HHS Offers Details for Provider Relief Fund Reporting Requirements

UPDATED NOVEMBER 6, 2020: On October 22, 2020, CMS issued the following update regarding their reporting instructions released in September.

On September 19, 2020, HHS issued instructions for reporting on the use of PRF distributions. These instructions, reflecting the Department’s balancing of dual objectives, limited the applicability of funds to an amount that would allow most providers to be no more profitable in 2020 than in 2019. At the time, HHS concluded that it would be inequitable to allow some providers to be more profitable in 2020 than 2019, while so many other providers struggled to remain viable. The September 19, 2020 reporting instructions placed a limitation on the permissible use of PRF money that HHS had not previously articulated, although previous guidance did not preclude the establishment of such a limitation in the future.

This decision to prohibit most providers from using PRF payments to become more profitable than they were pre-pandemic, in order to conserve resources to allocate to providers who were less profitable, has generated significant attention and opposition from many stakeholders and Members of Congress. There is consensus among stakeholders and Members of Congress who have reached out to HHS that the PRF should allow a provider to apply PRF payments against all lost revenues without limitation.

In consideration of this feedback, HHS has amended its reporting instructions to provide for the full applicability PRF distributions to lost revenues.

In a nutshell, the changes primarily affect the calculations used for determining loss of revenue. According to Healthcare Dive, “In this latest change, HHS wants to compare hospital revenue from all of 2019 to 2020 — a full year-over-year look. If hospitals posted a dip in revenue, they likely can keep the funds. But if they ultimately post higher revenue compared to the year prior, those funds are at risk.”

ORIGINAL ARTICLE PUBLISHED SEPTEMBER 24, 2020: Healthcare providers and facilities that received more than $10,000 in COVID-19 Provider Relief Funds (PRF) will need to report how they used the money through a new reporting system that will open on January 15, 2021. The Department of Health and Human Services (HHS) finally released the six-page guidance on September 19, 2020, after several earlier delays.

Who Should Report

Provider Relief Funds were appropriated early on during the COVID-19 public health emergency through two emergency spending bills, namely the Coronavirus Aid, Relief, and Economic Security (CARES) Act and the Paycheck Protection Program (PPP) and Health Care Enhancement Act. The funds were made available to eligible healthcare providers for healthcare related expenses or lost revenues attributable to the coronavirus.

Recipients of these funds agreed to Terms & Conditions, which require compliance with reporting requirements as specified by the Secretary of Health and Human Services in program instructions.

The reporting requirements do not apply, however, to the following recipients of Provider Relief Funds:

Nursing Home Infection Control distribution recipients
Rural Health Clinic Testing distribution recipients
Health Resources and Services Administration (HRSA) Uninsured Program reimbursement recipients

What To Report

The new guidance specifies what information will need to be reported, along with specific data items each provider will need to supply. Generally, providers will report healthcare-related expenses attributable to COVID-19 that have not or will not be reimbursed by other sources along with PRF payment amounts not fully expended on healthcare-related expenses that will be applied to lost revenues because of COVID-19.

If recipients do not expend PRF funds in full by the end of calendar year 2020, they will have an additional six months in which to use remaining amounts toward expenses attributable to COVID-19, or to apply toward lost revenues.

Guidelines Vary by Amounts Received

Providers who received between $10,000 and $499,999 will report their healthcare-related expenses in high-level categories of a.) General and Administrative (G&A) and b.) other healthcare-related operating expenses.

Recipients who received $500,000 or more in PRF payments are required to report healthcare-related expenses according to detailed segments within the two categories. For instance, G&A healthcare-related expenses are broken down into the following:

Mortgage/Rent
Insurance
Personnel
Fringe Benefits
Lease Payments
Utilities/Operations
Other General and Administrative Expenses.

Whereas, other healthcare-related operating expenses including the following:

Supplies
Equipment
Information Technology (IT)
Facilities
Other Healthcare-Related Expenses

When to Report

Providers will need to submit their initial reports by February 15, 2021. Providers who do not fully expend PRF funds prior to December 31, 2020, will have until July 31, 2021, to complete their final reporting.

Learn More

For more information about the recently released reporting requirements, check out these resources:

HHS’ Cares Act Provider Relief Fund Reporting Requirements and Auditing webpage
HHS’ Recent Notice: “General and Targeted Distribution Post-Payment Notice of Reporting Requirements”

The reporting guidance from HHS also reminded providers that reporting entities that expended $750,000 or more in aggregated federal financial assistance in 2020 (including PRF payments and other federal financial assistance) are subject to Single Audit requirements. To learn more about these audits, check out this article from Certified Public Accountants Katz Sapper & Miller, “Provider Relief Funds Received Under the CARES Act Impose Audit Requirements.”