HRSA PRF Period 2 reporting: Should you change your methodology?
In January 2022, Health Resources & Services Administration (HRSA) released several new resources for healthcare providers to assist with the second round of reporting, including reporting portal updates and methodology for calculating lost revenues and the PRF Lost Revenues Guide.
The portal updates/methodology document indicates that returning reporting entities may change the methodology for calculating lost revenues used in their Period 1 portal submission to one of the other lost revenue methods described in the lost revenue guide. HRSA issued several FAQs on Jan. 27, 2022, to further clarify the impact to reporting entities.
Here’s several important considerations if you’re thinking about a change to your methodology:
- Changes affect the entirety of the reporting period: The new methodology to calculate lost revenue methodology must be used for the entire Reporting Period 2 period of availability (Jan. 1, 2020 to Dec. 31, 2021).
- Reporting period overlap could impact previously reported unreimbursed lost revenues: The period of availability for Reporting Period 2 (Jan. 1, 2020 to June 30, 2021) overlaps the period of availability for Reporting Period 1 (Jan. 1 to Dec. 31, 2020). As such, if a reporting entity changes the methodology used to calculate lost revenues, the system will recalculate the total lost revenues for the entire period of availability, potentially affecting the previously reported unreimbursed lost revenues. If the change in method results in an increase to previously reported lost revenues, the amount of unapplied lost revenue carried forward to future reporting periods would increase. However, a change in method that results in a decrease to previously reported lost revenue could require entities to repay Period 1 funds that were previously offset.
- A change in method requires additional documentation in the portal: If changes are made to previously submitted data, providers are required to submit a written justification to support and explain the changes in lost revenues methodology.
Additional Period 2 reporting guidance: Infection control targeted distributions
Period 2 is also the first period in which infection control targeted distributions will be reported. It’s important to note that infection control dollars may only be used to offset eligible expenses and can’t be used to offset lost revenue. In addition, the infection control targeted distributions were accompanied by terms and conditions, which are significantly different from those attested to with other general and targeted distributions. Reporting entities should review these terms and conditions in relation to their operations to determine what may qualify as eligible infection control expenditures.
Healthcare providers should carefully analyze how funding in previous reporting periods will be impacted before electing to make any change in their lost revenue methodology to ensure they’re able to retain as much of the received PRF payments as possible. For help determining the impact to your organization, don’t hesitate to contact us.