more cases are detected. The Order requires that nursing homes report testing activity every two weeks. Testing reporting under the Order begins with testing occurring on or after Aug. 17,2020.  


This bulletin outlines the process by which nursing homes may access interim payments of State-administered federal funding to support compliance with the Order. This bulletin does not address the process for reporting testing activity required by the Order. For testing and reporting information, including training materials, please visit NC Medicaid’s Secretarial Order #2: Reporting and Payment Resources webpage.

Secretarial Order No. 2 and CMS-3401-IFC 

During the week of Aug. 24, 2020, Centers for Medicare and Medicaid Services (CMS) established expanded testing  requirements and enforcement measures for nursing homes participating in the Medicaid/Medicare programs through CMS-3401-IFC and related guidance. At the time of this Special Bulletin’s publication, Secretarial Order No. 2 remains in effect. The Department is currently reviewing the Order in light of these new federal requirements and will issue further guidance. Please direct questions about CMS-3401-IFC to NC DHSR Nursing Home Licensure section. Interim payments will prioritize compensating for allowable staff/HCP testing costs necessary to comply with the Secretarial Order. Nursing home providers subject to higher testing requirements under CMS-3401-IFC are strongly encouraged to seek support through the federal Provider Relief Fund or other payment mechanism.

Funding Available through CARES Act

Section 2.2 of NC Session Law 2020-4 establishes the Coronavirus Relief Fund, using funds allocated to NC through the federal Coronavirus Aid, Relief, and Economic Security (CARES) Act. The NC General Assembly (in SL 2020-88) appropriated $125M of federal CARES Act funding to DHHS to for “COVID-19 testing, contact tracing, and trends tracking and analysis” initiatives, and DHHS has allocated $25 million of this funding to help cover nursing homes’ staff/HCP testing costs under Secretarial Order No. 2. NC DHHS will make interim payments to nursing homes that will be reconciled later with actual testing costs, following the parameters established within this Bulletin. 

These payments are subject to funding availability, such that once the $25 million is exhausted, payments may end. CARES Act funds are time limited, for expenditures no later than Dec. 30, 2020. 

Funds may be used for eligible testing conducted on or after the Order’s effective date (Aug. 7, 2020).

Nursing homes that fail to substantially comply with the Order’s testing and reporting requirements will not be eligible for interim payments and will be required to refund payments if testing is not performed in accordance with the Order. 

Payment Process and Requirements

NC Medicaid will administer these funds on behalf of NC DHHS through the process outlined below.

NC DHHS will provide interim payments to facilities on a monthly basis, following the schedule established here. Payments will be based on the projected or actual costs of the reimbursable tests.

NC DHHS will later complete a reconciliation process by comparing interim payments to actual allowable costs and recouping overages if interim payment(s) exceeded the actual costs of tests performed.

NC DHHS will not require a nursing home to provide supporting documentation in order to receive interim payments based on projected costs, but will require that the nursing home submit documentation to verify testing activity and identify possible payment overages, as part of the reconciliation process. Reconciliation may occur throughout this year with the final reconciliation date to be determined.

All payments are subject to CARES Act timelines and funding availability.

Payment Rates

Interim payments will be calculated based on a rate no greater than $125.00 per laboratory-processed test or the costs of related point of care (POC) testing supplies, as outlined below. 

With the expanded availability of POC testing devices and associated antigen diagnostic tests, NC DHHS anticipates facilities may elect to utilize these devices as part of its testing strategy. 

For tests performed with a POC testing device, NC DHHS will reimburse only for test and supply costs directly related to using the POC device. Tests received as part of a nursing home’s initial test supply, provided through the federal distribution process, should not be included in costs to be reimbursed. However, subsequent provider costs directly related to use of the POC device will be reimbursable.

Costs Not Allowable through Payments Related to Secretarial Order No. 2

  • Costs related to testing residents.
  • Supplies/personal protective equipment (PPE) used when conducting testing activities.
  • Staff/HCP wages/salaries 
  • Supplies/PPE used when caring for residents.
  • Tests received as part of a nursing home’s initial test supply, provided through the federal distribution process or any other source where there was not an expense to the nursing home.
  • Tests compensated through other payment mechanisms including but not limited to an employee health plan, federal Provider Relief Funds or other third party payers.

Payment Processing: Guidance for Medicaid and non-Medicaid Nursing Home Providers

  • Nursing homes enrolled in NC Medicaid with an active National Provider Identifier (NPI), will receive payment as part of their regular checkwrite, with the testing payment identified as a separate line item on the Remittance Advice statement.
  • Nursing homes not enrolled in NC Medicaid must submit an NC OSC Substitute W-9 and be established as a vendor with NC DHHS. The Substitute W-9 form is available through the NC Office of State Controller’s website. Providers who do not participate in NC Medicaid may elect to sign up for EFT through NC DHHS Office of the Controller (but may also elect not to do so).
    • TIMELINE NOTE: In order to ensure prompt payment, a provider who is not enrolled in the NC Medicaid program should submit an NC OSC Substitute W9 form to Medicaid.ProviderReimbursement@dhhs.nc.gov immediately if it has not already done so. 
  • A provider participation agreement may be required.

Testing and Financial Reporting under Secretarial Order No. 2

Nursing homes will submit their status of testing activity and related financial reporting through the COVID-19 Testing Nursing Home Reporting Portal, following a schedule established here.

Current and upcoming reporting guidance will be posted here and also available as knowledge articles through the Portal.

The interim payment will cover allowable testing costs for testing performed Aug. 7, 2020, through Aug. 30, 2020. Nursing homes seeking payment for testing weeks Aug. 17, 2020-Aug. 23, 2020 and Aug. 24,2020-Aug. 30, 2020, must submit required testing data for those weeks no later than close of business on Tuesday, Sept. 8, 2020. Nursing homes that do not submit sufficient related testing reporting for any of the testing weeks in the period covered by the Order may be subject to recoupment of testing payments for the period of non-compliance. 

Interim Payments Subject to Audit Review 

Providers receiving interim payments under Secretarial Order No.2 must retain corresponding records and are subject to any review/audit to which CARES Act funds are subject. Adhering to the requirements and processes communicated in this Bulletin will support nursing homes’ compliance with subsequent audit requirements.  

Additional Training and Learning Opportunities

NC DHHS hosted a two part webinar series, providing an overview of Secretarial Order No. 2 and related requirements.  

NC DHHS will also host weekly Office Hours to answer provider questions about reporting and payment support under Secretarial Order No. 2 on Thursdays through Sept. 17, 2020 from 10:30-11:30 a.m.

All training information is posted on NC Medicaid’s Secretarial Order #2: Reporting and Payment Resources webpage.