On October 22, 2020, the Department of Health and Human Services (HHS) issued a policy memo revising its guidance for reporting on Provider Relief Funds received by healthcare providers over the previous six months. In response to concerns voiced by various provider associations and members of Congress, HHS updated its guidance on lost revenues attributable to Coronavirus to allow providers to report lost revenues up to the negative change in year-over-year patient care revenues. HHS’s previous guidance, released in September, limited allowable lost revenues to the change in a provider’s net operating income from 2019 to 2020, which many industry experts, including HW&Co., felt would harm providers.
A review of the updated reporting requirements shows the following revisions:
- Lost revenues will be allowed “up to the amount of the difference between their 2019 and 2020 actual patient care revenue.” Revenues will be reported on a quarterly basis for 2019 and 2020.
- Revises the definition of the “reporting entity” as follows (italicized text is new):
- “Entity (at the TIN level) that received one or more PRF payments, or an entity that meets the following three criteria: 1) is the parent of one or more subsidiary billing TINs that received General Distribution payments, 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 Terms and Conditions.“
- Clarifies providers will use “their normal method of accounting (cash or accrual)”
- Clarifies reporting for the first and second quarters of 2021 (currently due July 31, 2021) will compare 2021 to 2019 revenues for the applicable quarters.
The updated guidance does not make any substantial changes to the requirements for reporting of COVID-19 related expenses or non-financial metrics (facility, staffing and patient care), nor does it make any changes to the previously stated reporting deadlines. As a reminder, HHS’s current guidance requires all providers to report Provider Relief Funds expended in calendar year 2020 by February 15, 2021.
Provider relief reporting will be a significant undertaking for all healthcare providers. We look forward to assisting providers in completing their reporting and are available to assist and answer any questions you may have.
Phase 3 Reporting Deadline Reminder
In early October, HHS announced a $20 billion Phase 3 of the Provider Relief Fund (PRF) General Distribution. Eligible providers include those who have previously received, rejected or accepted a General Distribution PRF payment, as well as behavioral health providers and new providers that began practicing between January 1, 2020 and March 31, 2020. Please see our previous articles regarding eligibility and payment methodology and the application process.
The application deadline is Friday, November 6, 2020. With the payment methodology requiring a pro-rata calculation, it is unlikely the deadline will be extended. The application requires providers to validate their tax identification numbers before proceeding to the application, a process which can take time in some situations. Therefore, we recommend you begin the application process as soon as possible. We are available to assist and answer any questions you may have in applying for Phase 3.
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.
