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HHS updates CARES Act Provider Relief Fund reporting requirements

November 5, 2020 Article 2 min read
Dawn Stark Josh Richards

Updated guidance on reporting requirements redefines major calculations for healthcare organizations that have received CARES Act Provider Relief Fund (PRF) distributions. Here's what you need to know.

Businessman working from home sitting at his kitchen table using a laptop computer.On Oct. 22, 2020, the U.S. Department of Health and Human Services (HHS) issued revised guidance updating the reporting requirements for recipients of PRF distributions, specifically revising the lost revenue calculation methodology.

The update stems from feedback by many stakeholders and members of congress to guidance issued on Sept. 19, 2020, restricting certain PRF distributions if they made providers more profitable than they were before the pandemic. In its October 22 update policy memorandum, the HHS responded by amending the guidance to allow a provider to apply PRF payments against all “patient care lost revenues.”

Since the revised guidance was issued on Oct. 22, 2020, HHS has substantially revised its Provider Relief Funds Frequently Asked Questions (FAQs) Document by adding or modifying 62 FAQs and deleting 78 FAQs between Oct. 28, 2020 and Nov. 2, 2020. 

What does this mean to you?

Under the revised guidance, lost revenue is defined as the “negative change in year-over-year actual revenue from patient care related sources,” measured on a calendar year basis between 2019 and 2020. This could result in recipients of funding being able to record additional PRF funds than previously calculated under the guidance issued on Sept. 19, 2020.

The definition of reporting entity has also been clarified as: An “entity (at the tax identification number (TIN) level) that received one or more PRF payments, or an entity that meets the following 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.” This clarification will potentially allow organizations to reallocate funding to subsidiaries that may have required more funding then initially received.

The latest HHS FAQ document provides additional details on which expenses qualify as healthcare expenses related to coronavirus and includes example calculations for estimating the amount of expenses not reimbursed by other sources. Perhaps the most significant change was issued in a FAQ on Nov. 2, 2020, which modified the amount of Provider Relief Fund payments applied to patient care lost revenue to no longer be reported net of healthcare related expenses attributable to coronavirus calculated in Step 1. 

What action should you take?

  • Read the updated guidance in its entirety to gain a thorough understanding of the Oct. 22, 2020 reporting requirements and the impact they have on your organization.
  • Reevaluate your calculations of expenses attributed to coronavirus or lost revenue to determine whether changes are needed to earlier estimates. If so, reassess the effects on your financial statements or other reporting requirements.
  • Read the HHS FAQ document for additional guidance issued to assist your organization’s application of the Oct. 22, 2020 guidance. 
  • Watch for future guidance issued by HHS as the Feb. 15, 2021 reporting deadline approaches.

Our PRF reporting requirements webinar

We encourage you to watch our on-demand webinar on recent updates to the PRF guidance. As you navigate the complexities of PRF funding, we’re here to help. Don’t hesitate to reach out.

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