In support of the Provider Relief Funding received by hospices, COVID-19 PHE incremental expenses incurred are now required reporting on a quarterly basis. These expenses, as well as lost revenues, will be reported as a use of the Provider Relief Funding. We have received many calls regarding reporting expenses and whether certain types of expenses would qualify as COVID-19 PHE expenses. These expenses generally represent additional costs, or increased costs, that were incurred because of the COVID-19 PHE.
We recommend that all such expenses be segregated in the accounting records (general ledger) of the hospice. The following is an example of the accounts which could be used to record these expenses. This list is not necessarily all-inclusive. Expenses, and lost income, which can be claimed are patient service related, consistent with the way the Provider Relief Funds were allocated (net patient service revenues). The expenses should be identified in a manner consistent with the cost reporting and tax reporting needs of the hospice. This separate, but consistent reporting, will allow those responsible for tax reporting and cost reporting to accumulate expenses as appropriate.
Hospices are encouraged to vigilantly review expenses incurred on or after January 27, 2020 to identify any types of these expenses that may have been incurred. As additional information becomes available, hospices, and other providers can improve expense identification. Additionally, hospices should be discussing these expenses with their external auditors and other legal or financial advisors before the end of the initial reporting period (June 30, 2020).
Support needs to be retained for all expenses charged or journal entries made to the COVID-19 PHE expense accounts. This support can take a variety of forms.
- Salaries and Wages, including direct COVID-19 PHE related payments, additional COVID-19 Compensation (pay add-ons, bonuses), Productivity Loss (measurable COVID-19 related):
- Administrative, Nursing Administration (Clinical Management), Registered Nurses, LPN, Nurse Practitioner, Aides, Medical Social Services, Therapy Services, Pastoral, Bereavement, Palliative Care,
- Employer Benefits,
- Contracted Services, including Administrative, Registered Nurses, LPN, Nurse Practitioner, Aides, Medical Social Services, Therapy Services, Pastoral, Bereavement, Palliative Care,
- Recruiting/Employee Screening COVID-19 related,
- Other Administrative Costs,
- Computer Hardware/Software,
- Inpatient/Facility Contracted/Other,
- Medical Supplies,
- Safety Supply Costs,
- Other Patient Care Costs,
- COVID-19 Education, Webinars, etc.,
- COVID-19 Travel,
- Facility Supplies,
- Facility Expenses, Including Renovations and Alterations,
- Other COVID-19 PHE Expenses, and
- PPP Loan Forgiveness for COVID-19 Expenses (Income Account), see below.
PPP Loan Forgiveness Income should be separately reported to the extent that any COVID-19 PHE expenses were used in the determination of the PPP Loan forgiveness. This allows the hospice to internally and externally report, i.e. audited financial statements, all the identifiable COVID-19 PHE expenses, even if such expenses are not entirely charged against the Provider Relief Funds (expenses funded through other sources, including PPP Loan forgiveness, cannot be charged as a use of Provider Relief Funds).
We will continually be providing additional information regarding the Provider Relief Funding, eligible expenses, lost revenues, and reporting in follow-up reporting.