Provider Relief Fund Reporting and Updated Guidance

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The Big Picture

With the Provider Relief Fund (PRF) reporting portal now open, the Department of Health & Human Services (HHS) has released additional guidance to providers on the reporting requirements and use of funds through two recent updates to the PRF FAQs (July 6 and July 15) and the posting of technical assistance documents. HHS has also held three scheduled webinars to provide technical assistance on reporting requirements and answer questions previously submitted to HHS. HHS noted that additional sessions may be scheduled.

Providers that received PRF payments in aggregate of $10,000 or more between April 10 and June 30, 2020 (Period 1) must have used those funds by June 30, 2021, and must complete reporting on the use of those funds by September 30, 2021. Compliance with this reporting deadline is critical as HHS has stressed that extensions on the deadline to report will not be granted, and the failure to report timely information may subject the PRF payments to recoupment. In the most recent update, HHS announced that it is developing an appeal process to review and reconsider payment uses based on submitted supporting documentation, recognizing that providers may have questions regarding the accuracy of their use of PRF payments. (More information on previous guidance related to the PRF is available on Insights@Manatt—Manatt’s subscription service that provides personalized, in-depth insights into legal, policy and market developments to keep you ahead of the trends shaping our evolving health system. To learn more or schedule a demo, please contact Barret Jefferds at bjefferds@manatt.com.)

Overview of Updated PRF Reporting Guidance

The updated PRF FAQs provide clarification on a number of open issues that were raised by PRF recipients. Set forth below is a summary of some of the key issues within the new guidance.

  • Documentation of Use of Funds. Providers are required to maintain supporting documentation which demonstrates that(1) costs were “obligated/incurred” during the period of availability, (2) PRF payments were used for health care-related expenses attributable to COVID-19 and (3) expenses or losses were not reimbursed from other sources and other sources were not obligated to reimburse them. While providers are not required to submit this documentation when reporting, the burden of proof is on the provider to ensure that adequate documentation is maintained to substantiate that these funds were used for health care-related expenses or lost revenues attributable to the COVID-19 pandemic, and that those expenses or losses were not reimbursed from other sources and other sources were not obligated to reimburse them. It is important to note that the updated FAQs have added the term “obligated” in relation to provider costs during the period of availability, which was not contained in any prior versions of the FAQs or the Post-Payment Notice of Reporting Requirements.
  • Lost Revenue Quarterly Calculation. PRF payments may be used to cover those quarters where patient care revenue losses occurred even if the provider experienced quarterly patient care revenue losses during some, but not all, of the quarters during the period of availability of funds. Lost revenues are calculated for each quarter during the period of availability, as a stand-alone calculation for each quarter, with 2019 quarters serving as a baseline. For each calendar year of reporting, the applicable quarters where revenues were lost are then totaled to determine an annual lost revenues amount. The annual lost revenues are then added together.
  • Lost Revenue Carryforward. For providers that have more lost revenue in a Payment Received Period than PRF payments for the same period, that portion of lost revenue can be carried forward and applied against payments received during later Payment Received Periods and included in the lost revenues reported for later reporting periods, provided expenses and lost revenues are not duplicated.
  • Lost Revenues Prior to Receipt of Payments. The updated FAQs authorize providers to use payments for lost revenues incurred prior to the receipt of the payments (i.e., pre-award) so long as they are attributable to the COVID-19 pandemic. However, similar to the treatment of pre-award expenses, the lost revenues must have been incurred only during the period of availability correlating to the Payment Received Date.
  • HHS Review of Lost Revenue Calculation. For providers that elect to use “Option iii” of the available options for calculating lost revenue, the Health Resources and Services Administration (HRSA) will notify a provider if its proposed methodology is not reasonable, including if it does not demonstrate with a reasonable certainty that claimed lost revenues were the result of the COVID-19 pandemic. If HRSA determines that the proposed alternate methodology is not reasonable, the provider will need to resubmit its report within 30 days using either “Option i” or “Option ii” to calculate lost revenues attributable to the COVID-19 pandemic.1
  • Reporting of Other Assistance Received. The Other Assistance Received reported to HRSA will not be used in the calculation of expenses or lost revenues. Providers are expected to make a determination of their expenses applied to PRF payments after considering Other Assistance Received and taking into account that PRF payments may not be used for expenses or lost revenues that other sources have reimbursed or that other sources are obligated to reimburse. Patient care revenue should not be reported as part of Other Assistance Received as it is a source of revenue, not a source of other assistance.
  • Reporting of Other COVID-19-Related Assistance. Providers that anticipate they will receive COVID-19-related financial assistance (e.g., Federal Emergency Management Agency (FEMA) funds) but have not yet received the assistance should not include the anticipated assistance in their PRF reporting. In the event providers receive a retroactive payment from FEMA, the guidance prohibits the recipient from using the FEMA payment on expenses/lost revenues already reimbursed by PRF payments. If FEMA funds are received during the same period in which a provider is reporting on use of PRF payments, the receipt and application of each payment type is required in the PRF reporting process.
  • Possession of Items for Eligibility. For tangible items (e.g., back-ordered personal protective equipment, capital equipment), providers are not required to be in possession of such items before the Deadline to Use Funds in order for the items to be considered an eligible expense. However, the guidance notes that the cost for such items must be incurred before the Deadline to Use Funds. Providers must follow their usual basis of accounting (e.g., cash, accrual, modified accrual) to determine expenses.
  • Supplemental Grants for FQHCs and FQHC Look-Alikes. Grant funds awarded to federally qualified health centers (FQHCs) and FQHC Look-Alikes for expenses or losses that are potentially eligible for PRF payments need to be fully drawn down before PRF payments can be used. If FQHCs or FQHC Look-Alikes have incurred expenses or losses attributable to the COVID-19 pandemic that these grant awards do not cover, they may use PRF payments toward those expenses or losses.
  • Returning Unused Payments. Providers must return any unused funds within 30 calendar days after the end of the reporting period. For unused PRF payments received in Period 1, providers must return these funds to HHS by October 30, 2021, which is a 30-day extension from the date given in prior guidance on the return of unused payments. To return any unused funds, providers are instructed to use the Return Unused PRF Funds Portal.
  • Extensions on Use of Funds and Reporting. Providers are not able to request extensions on use of funds or submissions of their required reports for any of the reporting periods.
  • Appeal of HHS Decisions on Use of Payments. HHS will be developing a structured process to reconsider payment uses based on submitted supporting documentation, recognizing that providers may have questions regarding the accuracy of their use of PRF payments. Providers should expect additional details regarding this process from HHS as it is developed.

1 Pursuant to the Post-Payment Notice of Reporting Requirements, providers may choose to apply PRF payments toward lost revenues using one of three options:

  • Option i: the difference between actual patient care revenues
  • Option ii: the difference between budgeted (prior to March 27, 2020) and actual patient care revenues
  • Option iii: calculated by any reasonable method of estimating revenues
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