The Coronavirus Relief and Response Act Impacts on the HHS Provider Relief Fund

January 2021

On January 15th, 2021 the U.S. Department of Health & Human Services released updated guidance on the Provider Relief Fund (PRF) reporting requirements. Below, we outline what has changed since their last communication on November 2nd, 2020.

This amended guidance is in response to the Coronavirus Response and Relief Supplemental Appropriations Act (Act).  The act was passed in December 2020 and added an additional $3 billion to the PRF along with new language regarding reporting requirements

Please note this is a summary of information and additional detail and guidance and can be found under reporting and auditing FAQ at HHS.gov
  • On January 15, 2021 The Department of Health and Human Services (HHS) announced a delay in reporting of the Provider Relief Fund.  Further details on the deadline for this reporting has not yet been communicated by HHS.  Recipients of Provider Relief Fund payments greater than $10,000 may register to report on use of funds as of December 31, 2020 starting January 15, 2021. Healthcare providers should go into the portal and register and establish an account now so that when the portal is open for reporting they are prepared to fulfill their reporting requirements.
  • Recipients who have not used all of the funds after December 31, 2020, have six more months from January 1 – June 30, 2021 to use remaining funds.  Healthcare organizations will have to submit a second report before July 31, 2021 on how funds were utilized for that six-month period 
  • The new guidelines further define the reporting entity and how to report if there is a parent company with subsidiaries for both General and Targeted Distributions:
    • Parent organizations with multiple TINs that received General distributions or received them from parent organizations can report the usage of these funds even if the parent was not the entity that completed the attestation
    • While a Targeted Distribution may now be transferred from the receiving subsidiary to another subsidiary by the parent organization, the original subsidiary must report any of the Targeted Distribution it received that was transferred.
    • The new guidance does state that distribution of Transferred Targeted Distributions will likely fall under increased scrutiny through an audit by HRSA.
  • The calculation of lost revenue has been modified by HHS through this new guidance. Lost Revenue is calculated for the full year and can be calculated as follows
    • Difference between 2019 and 2020 actual patient care revenue.  The revenue must be submitted by patient care mix and by quarter for the 2019 year
    • Difference between 2020 budgeted and 2020 actual.  The budget must have been established and approved prior to March 27, 2020 and this budget, as well as an attestation from the CEO or CFO that this budget was submitted and approved prior to March 27, 2020, will have to be submitted
    • Reasonable method of estimating revenue.  An explanation of the methodology, why it is reasonable and how the lost revenue was caused by coronavirus and not another source will need to be submitted.
  • Recipients with unexpended PRF funds in full after the end of calendar year 2020, have an additional six months to utilize remaining funds for expenses or lost revenue attributable to coronavirus in an amount not to exceed the difference between:
    • 2019 Quarter 1 to Quarter 2 and 2021 Quarter 1 to Quarter 2 actual revenue,
    • 2020 Quarter 1 to Quarter 2 budgeted revenue and 2021 Quarter 1 to Quarter 2 actual revenue
 

BDO Take Away

In the wake of this new guidance, healthcare providers should undertake the following steps:
  • Register in the HHS portal and establish an account as soon as possible
  • Revisit lost revenue calculations to determine if current methodology is appropriate or if an updated methodology would be more appropriate under the new guidance
  • Understand the ability to transfer General and Targeted distributions and the impact on reporting of these funds
  • Develop reporting procedures for lost revenue and increased expense for reporting in the HHS portal