News & Events

UPDATED: CARES Act Provider Relief Fund Reporting Requirements Released by HHS

HHS reverses course and again permits healthcare providers to apply Provider Relief Fund payments against patient care lost “revenues” rather than limiting such application only to patient care lost “net operating income”.

In the CARES Act that became law on March 27th of this year, $100 billion was set aside for “health care related expenses or lost revenues that are attributable” to the COVID-19 pandemic. Commonly referred to as the “Provider Relief Fund,” the stated purpose of this $100 billion fund (which has been supplemented with an additional $75 billion pursuant to the Paycheck Protection Program and Health Care Enhancement Act) is to address the economic harm suffered by healthcare providers that have incurred (or will incur) additional expenses and have lost (or will lose) significant revenue as a result of the pandemic. Provider Relief Fund (“PRF”) payments have been made from either the “General Distribution” tranche or various “Targeted Distributions”. Terms and Conditions attached to such payments require recipient healthcare providers to, among other things, submit reports to the U.S. Department of Health and Human Services (HHS) in such form and including such content as specified by the HHS Secretary.

On October 22, 2020, HHS issued its most recent notice detailing certain post-payment reporting requirements for healthcare providers that have received one or more PRF payments exceeding $10,000 in the aggregate (whether from the General Distribution, the Targeted Distribution, or both). In conformance with the stated purpose of the PRF, such healthcare providers are broadly required to report (using their normal method of accounting, whether cash or accrual):

  1. healthcare related expenses attributable to the coronavirus, including G&A (General and Administrative) expenses and “healthcare related operating expenses”; and
  2. lost revenues attributable to the coronavirus, but only to the extent that the applicable PRF payments have not been fully expended on the healthcare related expenses attributable to the coronavirus described in item 1.

FAQ guidance issued earlier this year by HHS stated that, in determining lost revenue, providers could “use any reasonable method of estimating the revenue during March and April of 2020 compared to the same period had COVID-19 not appeared.”  However, guidance issued by HHS only a month ago, on September 19, 2020, changed the meaning of lost revenue to:  “a negative change in year-over-year net patient care operating income.”  The move triggered a significant backlash among policymakers and providers. In reversing course in its most recent October 22, 2020 policy update, HHS notes that “[t]here is a consensus among stakeholders and Members of Congress…that the [Provider Relief Fund] should allow a provider to apply [PRF payments] against all revenues without limitation.” Consistent with this observation, this is what the October 22 notice (again) permits.

This most recent HHS guidance requires providers to report the following specific data elements between January 15, 2021 and February 15, 2021 (when the initial reporting portal opens and closes, respectively):

1. Demographic Information, specifically, the name of the Reporting Entity (at the TIN reporting level; may include not only the healthcare provider that received PRF payments but also (1) the parent of one or more subsidiary billing TINs that (a) received a General Distribution(s), (b) has providers associated with it that provided diagnoses, testing or care for individuals with possible or actual cases of COVID-19 on or after January 31, 2020, and (c) is an entity that can otherwise attest to the applicable Terms and Conditions for payments received, or (2) any of its subsidiaries, with separate TINs, that received General, but not Targeted, Distributions) as well as the Reporting Entity’s TIN, NPI (optional), Fiscal Year-End Date, and Federal Tax Classification.

2. Healthcare Related Expenses Attributable to the Coronavirus[1] (Not Reimbursed by Other Sources) (in 2020), specifically:

Reporting Entities that have received between $10,000 and $499,000 in aggregate PRF payments must report their healthcare related expenses attributable to the coronavirus (net of other reimbursed sources) broken down into (a) G&A expenses and (b) other healthcare related expenses; and

Reporting Entities that have received $500,000 or more in aggregate PRF payments must report their healthcare related expenses attributable to the coronavirus (net of other reimbursed sources) again broken down into (a) G&A expenses and (b) other healthcare related expenses, but also further broken down into:

The following G&A expenses: mortgage/rent, insurance, personnel, fringe benefits, lease payments, utilities/operations, and “[c]osts not captured [in the identified expenses] that are generally considered part of overhead structure”; and

The following healthcare related expenses: supplies, equipment, information technology, facilities and “[a]ny other actual expenses, not otherwise captured, that were paid to prevent, prepare for, or respond to the coronavirus”.

