The Health Resources and Services Administration (HRSA) has announced the Provider Relief Fund will be subject to Single Audit requirements. Provider Relief Funding was provided to fund COVID-19 PHE expenses or lost revenue attributable to the COVID-19 PHE.
In accordance with the provisions of 2 CFR 200, Subpart F – Audit Requirements, nonfederal entities that expend financial assistance of $750,000 or more in federal awards will have a single or program-specific audit for their fiscal year that include the periods the funds are expended. HRSA has indicated the Provider Relief Funding program is subject to Single Audit requirements.
If you have received $750,000 or more in Provider Relief Funding and are not currently having an annual audit conducted on your financial statements, you may be required to have an audit conducted on your financial statements. We encourage you to contact the CPA who currently supports your financial reporting process. Healthcare providers that currently have their financial statements audited should reach out to their auditors regarding the potential modification to their current audit resulting from Provider Relief Funding. If you currently do not use a CPA for compilation, review, or audit of your financial statements, do not hesitate to reach out to us regarding whether you may be subject to such an audit and related matters.
Information is available here.
HHS ISSUES ADDITIONAL FAQs REGARDING PROVIDER RELIEF FUNDING
Repayment of Unused Funds
Recently issued FAQs attempt to clarify that unused funding for COVID-19 PHE expenses will be eventually repaid. Accordingly, healthcare providers should carefully record in their financial records both the receipt of funds, use of funds for qualifying expenses and lost revenues, and estimated repayment obligations.
“In order to accept a payment, must the provider have already incurred eligible expenses and losses higher than the Provider Relief Fund payment received? (Added 6/8/2020) No. Providers do not need to be able to prove, at the time they accept a Provider Relief Fund payment, that prior and/or future lost revenues and increased expenses attributable to COVID-19 (excluding those covered by other sources of reimbursement) meet or exceed their Provider Relief Fund payment. Instead, HHS expects that providers will only use Provider Relief Fund payments for permissible purposes and if, at the conclusion of the pandemic, providers have leftover Provider Relief Fund money that they cannot expend on permissible expenses or losses, then they will return this money to HHS. HHS will provide directions in the future about how to return unused funds. HHS reserves the right to audit Provider Relief Fund recipients in the future and collect any Relief Fund amounts that were used inappropriately.”
It is important that providers recognize COVID-19 PHE expenses reported to HHS exclude those covered by other sources of reimbursement. The Health Group, LLC will be issuing significant information pertaining to the appropriate accounting for expenses covered by other sources.
COVID-19 High Impact Area Targeted Distribution
Additionally, numerous FAQs were provided regarding the COVID-19 High Impact Area Targeted Distribution. The bipartisan CARES Act and the Paycheck Protection Program and Health Care Enhancement Act provided $175 billion in relief funds to hospitals and other healthcare providers on the front lines of the coronavirus response. The payments from the $12 billion COVID-19 High-Impact Allocation is being distributed by the Department of Health and Human Services through the Health Resources and Services Administration to 395 hospitals who provided inpatient care for 100 or more COVID-19 patients through April 10, 2020. $2 billion of these payments was distributed to these hospitals based on their Medicare disproportionate share and uncompensated care payments. These 395 hospitals accounted for 71 percent of COVID-19 inpatient admissions reported to HHS from nearly 6,000 hospitals around the country.
The FAQs, as updated can be reviewed here.