Five Things Healthcare Providers Should know about Reporting Use of Provider Relief Funds

by: Miranda A. Preston and James R. Taylor, Milligan Lawless

The Provider Relief Fund (PRF) was created to reimburse healthcare providers for lost revenue attributable to COVID-19 or health-related expenses incurred to prevent, prepare for, and respond to COVID-19. Under the CARES Act, Congress appropriated $178B for the PRF, and to date, $118B has been paid to and attested by healthcare providers throughout the country.  In Arizona, 7,813 healthcare providers have received PRF payments, totaling $1.64B.[1]  Currently, 260 Arizona providers, including hospitals, skilled nursing facilities, assisted living facilities, surgery centers, medical practices, dentists, and hospices, have each received over $750,000 in PRF payments. In light of a substantial likelihood of future audits, this article summarizes five items providers should know regarding their mandatory reporting obligations to the U.S. Department of Health and Human Services (HHS).

1. Providers who Received PRF Payments during the First Half of 2020 Must Report by September 30, 2021.

Providers who received one or more payments exceeding $10,000 in the aggregate during a PRF Payment Received Period[2] are required to submit reports to HHS as to how they used the PRF funds.  The PRF reporting portal is now open, and HHS recently issued new guidance on the use and reporting of PRF payments.  In this guidance, HHS adopted a multiphase reporting system, pursuant to which the deadlines for the provider’s use and reporting of PRF funds are based on the specific dates on which the provider received the PRF payments. Providers who received payments under the first automatic distribution on April 10, 2020 must report on the payments they received between April 10, 2020 and June 30, 2020 (“Period 1”) by September 30, 2021. HHS has made it clear that it will not grant extensions for reporting.[3]  Failing to report within the applicable time period(s) is a breach of the Terms and Conditions applicable to the recipient of the PRF distribution, and may result in recoupment of PRF funds received.[4]

2. Providers who received PRF payments after the initial automatic April 10, 2020 funding, have differing reporting requirements, as set forth in the chart below.

PeriodPayment Received PeriodDeadline to Use FundsReporting Time Period
Period 1April 10 – June 30, 2020June 30, 2021July 1 – September 30, 2021
Period 2July 1 – December 31, 2020December 31, 2021January 1 – March 31, 2022
Period 3January 1 – June 30, 2021June 30, 2022July 1 – September 30, 2022
Period 4July 1 – December 31, 2021December 31, 2022January 1 – March 31, 2023

The reporting deadlines apply to all recipients who received one or more payments exceeding $10,000 in the aggregate during a Payment Received Period.  Recipients who received PRF payments during multiple Payment Received Periods are required to submit multiple reports.  Providers need to register a PRF reporting account before they can begin reporting. HHS has published a Registration User Guide, and Reporting Portal FAQs to assist providers with the registration process.

3. There are New Flexibilities For Providers in Calculating Lost Revenues

Providers can allocate the entirety of their PRF payments to Lost Revenue. In the use of funds calculation, PRF payments that are not first allocated to unreimbursed expenses are then allocated towards a provider’s lost revenue. It was previously unclear whether providers who had no unreimbursed expenses attributable to the coronavirus could allocate the entirety of the PRF payments they received towards lost revenue. In a July 1, 2021 FAQ, HHS clarified that PRF payments could be applied solely to a provider’s lost revenues.[5]  However, lost revenues or expenses must only have been incurred during the period of availability correlating to the Payment Received Date. The FAQs clarify that a provider’s lost revenue is calculated on a quarterly basis. PRF recipients still have three options for calculating lost revenue:

Option i:   The difference between actual patient care revenues;

Option ii:  The difference between budgeted (prior to March 27, 2020) and actual patient care revenues.

Option iii: A calculation by any reasonable method of estimating revenues.

The FAQ clarify that “…for Option i and Option ii, lost revenues are calculated for each quarter during the period of availability as a standalone calculation, with 2019 quarters serving as a baseline. For each calendar year of reporting, the applicable quarters where lost revenue is demonstrated are totaled to determine an annual lost revenue amount. There’s no offset [of quarters during the period of availability where the provider didn’t experience lost revenue.]”[6]

Further, HHS clarified that for providers who have more lost revenue in a Payment Received Period than PRF payments for the same period, that portion of lost revenue can be carried forward and applied against payments received during later Payment Received Periods and included in the lost revenues reported for later reporting periods, provided expenses and lost revenues are not duplicated.[7]

4. Maintaining Detailed Documentation is Critical.

Pursuant to the Terms and Conditions that providers are bound by in connection with their receipt of PRF payments, providers are required to maintain supporting documentation demonstrating that costs were obligated/incurred during the Period of Availability. Providers aren’t required to submit that documentation when reporting, but HHS has clearly stated that it will audit the use of PRF payments and recoup payments if the provider’s expenses are not supported by adequate documentation.[8]

5. HHS is Developing an Appeals Process.

In recognition that providers may have questions regarding the accuracy of their PRF payments, HHS recently added a new FAQ stating that it will soon introduce a structured reconsiderations process to review and reconsider PRF payment uses based on the provider’s submitted supporting documentation.[9]

[1] https://taggs.hhs.gov/Coronavirus/Providers

[2] The Payment Received Period describes a specific time period when the recipient received one or more payments. The payment is considered received on the deposit date for automated clearing house (ACH) payments or the check cashed date. There are four Payment Received Periods during the time frame between April 10, 2020 to December 31, 2021. https://www.hhs.gov/coronavirus/cares-act-provider-relief-fund/reporting-auditing/index.html

[3] PRF FAQ regarding extensions (available at https://www.hhs.gov/sites/default/files/provider-relief-fund-general-distribution-faqs.pdf), states: “Are providers able to request extensions on submissions of their required reports for any of the required reporting periods? (Added 7/1/2021)” To which HHS’s reply is,  “No. Providers that received one or more payments exceeding $10,000, in the aggregate, during a Payment Received Period are required to report in each applicable Reporting Time Period. Providers that are required to report and do not submit a completed report by the applicable deadlines will be deemed out of compliance with the program Terms and Conditions and may be subject to recoupment.”

[4] The Terms and Conditions applicable to the recipients of each type of PRF distribution require the recipient to submit reports as specified by HHS in future program instructions. The Terms and Conditions also provide that non-compliance with the Terms and Conditions is grounds for HHS to recoup PRF funds.  To view the Terms and Conditions applicable to the various PRF distributions, click here.

[5] Id.

[6] Id.

[7] Id.

[8] Pursuant to HHS PRF FAQ available at https://www.hhs.gov/sites/default/files/provider-relief-fund-general-distribution-faqs.pdf, HHS states that “HHS reserves the right to audit Provider Relief Fund recipients now or in the future, and is authorized to collect any Provider Relief Fund payment amounts that have not been supported by documented expenses or revenue losses attributable to coronavirus or not used in a manner consistent with program requirements or applicable law. All payment recipients must attest to the Terms and Conditions, which require the submission of documentation to substantiate that these funds were used for health care-related expenses or lost revenues attributable to coronavirus.”

[9] Id.