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September 23, 2020 Article 3 min read

The U.S. Department of Health and Human Services has issued guidance on Provider Relief Fund reporting requirements for healthcare providers who received PRF payments over $10,000. We share key takeaways and next steps.

Elderly woman wearing a stethoscope while using a desktop computer.On Sept. 19, 2020, the U.S. Department of Health and Human Services (HHS) issued long-awaited guidance on Provider Relief Fund (PRF) reporting requirements for healthcare providers who received one or more PRF payments exceeding $10,000 in the aggregate. We encourage you to read the guidance in its entirety for a thorough understanding of the requirements. We also offer key takeaways for your consideration.

Guidance on reporting the use of funds

A recipient’s use of funds will need to be reported by submitting the following information:

  1. Healthcare-related expenses related to the coronavirus that haven’t been reimbursed by another source (or for which another source isn’t obligated to reimburse) or healthcare-related operating expenses.
  2. PRF payment amounts not fully expended on healthcare-related expenses attributable to coronavirus are then applied to lost revenues, represented as a negative change in year-over-year net patient care operating income, net of the healthcare-related expenses attributable to coronavirus calculated per item 1, above. Recipients may apply PRF payments toward lost revenue, up to the amount of their 2019 net gain from healthcare-related sources. Recipients who reported negative net operating income from patient care in 2019 may apply PRF amounts to lost revenues up to a net zero gain or loss in 2020.

Recipients may apply PRF payments toward lost revenue, up to the amount of their 2019 net gain from healthcare-related sources.

The HHS frequently asked questions indicated that recipients could use any reasonable method of estimating lost revenue, including comparing budgeted revenue to actual revenue. The reporting guidance now, however, prescribes a narrower approach to calculating lost revenue.

The reporting guidance now, however, prescribes a narrower approach to calculating lost revenue. 

  • If recipients don’t expend PRF funds in full by the end of calendar year 2020, recipients will have an additional six months in which to use remaining amounts toward expenses attributable to coronavirus, or to apply toward lost revenues in an amount not to exceed the 2019 net gain. Funds reimbursed by other sources are not eligible.
  • Lost revenues attributable to the coronavirus will be calculated based on calendar year 2019 and 2020.

General reporting requirements

  • Expenses and revenues must be reported within the portal in quarterly amounts, based on a calendar year.
  • Entities that received between $10,000 and $499,999 in aggregated PRF funding are required to report healthcare-related expenses in two aggregated categories: (1) G&A expenses and (2) other healthcare-related expenses. These are the actual expenses incurred over and above what has been reimbursed by other sources.
  • Recipients who received $500,000 or more in PRF payments are required to report healthcare expenses in further detail to support the amounts recorded within G&A expenses and other healthcare expenses.

Reporting timing

The reporting portal won’t be available until early 2021, according to the HHS website. As a reminder, the reporting requirements for the PRF funds are due by Feb. 15, 2021 (for funds expended through Dec. 31, 2020). For funds expended after Dec. 31, 2020, organizations will have until July 31, 2021, to report.

Now that guidance has been provided, what should you do next?

Since the guidance for calculating lost revenue has been clarified, we again encourage you to read the guidance in its entirety to gain a full understanding of the requirements.

Additionally, we encourage you to reevaluate your calculation of lost revenue to determine whether any necessary changes need to be made. If changes are required, we encourage you to reassess the effects on your financial statements or other reporting requirements.

Stay tuned for updated FAQs from the Health Resources and Services Administration (HRSA) and for the dates of HRSA’s webinars that will address questions and answers prior to the submission deadlines.

As you navigate the complexities of PRF funding, we’re here to help. Don’t hesitate to reach out.

We’re here to help. Visit our COVID-19 healthcare resource center.

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