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UPDATED: On January 15, 2021, HHS Postponed and Further Updated CARES Act Provider Relief Fund Reporting Requirements

HHS recently (1) postponed the deadline for healthcare providers to submit reports on Provider Relief Fund payments that exceed $10,000 in the aggregate and (2) identified additional methods that healthcare providers may utilize to calculate and report “lost revenues attributable to the coronavirus” against which Provider Relief Fund payments may be applied.

In the CARES Act that became law on March 27, 2020, $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,” this $100 billion fund has been supplemented with an additional $75 billion pursuant to the Paycheck Protection Program and Health Care Enhancement Act and another $3 billion pursuant to the recently-enacted Coronavirus Response and Relief Supplemental Appropriations Act of 2021 (the “2021 Coronavirus Appropriations Act”). The stated purpose of the Provider Relief Fund (PRF) 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. 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.

PRF Payment Reporting Deadline Postponed

On January 15, 2021, noting that the 2021 Coronavirus Appropriations Act includes language concerning PRF payment reporting requirements, HHS postponed the deadline for submission of PRF payment reports to a date to be announced in the future (but encouraged healthcare providers to register for gateway access to the reporting portal that will be ultimately be used by applicable healthcare providers).

PRF Payment Reporting Requirements Updated

Also on January 15, 2021, HHS issued its most recent notice detailing the post-payment reporting requirements applicable to 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 “other healthcare related expenses”; and

2. patient care lost revenues attributable to the coronavirus.

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 on September 19, 2020, changed the meaning of  lost revenue to: “a negative change in year-over-year net patient care operating income.” Responding to a significant backlash among policymakers and providers, on October 22, 2020, HHS reversed course and again permitted providers “to apply [PRF payments] against all revenues without limitation.” Most recently, in its January 15, 2021 notice, HHS has detailed three separate methods that providers may now utilize to calculate lost revenues against which they may apply PRF payments.

Alternate Methods of Calculating Lost Revenues Identified

PRF recipients may now calculate patient care lost revenues attributable to the coronavirus utilizing one of the following three methods:

1. the difference between their 2019 and 2020 actual patient care revenue;

2. the difference between their 2020 budgeted and 2020 actual patient care revenue; or

Note that if recipients elect to use 2020 budgeted patient care revenue to calculate lost revenue, they must use a budget that was established and approved prior to March 27, 2020, and will be required to submit additional documentation (which has not yet been detailed) at the time they submit their reports.

3. any reasonable method of estimating revenue.

Note that if a recipient wishes to use an alternate reasonable methodology to calculate lost revenue, (i) the recipient faces an increased likelihood of an audit by the Health Resources & Services Administration (HRSA), (ii) HRSA will notify the recipient if its proposed methodology is not reasonable, including because it does not establish with a reasonable certainty that claimed lost revenues were caused by coronavirus, and (iii) if HRSA determines that a recipient’s proposed alternate methodology is not reasonable, the recipient will be required to resubmit its report within 30 days of notification using either 2019 calendar year actual revenue or 2020 calendar year budgeted revenue to calculate lost revenues attributable to the coronavirus.

Data Elements To Be Reported Further Detailed

The January 15, 2021 notice requires providers to report the following specific data elements:

1. Demographic Information, specifically, the name of the Reporting Entity (identified in accordance with the following chart) as well as the Reporting Entity’s TIN, NPI (optional), Fiscal Year-End Date, and Federal Tax Classification.

