On September 10, 2021, the U.S. Department of Health & Human Services (HHS) announced several Provider Relief Fund (PRF) updates. We’ve summarized some of these updates below.
Sixty-Day Grace Period
HHS announced a welcome reprieve related to the September 30, 2021, due date for providers to report on the usage of the funds in the first PRF Reporting Period. Specifically, HHS will provide a 60-day grace period to help providers comply with their PRF Reporting requirements if they fail to meet the September 30, 2021, deadline. According to HHS, while the deadlines to use funds and the Reporting Period will not change, HHS will not initiate collection activities or similar enforcement actions for noncompliant providers during this grace period.
In addition to this announcement, the Health Resources & Services Administration (HRSA) posted other important details regarding the grace period on its website. Some details include:
- While you will be out of compliance if you do not submit your report by September 30, 2021, recoupment or other enforcement actions will not be initiated during the 60-day grace period.
- The grace period begins on October 1, 2021, and ends on November 30, 2021.
- Providers that are able are strongly encouraged to complete their report in the PRF Reporting Portal by September 30, 2021.
- Providers should return unused funds as soon as possible after submitting their report. All unused funds must be returned no later than 30 days after the end of the grace period (December 30, 2021).
It is important to reiterate that the grace period only pertains to the Reporting Period 1 submission deadline. There is no change to the period of availability for use of the Reporting Period 1 PRF payments. In addition, as described above, HRSA does indicate providers that are able are strongly encouraged to complete their Period 1 PRF report by September 30, 2021.
Additional $25.5 Billion in COVID-19 Funding
HHS, through HRSA, also announced an additional $25.5 billion in new funding will be made available for healthcare providers affected by the COVID-19 pandemic. According to the HHS news release, this funding includes $8.5 billion in American Rescue Plan (ARP) resources for providers that serve rural Medicaid, Children's Health Insurance Program (CHIP), or Medicare patients, and an additional $17 billion for PRF Phase 4 for a broad range of providers that can document revenue loss and expenses associated with the pandemic.
“This funding critically helps health care providers who have endured demanding workloads and significant financial strains amidst the pandemic,” said HHS Secretary Xavier Becerra. “The funding will be distributed with an eye towards equity, to ensure providers who serve our most vulnerable communities will receive the support they need.”
PRF Phase 4 Payments
HHS indicates this distribution will be based on providers’ lost revenues and expenditures between July 1, 2020, and March 31, 2021. In addition, PRF Phase 4 will reimburse smaller providers—those that tend to operate on thin margins and often serve vulnerable or isolated communities—for their lost revenues and COVID-19 expenses at a higher rate compared to larger providers. PRF Phase 4 also will include bonus payments for providers that serve Medicaid, CHIP, and/or Medicare patients.
ARP Rural Payments
Similarly, HRSA will make ARP rural payments to providers based on the amount of Medicaid, CHIP, and/or Medicare services they provide to patients who live in rural areas as defined by the HHS Federal Office of Rural Health Policy.
According to HHS, in order to expedite and 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 payments. The application portal will open on September 29, 2021. To help ensure these PRFs are used for patient care, PRF recipients will be required to notify the HHS Secretary of any merger with, or acquisition of, another healthcare provider during the period in which they can use the payments. Providers that report a merger or acquisition may be more likely to be audited to confirm their funds were used for COVID-19-related costs, consistent with an overall risk-based audit strategy.
For more information about eligibility requirements, the documents and information providers will need to complete their application, and the application process for PRF Phase 4 and ARP Rural payments, visit the HRSA website.
Attesting PRF Phase 3 Payments
HHS also released a detailed PDF about the methodology used to calculate PRF Phase 3 payments. Providers that believe their PRF Phase 3 payment was not calculated correctly according to this methodology will now have an opportunity to request a reconsideration. According to HHS, further details on the PRF Phase 3 reconsideration process are forthcoming.
For questions, or to discuss PRFs in more depth, please consult your BKD Trusted Advisor™ or submit the Contact Us form below.