HHS Releases New Deadlines and Reporting Requirements for Provider Relief Funds

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Healthcare Providers Must Submit First Report by February 15, 2021

By Jennifer Allen, CPA

In the first several months of the COVID-19 pandemic, many healthcare providers were forced to close their doors or substantially limit in-person patient exams. Hospitals and surgery centers halted elective procedures. The industry quickly shifted to providing virtual appointments and stocking up on PPE, both of which added to cost pressures.

The CARES Act included provisions for emergency funds to help struggling healthcare providers keep the doors open – a first for many healthcare entities, which many viewed as a recession-proof industry.

Now, the Department of Health & Human Services (HHS) has released new reporting requirements for Provider Relief Fund (PRF) recipients that received $10,000 or more in payments. The Post-Payment Notice of Reporting Requirements was published in September 2020 and updated again in October. HHS’s new reporting system is going to be online and available as of January 15, 2021.

 

Background: HHS Provider Relief Funds in 2020

Earlier this year, we reported that the Healthcare Provider Relief Fund (PRF) had allocated billions of dollars to hospitals and certain healthcare providers across the country as their revenues dipped and offices closed in response to the COVID-19 pandemic. Any healthcare entity that billed Medicare in 2019 was automatically eligible to receive the emergency funds from HHS. Recipients of Provider Relief Funds had to follow certain rules for reporting. 

Then, over the summer, HHS provided yet another safety net for healthcare providers that bill to eligible Medicaid and Children’s Health Insurance Program (CHIP), a means of reaching the remaining entities that weren’t covered under the initial funding. Unlike previous rounds of funding, which were automatic, eligible providers had to apply for funds from the Healthcare Enhancement Act by July 20, 2020.

Deadlines to Report PRF Expenses

Earlier notices from HHS required that PRF recipients agree to Terms & Conditions, including but not limited to filing cost reports, tax returns, and estimated lost revenue. In its latest notice, HHS clarified important deadlines by which healthcare providers must submit information related to their PRF funds and practice.

The reporting system portal opens on January 15, 2021. All healthcare providers that received “one or more payments exceeding $10,000 in the aggregate from the PRF” must adhere to these requirements.

  • Within 45 days of the end of the calendar year, recipients must report their expenditures throughout the period ending December 31, 2020.
  • Healthcare providers that used all PRF prior to December 31, 2020, are permitted to submit a single final report at any time between January 15 and February 15, 2021.
  • If there are remaining PRFs at the end of the year, healthcare providers will have until July 31, 2021, to submit a second and final report.

Providers must include the following information when submitting reports of how they used PRFs.

  • Healthcare-related expenses attributable to COVID-19 not otherwise reimbursed; may include general and administrative costs or operating expenses.
  • Any remaining PRFs are then applied to lost revenues. Lost revenues should be reported as a negative change in year-over-year net patient care operating income, “net of the healthcare expenses attributable to coronavirus.”

Further, the notice states that “Recipients may apply PRF payments toward lost revenue, up to the amount of their 2019 net gain from healthcare-related sources. Recipients that reported negative net operating income from patient care in 2019 may apply PRF amounts to lost revenues up to a net zero gain/loss in 2020.”

Required Demographic Information

Healthcare providers submitting final reports to HHS must include the following information, which HHS and other agencies will use to determine whether funds were used properly.

  • Entity Name
  • Tax Identification Number (TIN)
  • Optional: National Provider Identifier
  • Fiscal Year-End Date
  • Entity Type

Reported Expenses

Beyond the demographic information listed above, healthcare providers must also detail their expenses. As noted, expenses don’t have to be solely attributable to COVID-19. HHS’s threshold for determining what those are include treating actual or suspected COVID-19 patients and expenses related to preparing for the evaluation and care of such patients, maintaining delivery capacity, and so on.

Recipients that received between $10,000 and $499,999 in PRF payments related to COVID-19 should report expenses in two categories: General and Administrative (G&A) Expenses and Other Healthcare-related Expenses. The notice states that these are net expenses “over and above what has been reimbursed by other sources” such as insurance reimbursements, patients, or government entities.

Recipients that received $500,000 or more in PRF payments will need to submit more detailed expense reports. 

Recipients that received $750,000 or more in PRF payments are subject to Single Audit requirements set forth in regulations at 45 CFR 75.501.

G&A expenses related to COVID-19 that must be reported may include:

  • Mortgage/Rent
  • Insurance
  • Personnel
  • Fringe Benefits
  • Lease Payments
  • Utilities/Operations
  • Other G&A Expenses

Healthcare-related expenses related to COVID-19 may include:

  • Supplies
  • Equipment
  • IT Systems
  • Facilities
  • Other Healthcare-related expenses

Lost revenue data points that must be submitted may include:

  • Medicare Part A+B
  • Medicare Part C
  • Medicaid
  • Commercial Insurance
  • Self-Pay/No Insurance
  • Other

Finally, healthcare providers must also indicate in their reports whether they received other types of financial assistance in 2020. Funding sources could include:

  • SBA loans or CARES Act/PPP funds
  • FEMA CARES Act
  • CARES Act Testing
  • Local, State, and Tribal Government Assistance
  • Business Insurance
  • Other

Total calendar year expenses for 2019 and 2020 should be broken down by quarter and presented in aggregate.

Other Reporting Data

Expect that HHS will require additional financial data when providers submit their reports. The September 2020 notice specifically mentioned metrics related to personnel, patients, and the facility.

Healthcare entities that received PRF payments and experience a change in ownership will have to submit additional data to HHS.

For healthcare providers already tasked with the additional burdens of operating during a pandemic, these requirements can seem overwhelming and complicated. Proactive and meticulous reporting throughout the year is key to timely submitting PRF expense reports, so the more that providers stay on top of tracking expenses, the better. Adams Brown has been monitoring HHS notice requirements closely and our Healthcare team, led by Jennifer Allen, CPA, is ready to assist healthcare providers with tracking and submitting necessary HHS reports.