Experience. Integrity. Advocacy.
Experience. Integrity. Advocacy.

New Distributions and Other Provider Relief Fund News

New Distributions and Other Provider Relief Fund News

The Health Resources and Services Administration (HRSA) of the Department of Health and Human Services (HHS) recently made several announcements about past and future COVID-19 relief payments for healthcare providers.

New Distributions

Two new tranches have been earmarked for distribution from the provider relief fund, a pool allocated by several bills passed by Congress since the start of the public health emergency. Providers will be able to apply for a share of the $25.5 billion in relief funds beginning September 29, 2021. To streamline the application process and minimize administrative burdens, providers will apply for both programs in a single application. HRSA will use existing Medicaid/CHIP and Medicare claims data in calculating portions of these payments.

About $17 billion of the provider relief fund has been designated as Phase 4 of the General Distribution. Providers will receive funds based on lost revenues and changes in operating expenses from July 1, 2020, to March 31, 2021. 

According to HRSA, smaller providers will be reimbursed at a higher percentage of lost revenues and expenses than larger providers. HRSA also will provide “bonus” payments based on the amount of services providers deliver to Medicaid, CHIP, and Medicare patients, priced at the generally higher Medicare rates.

An additional $8.5 billion, allocated through the American Rescue Plan (ARP) Rural fund, will be distributed based on the amount of services providers furnish to Medicaid/CHIP and Medicare beneficiaries living in Federal Office of Rural Health Policy (FORHP)-defined rural areas.

These strategies were developed “to promote equity and to support providers with the most need,” according to HRSA. A recent report published in Health Affairs revealed that earlier federal pandemic relief funds allocated to hospitals were unevenly distributed and fell short in some communities with the highest burden. The authors of that report concluded that “the relationship between need and aid should be strengthened by deemphasizing historical net patient revenue in favor of a broader set of community and hospital characteristics.” 

Phase 3 Reconsiderations

In addition to announcing the new payment distributions, HHS also has released detailed information about the methodology utilized to calculate Phase 3 payments.

According to HRSA, a Phase 3 reconsideration process is currently being developed for providers who believe their Phase 3 payment was not calculated correctly. Further details are forthcoming.

60-Day Grace Period for Reporting Period 1

Finally, the deadline for reporting the outcome of initial provider relief funds issued for recipients who received one or more payments totalling $10,000 or more during Payment Received Period 1 (April 10, 2020, to June 30, 2020) is September 30, 2021. 

However, because of the surge of COVID-19 cases caused by the Delta variant, as well as other natural disasters occuring around the country, HRSA has implemented a 60-day Grace Period. Providers who do not meet the September 30 deadline will still be considered out of compliance; however, recoupment or other enforcement actions will not be initiated during the 60-day grace period which runs from October 1, 2021, through November 30, 2021.

Providers with remaining unused funds should return those as soon as possible after submitting their report. The deadline for submitting unused funds is 30 days after the end of the grace period, or December 30, 2021.

According to HRSA, the grace period pertains only to the Reporting Period 1 report submission deadline and does not change the Period of Availability for use of PRF payments.

Learn More

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Charity Singleton Craig

Charity Singleton Craig is a freelance writer and editor who provides communications and marketing services for CIPROMS. She is responsible for creating, editing, and managing all content, design, and interaction on the company website and social media channels in order to promote CIPROMS as a thought leader in healthcare billing and management.

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