Type of PRF recipient(s) Reporting Entity
General Distribution recipient that received payment in Phase 1 only Entity that received Phase 1 General Distribution payments totaling more than $10,000 in aggregate
General Distribution with no parent organization or subsidiaries except PRF recipients that received Phase 1 General Distributions only Entity (at the Tax Identification Number (TIN) level) that received one or more General Distribution payments totaling more than $10,000 in aggregate
General Distribution recipient with one or more subsidiaries that received payments in Phases 1-3 Entity that meets the following three criteria: (1) is the parent of one or more subsidiary billing TINs that received General Distribution payments in Phases 1-3; (2) has providers associated with it that were providing diagnoses, testing, or care for individuals with possible or actual cases of COVID-19 on or after January 31, 2020; and (3) is an entity that can otherwise attest to the applicable Terms and Conditions.
Targeted Distribution recipient Entity (at the Tax Identification Number (TIN) level) that received Targeted Distribution payments totaling more than $10,000 in aggregate

Note that if a parent organization has subsidiary TINs that either received General Distribution payments directly from HRSA or which were transferred to them by the parent organization, the parent entity may report on the use of the General Distribution payments (a) regardless of whether the parent or the subsidiary attested to accepting the payments and (b) the entity reporting on the funds then becomes the Reporting Entity. Note also that regardless of whether the parent or a subsidiary originally received a Targeted Distribution payment and regardless of whether the original recipient subsequently transferred this payment, the original Targeted Distribution recipient is the Reporting Entity and must report on the use of the Targeted Distribution payment.

2. Additional Provider Payment Information, specifically, the dollar amount of any interest earned on a PRF payment.

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

Reporting Entities that have received between $10,001 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”.

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

Total Revenue/Net Charges from Patient Care[2] 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 2020 (by quarter): 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 calendar year”;

Additional Revenue Information, depending on which of the three permissible methods the Reporting Entity utilizes to calculate lost revenue attributable to the coronavirus, specifically:

a. If calculating lost revenues as the difference between 2019 and 2020 actual patient care revenue, the Reporting Entity must also submit actual revenue/net charges received from the following patient care payers in 2019 (by quarter): 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 calendar year”.

b. If calculating lost revenues as the difference between 2020 budgeted and 2020 actual patient care revenue, the Reporting Entity must also submit (i) the 2020 budgeted amount of patient care revenue, (ii) a copy of the 2020 budget, which must have been approved before March 27, 2020, and (iii)an attestation from the Reporting Entity’s Chief Executive Officer, Chief Financial Officer, or similar responsible individual, attesting under 18 USC § 1001 that the exact budget being submitted was established and approved prior to March 27, 2020.

c. If calculating lost revenues using an alternate methodology, the Reporting Entity must also submit a description of the methodology, a calculation of lost revenues attributable to the coronavirus using that methodology, an explanation of why the methodology is reasonable, and a description establishing how lost revenue was in fact a loss attributable to the coronavirus as opposed to a loss caused by any other source.

5. Additional Data, specifically: (a) 2020 facility, staffing and patient care metrics (by quarter); (b) change in ownership information (if applicable); (c) other assistance received from the following sources: Treasury, Small Business Administration (SBA) and Paycheck Protection Program (PPP) Assistance; FEMA Assistance; 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”; (d) information concerning the transfer of Targeted Distributions (if applicable); and (e) single audit status (if subject to single audit requirements pursuant to 45 CFR 75.501).

PRF Payments May Be Utilized In 2021

Note: 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 the coronavirus but not reimbursed by other sources and/or lost revenues in an amount not to exceed the difference between (1) 2019 Quarter 1 to Quarter 2 and 2021 Quarter 1 and Quarter 2 actual revenue or (2) 2020 Quarter 1 to Quarter 2 budgeted revenue and 2021 Quarter 1 to Quarter 2 actual revenue. Further, 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 from January 1 – June 30, 2021.

Conclusion

PRF recipients now have additional time to gather, and greater detail concerning, the information they will need to report in connection with their use of PRF payments. PRF recipients that have received aggregate PRF payments that exceed $10,000 are encouraged to establish in the near term a reporting account by registering at the newly enabled PRF reporting website. Applicable healthcare providers should also be on the lookout for HHS’ announcement of the new submission deadline for PRF payment reports as well as any additional agency guidance concerning such reports issued by HHS in the interim.


[1] Healthcare related expenses attributable to the coronavirus are limited to costs incurred to prevent, prepare for, and/or to respond to coronavirus.

[2] HHS 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 unrelated to patient care.”