HHS Issues New Guidance on the Mandatory Reporting Requirements for Healthcare Providers That Received Assistance Under the CARES Act Provider Relief Fund

Alerts / October 6, 2020

Earlier this month, the U.S. Department of Health & Human Services (HHS) published updated reporting guidance for entities that received $10,000 or more in payments under the Provider Relief Fund (PRF) created by the CARES Act. This most recent guidance supplements the general notice of reporting requirements that HHS previously issued. This guidance does not apply to funds received under the Nursing Home Infection Control distribution, the Rural Health Clinic Testing distribution, or the Health Resources and Services Administration (HRSA) Uninsured Program.

HHS released this guidance to inform PRF recipients of the data elements they must submit for reporting for calendar years 2019 and 2020. HHS will closely scrutinize these reports to determine a provider’s compliance with the terms and conditions of the PRF program. In general, PRF recipients must use one of two categories to report that funds were used for one of the following:

  1. Healthcare-related expenses attributable to the coronavirus that were not reimbursed by another source.
  2. Expenditures applied to lost revenue attributable to the coronavirus.
Reporting Healthcare Expenses Attributable to the Coronavirus

The reporting requirements for healthcare-related expenses vary depending on the amount received under the PRF. Providers that received between $10,000 and $499,999 will be required to report two aggregated categories for general and administrative (G&A) expenses and other healthcare-related expenses. Providers that received $500,000 or more must provide further detail by delineating the following subcategories in their reports:

G&A Expenses:

  • Mortgage/Rent
  • Insurance
  • Personnel
  • Fringe Benefits
  • Lease Payments
  • Utilities/Operations (e.g., lighting, cooling, cleaning, vendor services not included in personnel)
  • Other G&A Expenses (other expenses considered part of overhead)

Other Healthcare Related Expenses:

  • Supplies (e.g., personal protective equipment (PPE), hand sanitizer)
  • Equipment (e.g., ventilators, HVAC)
  • IT (e.g., telehealth infrastructure, teleworking, increased bandwidth)
  • Facilities (e.g., lease/purchase of permanent or temporary structures, modifications to facilities)
  • Other Healthcare-Related Expenses (other expenses paid to prevent, prepare for or respond to COVID-19)
Reporting Expenditures Applied to Lost Revenue Attributable to the Coronavirus

HHS had previously stated that “lost revenues that are attributable to coronavirus” means “any revenue that you as a health care provider lost due to coronavirus.” HHS also previously told providers that they “may use any reasonable method of estimating the revenue” by, for example, comparing this year’s losses to either a projected budget that did not account for the coronavirus or to the revenue from last year. However, the most recent guidance shows that HHS had made a dramatic departure from allowing “any reasonable method” and has instead provided a much narrower explanation of the only acceptable method that providers must use.

Under this new guidance, the PRF permits applying payments to lost revenue only up to the amount of the provider’s 2019 net gain from healthcare-related sources. The method for calculating lost revenue attributable to the coronavirus will be based on the negative change of net operating income from patient care-related sources when comparing calendar years 2019 and 2020. To facilitate this calculation, providers must report extensive data regarding the following:

  • Total revenue/net charges from patient care-related sources for 2019 and 2020
  • Revenue from patient care payer mix for 2019 and 2020
  • Other assistance received (e.g., PPP loans, FEMA CARES Act funds, etc.)
  • Total calendar year expenses for 2019 and 2020
  • G&A expenses for 2019 and 2020
  • Healthcare related expenses for 2019 and 2020
  • Some additional non-financial data, to be collected quarterly (e.g., facility, staffing and patient care metrics; change of ownership and single audit status)

The reporting system will open on January 15, 2021. For providers that expend all PRF funds in calendar year 2020, the deadline to report will be February 15, 2021. For any provider that does not fully expend PRF funds in calendar year 2020, the final reporting deadline will be July 31, 2021.

This most recent guidance demonstrates that HHS plans to thoroughly review whether providers have complied with the PRF in expending the program’s funds. Additionally, the new detail on how providers must calculate lost revenue shows that HHS is not permitting as much flexibility in the process as originally communicated.

Although it is more detailed than previous statements on the PRF reporting requirements, this guidance still leaves many questions unanswered. HHS has announced that the HRSA will host Q&A sessions via webinar and publish FAQs prior to the reporting deadline to aid in the reporting process. Thus, these and other changes to the mandatory reporting requirements are anticipated but not yet available.

Authorship Credit: Amy Fouts and Greg Tanner

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