Provider Relief Fund: Important Announcement and Additional Delay
The Provider Relief Fund, as part of the CARES Act, was an important stopgap for many health care providers across the country, but details on reporting requirements and timing have been elusive.
It goes without saying that the Provider Relief Fund (PRF), part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act (PL 116-136) and the Paycheck Protection Program (PPP) and Health Care Enhancement Act (PL 116-139), was an important stopgap for many health care providers across the country.
The PRF stood as one of the key tools in the government’s arsenal for propping up the health care industry during what we knew would be a tough year. A number of articles have been written about the program, its numerous derivations and the crooked path toward funding that many out there have experienced. No less crooked than the road to funding, details on reporting requirements and timing have been elusive.
This is beginning to change—on September 19, the Department of Health and Human Services (HHS) released a document entitled General and Targeted Distribution; Post-Payment Notice of Reporting Requirements.
In the notice, HHS begins to formulate the reporting requirements that providers should be aware of in anticipation of reporting to HHS how PRF funds were spent, along with the economic circumstances that providers were facing during the pandemic. Interestingly, HHS has again delayed the actual implementation of reporting.
The August 14 update to the initial HHS guidance on reporting stated that reporting would begin in October and would be required for all providers by February 15, 2021. In the most recent notice, HHS kicked the can a bit further down the road, now stating that reporting functionality will not be available until the first quarter of 2021 at the earliest.
It is important to point out that the notice is not intended to provide a detailed framework for reporting or specific instructions on how to do so. Instead, the notice appears to have been published to put providers on notice of the categories of data points and elements that will be necessary for reporting.
Further, the notice sets forth that these data points and information will need to include information from fiscal year 2019, an element that had not been made explicitly public to date. Although the requirement that 2019 data be produced is unsurprising given the need for HHS to collect baseline data, it is not necessarily something that providers were expecting.
There is an academic argument to be made that a single year’s worth of data is a poor baseline, but this will likely only be important if HHS determines there should be some consequences for providers that fiscally performed better in 2020 than 2019. This does not appear likely nor consistent with Congressional intent, so a requirement for several years of data points is not likely to be necessary.
Although this article is not intended to exhaustively explore all of the reporting requirements and the associated implications, a few of the high points are detailed below. Providers should familiarize themselves with the full notice by clicking here.
The notice initially sets forth 2 broad categories that must be reported by entities:
- Health care-related expenses that the entity may attribute to the pandemic that have not been reimbursed from other sources—these expenses can include general and administrative expenses as well as actual health care operating expenses.
- The second bucket of amounts to be reported includes losses in net patient care operating revenue from 2019 to 2020 that will be calculated as patient care revenue less patient care related expenses for the 2 fiscal years. This is unexpected as previous guidance on this topic focused solely on lost revenue. This distinction could be meaningful for some providers.
In the notice, HHS does include an additional 6-month period, through the end of June 2021, for providers to expend PRF funds consistent with the formulas described above if the provider has not used all funds by the end of 2020. If any funds remain after 2020, providers will be required to submit a second and final report to HHS on the use of funds by July 31, 2021.
Although there is not explicit language regarding repayment of unused PRF funds at this time, that concept does seem implicit in the notice. We expect more guidance on this topic at a later time, though we acknowledge that the vast majority of readers have likely long since expended all PRF funds in a manner consistent with the standards above.
On a more detailed basis, HHS also provided a list of specific data elements that will be required when reporting, these elements are briefly listed below:
- Demographic Information
- The name of the reporting entity Tax identification number National provider identifier (optional) Federal tax classification
- Expenses attributable to Coronavirus not reimbursed by other sources (2020 only)
- These expenses can include expenses incurred in treating confirmed or suspected coronavirus cases, preparing for actual or possible coronavirus cases, maintaining health care delivery capacity, etc. Obviously, this is a fairly expansive definition and would appear to include a host of expenses that were undertaken during the pandemic. HHS also includes 2 classes of reporting requirements based on the amounts of PRF funds received. Those entities receiving between $10,000 and $499,999 in funds will provide general information and those receiving $500,000 plus in funds will be subject to more detailed and rigorous reporting requirements. The notice incudes additional subcategories of information required from those receiving $500,000 plus in funds, but until full reporting requirements are available, we will not analyze these lists.
- Lost revenue attributable to coronavirus
- HHS is seeking information about negative changes in year-over-year net operating income from patient care related sources. The revenues and expenses in this section are to include all lost patient care revenues and patient care cost/expense impacts. Entities should be prepared to report revenue with a breakdown by payer mix and all pandemic-related funding received by the entity, including funds from any federal, state, local, or other source. Total calendar year expenses will also be reported, with quarterly breakdowns, broken into general and administrative expenses and health care-related expenses.
- Additional non-financial data will also be reported, including:
- Facility, staffing, and patient care numbers, such as staffing and patient metrics. Any change of ownership during the reporting periods will need to be reported.
- Entities that expended more the $750,000 in aggregated federal financial assistance in 2020 are subject to single audit requirements as set forth in 45 CFR 75.501.
Although we do not yet have all of the information required for entities to prepare to submit reports regarding the use of PRF funds, we do have much more information than was previously available. For now, the best advice is to begin preparing the information noted above, but do not panic—the only constant during this entire pandemic has been change. Expect more but prepare as you can.
Jeffrey S. Baird, JD, is Chairman of the Health Care Group at Brown & Fortunato, PC, 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. Baird is Board Certified in Health Law by the Texas Board of Legal Specialization, and can be reached at (806) 345-6320 or firstname.lastname@example.org.
Kelly T. Custer, JD, is an attorney with the Health Care Group at Brown & Fortunato, PC, 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 email@example.com.