HHS Issues Much Anticipated Updates to Provider Relief Fund Deadlines and Reporting Requirements


Pharmacies that received more than $750,000 in federal funds, including funds from the CARES Act Provider Relief Fund, will be subject to single audit requirements.

Pharmacies across the country were pleasantly surprised with the release of updated reporting requirements and deadlines in connection with funds received from the CARES Act Provider Relief Fund (PRF). On June 11, 2021, the Department of Health and Human Services (HHS) issued the revised post-payment notice of reporting requirements that supersedes all prior versions of the notice.

The updated requirements reflect the Health Resources and Services Administration’s focus on giving providers equitable amounts of time for use of these funds, maintaining effective safeguards for taxpayer dollars, and incorporating feedback from providers requesting more flexibility and clarity about PRF reporting.

Summary of Key Updates

  • The period for use of funds is based on the date payment is received rather than requiring all payments to be used by June 30, 2021, regardless of when they were received.
  • Recipients are required to report for each Payment Received Period in which they received one or more payments exceeding $10,000 in the aggregate rather than $10,000 cumulatively across all PRF payments.
  • Recipients have a 90-day period to complete reporting rather than a 30-day reporting period.
  • The PRF Reporting Portal opened for providers to submit information on July 1, 2021.

Timing of Required Use of Funds and Reporting Deadlines

The following deadlines apply to payments received. If the pharmacy received funds during more than one of the periods identified below, you will be required to report the use of the funds in each applicable reporting period—it does not appear that there will be a mechanism to report funds from multiple periods in a single report.

Details of Reporting Requirements

Pharmacies will be required to report the use of funds using their normal accounting basis (i.e., cash, accrual, or modified accrual). The following data points, in relevant part, will be required:

  • Interest earned on PRF payments
    • For pharmacies that held the PRF payment(s) being reported in an interest-bearing account, the dollar value of interest earned on those PRF payment(s) must be reported.
  • Other assistance received by quarter, including:
    • Department of the Treasury or Small Business Administration funding, including from the Paycheck Protection Program
    • FEMA funding
    • HHS CARES Act testing
    • Local, state, and tribal government assistance
    • Business insurance proceeds
    • Other COVID-19 related assistance
  • Use of general and other targeted distribution payments for general expenses, including:
    • Mortgage/rent
    • Insurance
    • Personnel
    • Fringe benefits
    • Lease payments
    • Utilities/operations
    • Other expenses generally considered to be part of general and administrative expenses
  • Other health care related expenses exclusive of general expenses above, including:
    • Supplies related to the pandemic
    • Required equipment
    • IT expenses
    • Facility expenses
    • Other expenses related to prevention, preparation for, and/or response to the pandemic
  • Lost revenues that can be calculated in one of the following three ways:
    • Difference between actual patient care revenues
    • Difference between budgeted patient care revenues (prior to March 27, 2020) and actual revenues
    • Any other reasonable method of estimating revenues

Reporting will also require disclosure of significant additional organizational details. You are encouraged to read the full HHS release and to stay up to date as additional reporting guidance is made available.

Single Audit Requirements

Pharmacies that received more than $750,000 in federal funds, including PRF monies, will be subject to single audit requirements. There are two reporting options:

  • A financial audit of the use of the awards in accordance with Generally Accepted Government Auditing Standards; or
  • An audit in compliance with the Single Audit Act.

More detail about these options and the corresponding reporting requirements will become available in the coming weeks and months.

Significant Step Forward

Although there are still details to be determined, the new reporting requirements and deadlines are clearly a significant step forward. We expect HHS to issue additional FAQs and guidance, and we encourage all pharmacies to monitor the HHS website for updates. For now, the pharmacy should start documenting what it can and prepare to report at the appropriate time.

Pharmacies should review the updated notice and plan for meeting the reporting requirements as deadlines come closer. The pharmacy should create a reporting system that ensures all deadlines are met for each of the reporting periods in which the pharmacy may have received funds.

Further, if the pharmacy has not already categorized its expenses into those that were permitted by the PRF terms and conditions, now is a good time to start that process. Also, the pharmacy should carefully document lost revenues and be prepared for a detailed audit to occur. The pharmacy should retain all records and contemporaneously note any key items or facts that may be relevant in a future audit. Over-documentation is always preferred.

About the Authors

Kelly T. Custer, Esq., is an attorney with the Health Care Group at Brown & Fortunato, a law firm with a national health care practice based in Texas. He represents pharmacies, infusion companies, HME companies and other health care providers throughout the United States. Mr. Custer can be reached at (806) 345-6343 or kcuster@bf-law.com.

Jeffrey S. Baird, Esq., is Chairman of the Health Care Group at Brown & Fortunato, a law firm with a national health care practice based in Texas. He represents pharmacies, infusion companies, HME companies, manufacturers, and other health care providers throughout the United States. Mr. Baird is Board Certified in Health Law by the Texas Board of Legal Specialization and can be reached at (806) 345-6320 or jbaird@bf-law.com.

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