Home health providers, like other providers, are dealing with a vast array of service changes resulting from the COVID-19 PHE. Strategic planning for the future must include consideration of the permanent service and revenue changes that may result. Hospitals, rural health clinics, and FQHCs are permitted to expand services provided in the home and other settings, telehealth services are being expanded, and other service changes could have a significant impact, positive or negative, to the future of the home health agency. We encourage the efforts of national and state associations, as well as agencies to monitor and assess the implications, including financial results, of these changes with a strategic planning perspective.
COVID-19 PHE EXPENSES (SEPARATELY IDENTIFIED IN THE ACCOUNTING RECORDS)
In support of the Provider Relief Funding received by home health agencies, quarterly reporting will be required reflecting COVID-19 PHE incremental expenses incurred. 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 home health agency. 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 agency. This separation, but consistent reporting, will allow those responsible for tax reporting and cost reporting to accumulate expenses as appropriate.
Agencies are encouraged to vigilantly recognize these expenses and review expenses incurred on or after January 27, 2020 to identify these expenses. As additional information becomes available, agencies and other providers can improve expense identification. Additionally, agencies 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 compensation 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 (by discipline), Personal Care, Private Duty,
- Employer Benefits
- Contracted Services, including Administrative, Registered Nurses, LPN, Nurse Practitioner, Aides, Medical Social Services, Therapy Services (by discipline), Personal Care, Private Duty,
- Recruiting/Employee Screening COVID-19 related,
- Other Administrative Costs,
- Computer Hardware/Software,
- 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 agency 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.