3. Lost Revenues Attributable to the Coronavirus,[2] specifically, all Reporting Entities that have received more than $10,000 in aggregate PRF payments must report:

Total Revenue/Net Charges from Patient Care Related Sources (net of uncollectible patient service revenue recognized as bad debts and prior to netting with expenses) broken down into:

Actual Revenue/Net Charges received from the following Patient Care Payers in 2019 and 2020: Medicare Part A+B; Medicare Part C; Medicaid; Commercial Insurance; Self-Pay (no insurance); and “actual gross revenues/net charges from other sources received for patient care services and not included in the list above for the [applicable] calendar year”; and

Other Assistance Received from the following sources in 2020 alone: Treasury, Small Business Administration (SBA) and the CARES Act/Paycheck Protection Program (PPP); FEMA CARES Act; CARES Act Testing; Local, State, and Tribal Government Assistance; Business Insurance; and the “total amount of other federal and/or coronavirus-related assistance received by the recipient and the other TINs included in its report as of the reporting period end date”.

Total Calendar Year Expenses, broken down by calendar year quarters into:

General and Administrative Expenses in 2019 and 2020, including monthly payments related to mortgage or rent for the facility where the Reporting Entity provides patient care services; other monthly finance charges for real property and/or property taxes; insurance premiums for property; employee health insurance; malpractice insurance; overhead salaries; healthcare and contractor salaries; fringe benefits; lease payments; lighting, cooling/ventilation, cleaning, vendor services purchased from third party vendors; consulting support; legal fees; audit and accounting services; food preparation and supplies; logistics and transport; and other costs not otherwise captured, such as debt financing, for the relevant calendar year; and

Healthcare Related Expenses in 2019 and 2020, including supplies, equipment, IT, facilities, employees, and other healthcare related costs/expenses for relevant calendar year.

Note: PRF payments may again be applied toward lost revenue up to the amount of the difference between the recipient’s 2019 and 2020 actual patient care revenue. If recipients do not expend PRF payments 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 coronavirus but not reimbursed by other sources, or to apply toward lost revenues in an amount not to exceed the difference between 2019 and 2021 actual revenue. In this case, recipients 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 – March 30, 2021, or if applicable, January 1–June 30, 2021, and the applicable reporting period will then be compared to the same period in 2019.

4. Additional non-financial data (per quarter), specifically, (a) facility, staffing and patient care information, (b) change in ownership information, and (c) single audit status.

Many recipients accepted PRF CARES Act grants with the understanding that they would be able to use “any reasonable method” to calculate the amount of lost revenue they have suffered as a result of the pandemic, as an earlier guidance stated.  HHS’s October 22 guidance is a return, generally, to this approach.  All things considered, this is not likely to be the final word on this subject.  Healthcare providers would be well advised to be on the lookout for additional agency guidance as the PRF February 15, 2021, reporting deadline approaches.


[1] HHS defines “healthcare related expenses attributable to the coronavirus” to include expenses “incurred both in treating confirmed or suspected cases of coronavirus, preparing for possible or actual coronavirus cases, maintaining healthcare delivery capacity, etc.”.

[2] HHS now defines “lost revenues attributable to the coronavirus” as a negative change in year-over-year actual revenue from patient care related sources, net of the healthcare related expenses attributable to the coronavirus described in the preceding section.   HHS, in turn, defines “patient care” as “health care, services and support, as provided in a medical setting, at home, or in the community,” excluding “(1) insurance, retail, or real estate values (except for SNFs [and assisted living facilities], where that is allowable as a patient care cost), or (2) grants or tuition.”