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Volume 20.35

The Department of Health and Human Services (“HHS”) has released updated guidance on reporting the use of Provider Relief Funds (“PRF”).  The updates provide some clarification regarding the upcoming reporting.

Providers can follow their normal accounting method (cash or accrual) when making the report submission.  Additionally, patient care lost revenues are determined based on changes in net patient care revenues as described below and available here.

PRF can be used for:

  1. Healthcare related expenses attributable to coronavirus that another source has not reimbursed and is not obligated to reimburse, which may include General and Administrative (G&A) or healthcare related operating expenses (further defined within the data elements section below).  Providers should have been accumulating expenses attributable to the COVID-19 PHE.  Reported expenses will be reduced to the extent that expenses are directly attributed to PRF.
  2. PRF payment amounts not fully expended on healthcare related expenses attributable to coronavirus are then applied to patient care lost revenues, net of the healthcare related expenses attributable to coronavirus calculated under step 1 above. Recipients may apply PRF payments toward lost revenue, up to the amount of the difference between their 2019 and 2020 actual patient care revenue.  Providers with unused funds after December 31, 2020 must submit a second and final report no later than July 31, 2021 that includes patient care related revenue amounts earned January 1, 2021 through June 30, 2021.

Reporting will include demographic information, expenses attributable to coronavirus, general and administrative expenses attributable to coronavirus (after reduction for expenses reimbursed by other sources), healthcare related expenses attributable to coronavirus (after reduction for expenses reimbursed by other sources), and lost revenue, which is determined by comparing net charges from patient care for 2020 against 2019, revenues by payor source, other financial assistance received, and certain other personnel, patient, and facility data.

The reporting system will not open until January 15, 2021 and the initial reporting deadline is February 15, 2021.  We currently do not expect the deadline to remain February 15, 2021 as many providers will be unable to accumulate the necessary information through December 31, 2020 to appropriately report eligible expenses and lost revenues.  However, providers should prepare accordingly.  In this regard, we encourage providers to accumulate financial and statistical data from January 1, 2019 through September 30, 2020 now as quarterly reporting will be required based on existing HHS guidance.  By accumulating this information now, providers can begin to assess the extent to which the use of PRF is documented, develop strategies for reporting through December 31, 2020, and not find themselves scrambling to meet the February 15, 2021, or revised deadline for reporting.

The revised reporting requirements can be viewed here.

Many providers received SBA guaranteed loans and are now preparing to apply for loan forgiveness.  These providers need to exercise caution to better ensure that expenses eligible for funding by PRF are not considered to be funded through SBA loan forgiveness.  Accordingly, the application for loan forgiveness should be carefully reviewed in conjunction with anticipated reporting for the use of PRF.