The October 26, 2021 application deadline for Provider Relief Fund (PRF) Phase 4 and American Rescue Plan (ARP) Rural Payments is quickly approaching with only two weeks to go.  Phase 4 includes $25.5 billion of new funding for COVID-19 affected healthcare providers.  The funding will be split between a $17 billion general distribution and an $8.5 billion distribution targeted to entities providing services to beneficiaries in rural locations.  The general distribution will be determined based on eligible quarterly lost revenues and increased expenses from the third and fourth quarters of 2020 and first quarter of 2021, as well as bonus payments based on providers’ Medicare, Medicaid, and CHIP utilization.

Providers can apply via the Provider Relief Fund Application and Attestation Portal.  The application covers both the general and rural distributions. The funding is not “first come, first serve” as all applications must be gathered to determine the total of eligible lost revenues and increased expenses.  However, we highly recommend you begin the application process as soon as possible, as the first step is validation of your tax ID number (TIN), which could take several days.  At this time, we do not foresee any extensions beyond the October 26, 2021 deadline.

The Health Resources & Services Administration (HRSA), the federal entity now charged with governing the Provider Relief Fund, has developed a website with instructions, FAQs, and sample documentation for use during the application process.  The website also includes registration links for upcoming webinars, as well as recorded webcasts of previous webinars.

We have heard from many clients in the past few weeks asking questions about the application process.  A few of these questions include:

  • Who is eligible for the general distribution?
    • All healthcare providers or suppliers who bill Medicare or Medicaid fee-for-service (including managed care), as well as state-licensed assisted living facilities, behavioral health providers, and many others. Providers generally must have been providing services and in operation as of December 31, 2020 in order to be eligible to apply.
  • We don’t think we’re eligible since we don’t have lost revenue or increased expenses in these three quarters. Should we apply?
    • Yes, you should apply if you are an eligible healthcare provider. We believe it is better to apply and have HRSA determine you are not eligible rather than make that decision without applying.  In addition, 25% of the $17 billion general distribution will be paid based on the amount and type of services provided to Medicare, Medicaid, and CHIP beneficiaries, so providers without lost revenues or increased expenses may still receive some general distribution funding.
    • The ARP rural funding is based on the beneficiary’s location, so facilities without lost revenues and increased expenses may still receive some funding from the rural distribution, but those funds are only available if you apply. HRSA requires the applicant only to check a box to be eligible for the rural distribution, so there are no calculations or address searches you need to do.  HRSA will do all of the work to determine eligibility for, and payment of the rural distribution.
  • How much will we receive?
    • At this point, it is not possible to determine what an individual provider will receive, as HRSA will need to gather all applications and determine the amount of funding available for each dollar of lost revenues or increased expenses. In Phase 3, eligible providers received $.88 for each dollar of lost revenues or increased expenses.  For Phase 4, we expect that amount to be lower, as the general distribution pool is smaller ($24.5 billion for Phase 3 vs. $17 billion for Phase 4). Phase 4 is looking at an additional quarter of data and more providers are struggling for cash flows at this time compared to the Phase 3 application period in October 2020.
  • I am a consolidated tax filer. Do I have to apply on a consolidated basis or can I apply for each individual provider under my parent TIN?
    • The guidance at this time is, unfortunately, somewhat unclear. One of HRSA’s FAQs indicates most consolidated tax filers must apply on a consolidated basis. However, a different FAQ indicates parent organizations can file a separate application for each subsidiary TIN if the parent would like each subsidiary to receive its own payment. We currently believe individual subsidiary TINs can file using the parent’s consolidated tax return by providing supplementary documentation showing the subsidiary’s revenues are rolled up into the parent tax return.  HRSA’s upcoming webinars will cover supporting documentation, so we hope their guidance is clarified at that time.
  • How should I determine my quarterly revenues?
    • The quarterly revenues should be your patient service revenues (net of all contractual adjustments) less bad debts recorded during the quarter. You should not include contribution revenue or investment gains.
  • What expenses are eligible to be included on the application?
    • The application asks for “operating expenses related to patient care” including salaries and benefits, supplies, professional services, administrative, depreciation, interest, and all other expenses related to patient care. You should not include expenses such as charitable contributions, investment fees, and losses, or bad debts (as they are to be netted against your quarterly revenues).

As an additional reminder…

We are currently in the 60-day grace period for PRF Reporting Period 1.  Providers who received funding between April 2020 and June 2020 must report their lost revenues and COVID-related expenses by November 30, 2021, when the grace period expires.  Providers who do not report by the deadline are at risk of paying all funds received between April 2020 and June 2020 back to the federal government.

Please contact us if you have any questions or need any assistance with the Phase 4 application or Reporting Period 1 submission.


Our team consists not only of CPAs, but also highly trained and experienced billing/revenue cycle consultants, certified medical office managers, and LNHAs.  We are dedicated to working with the regulatory, operational, and reimbursement challenges that providers face in an ever-changing healthcare environment.

We can assist you in streamlining your processes, optimizing your operations, and identifying potential opportunities and risks.  Please contact any of our HW Healthcare Advisors to discuss how we can help you and your facility stay on the path to success.

Steve Anderson CPA