On November 23, 2021, the Health Resources and Services Administration (HRSA) began distributing American Rescue Plan (ARP) Rural payments.  The $8.5 billion ARP Rural distribution is based on the number of services providers furnish to Medicaid/CHIP and Medicare beneficiaries living in Federal Office of Rural Health Policy (FORHP)-defined rural areas. The vast majority, approximately 96%, of ARP Rural applications have now been processed. The 4% of applications not processed represent $1.1 billion or 13% of the total ARP Rural distributions.

Applicants receiving payments will receive both an email notification as well as a paper letter with additional detail on their aggregate payment, including individual payment amount(s) for any eligible subsidiary billing TINs included in their application. Providers who have not yet received any communication regarding their payment determination will be notified as soon as the Health Resources & Services Administration (HRSA) completes the review and processing of the remaining applications.

To ensure transparency, the U.S. Department of Health and Human Services (HHS) published a public dataset with the names, locations (by city, state, and zip code), and payment amount of all ARP Rural payment recipients at the applicable subsidiary or billing TIN level of ARP Rural payments to date. For more information on how payments are calculated, please consult the payment methodology webpage.

Phase 4 General Distribution is still to come:

The ARP Rural Payment does not include the Phase 4 General Distribution from the Provider Relief Fund (PRF) that was applied for in the same application.  HRSA expects to begin releasing PRF Phase 4 payments in December 2021 continue into January 2022.  Similar to the ARP Rural payments, HRSA plans to send individual communications to providers when final payment determinations are made.   As a reminder, Phase 4 is another $17 billion and will be based on providers’ lost revenues and changes in operating expenses from July 1, 2020, to March 31, 2021. HRSA will reimburse a higher percentage of lost revenues and expenses for smaller providers as compared to larger providers and provide “bonus” payments based on the number of services they provide to Medicaid, CHIP, and Medicare patients, priced at the generally higher Medicare rates.

Here are some common questions we are getting from our clients:

Why am I not on the ARP Rural Payment list?

Most likely, if you did not receive a denial, then your application has not yet been processed.   Be sure that you received the confirmation email from DocuSign that your application was submitted and login to the portal and check your application status.   The “Revenue and Tax Information” icon will show “Available Now Get Started” until your submission is processed and payment determination is made. Providers with questions about the Phase 4 and ARP Rural application process should contact the Provider Support Line at 866-569-3522.

I am on the ARP Rural Payment list but I didn’t get my payment?

Most likely, you have not yet filed your Period 1 Provider Relief Fund reporting or you need to create an Optum Pay account.  HRSA will not release your ARP Rural payment until you have met your Period 1 PRF reporting requirements.  As a reminder, the Grace Period for Period 1 PRF Reporting expires November 30, 2021, and there are no further extensions.

Can I transfer the ARP Rural Distribution to a related facility?

No, unlike prior distributions, the ARP Rural cannot be transferred according to this PRF Frequently Asked Question:

Can an applicant allocate ARP Rural payments to its non-rural subsidiaries? (Added 9/29/2021)

No. As required by the Terms and Conditions, control and use of the ARP Rural payment must be delegated to the provider associated with the billing TIN that was eligible for the ARP Rural payment. The provider cannot transfer or allocate the ARP Rural payment to another entity not associated with the billing TIN.

What are the allowable uses of the ARP Rural distribution and what period do I have to spend them?

The allowable uses are the same as the general and targeted distributions. Providers may use these payments to cover eligible healthcare-related expenses or lost revenues that are attributable to coronavirus incurred between January 1, 2020 and the end of the applicable period of availability, which for ARP Rural payments received in the 4th Quarter 2021 is December 31, 2022.

Will I need to attest to this payment like the others?

Yes. Within 90 days of receiving a payment, recipients must sign an attestation confirming receipt of the funds and agreeing to the Terms and Conditions of payment by re-entering the Provider Relief Fund Application and Attestation Portal. Should a recipient choose to reject the funds, they must also complete the attestation to indicate this and return the funds within 15 calendar days.

Additional resources and information can be found on the HRSA website.

We will keep you posted as more is known. HW&Co. is here to assist you in any way we can. Please visit the HW&Co. COVID-19 resource center on our website for additional resources or contact your HW Healthcare Advisor if you need assistance.

Disclaimer:  Information in this article is subject to change and is based upon our current understanding as of the issue date. This is a constantly evolving process as HHS has been issuing new or changed guidance on a frequent basis.

Paula Z.Reape, CPA, LNHA
Principal
paula.reape@hwco.cpa