Healthcare providers who received funding from the Provider Relief Fund must report the use of funds to the Health Resources & Services Administration according to a specific reporting schedule.
Here’s what healthcare providers need to know.
Background of the Provider Relief Fund
The COVID-19 pandemic severely impacted the financial sustainability of healthcare providers. Due to shutdowns and limitations on elective procedures, healthcare providers lost out on significant revenues. Providers also incurred additional costs to keep patients and staff safe during the pandemic.
Knowing that healthcare providers are crucial for maintaining the health and safety of Americans, the federal government rolled out the Provider Relief Fund (PRF).
The PRF, which we originally looked at in this blog post, is primarily funded by several relief packages, including:
- Coronavirus Aid, Relief and Economic Security Act (CARES – $100 billion)
- Coronavirus Response and Relief Supplemental Appropriations Act (CCRSA – $3 billion)
- Payroll Protection and Health Care Enhancement Act (PPHCEA – $75 billion)
The PRF saved countless healthcare providers from financial uncertainty. However, the funds came with some strings attached.
Allowable Expenses Related to the Provider Relief Fund
The primary use of the funds is to cover expenses related to preventing, preparing for and responding to COVID-19.
It’s important to note that any expenses that were reimbursed by other programs, such as a Payroll Protection Plan loan or previous PRF payments, cannot be used in the calculation of acceptable PRF expenses. The eligible expenses for PRF fall under two categories: (1) general/administrative and (2) healthcare-related expenses attributable to COVID-19.
The following general and administrative expenses are allowable:
Mortgage/rent
Payments related to mortgage or rent of a facility.
Insurance
Business insurance premiums paid for property, malpractice, general business and other operation related insurance.
Personnel
Workforce-related actual expenses paid to prevent, prepare for or respond to COVID-19, such as workforce training, staffing, temporary employees, contract labor, overhead/administration employees or security employees.
Fringe benefits
Additional benefits supplementing an employee’s salary such as hazard pay, travel reimbursement and employer health insurance.
Lease payments
New equipment or software leases for a vehicle, medical equipment or other COVID-19 related equipment that is not outright purchased and will be returned to the original owner (operating lease).
Utilities/operations
Lighting, cooling/ventilation, cleaning or other outside sourced services not included in personnel.
Other general and administrative expenses
Any other expenses that can be considered to prevent, prepare for or respond to COVID-19 that were not included in the other general and administrative expenses.
Additionally, the following healthcare-related expenses attributable to coronavirus are allowable:
Supplies
Single-use or reusable patient care devices, cleaning supplies and office expenses used to prepare for, prevent or respond to COVID-19. Those supplies include PPE, hand sanitizer, supplies for patient screening and vaccination administration materials, among other things.
Caveats Related to Expenses
There are a few other caveats to note with the expenses.
The purchase of supplies is still eligible in the current reporting period even if the supplies do not arrive within the reporting period.
Additionally, a capital project is allowable only if the project is completed before the designated deadline to use the funds. You must also follow the same basis of accounting that your organization follows, so if your organization reports its books on the cash basis of accounting, the expenses in the reporting period must fall within that same basis of accounting.
If the allowable expenses do not cover the total amount of PRF funds received, the healthcare organization may use the remaining funds to cover any lost revenue in any quarter in the reporting period, except it cannot be claimed against the PRF funds deemed infection control.
There are three methods of determining lost revenue. Once the method is accepted, it must be used across all PRF reporting periods. Just like the expenses, there must be consistency in accounting method when calculating lost revenue. The three methods are (1) 2019 revenue baseline, (2) budget versus actual and (3) other reasonable method.
If there is unused lost revenue not covered by PRF funds, the organization can use the remaining lost revenue amount in future reporting periods. The lost revenue calculation must be split into the following categories: Medicare A + B, Medicare Part C, Medicaid/Children’s Health Insurance Program, commercial insurance, self-pay (no insurance) and miscellaneous other sources of patient care service not included in the other categories.
Accounting Methods for Calculating Lost Revenue
Let’s take a closer look at the three accounting methods for calculating lost revenue:
2019 revenue baseline
This method is the most common and simple. It requires the organization to calculate lost revenue by comparing a quarter in the current reporting period to that same quarter in 2019.
Approved budget versus actual
This method calculates lost revenue by comparing budgeted revenue by payer type compared to the actual revenue the organization received in the budgeted period.
In order to use this method, the organization must have a budget that was approved prior to March 27, 2020, and cover the entire period of eligibility. Additionally, an attestation must be made by a CEO, CFO or other representative.
Other reasonable method (undefined)
With this method, the organization must submit a calculation for lost revenue based on a method deemed reasonable. Excel support for the method and an explanation must also be accompanied to support the calculation.
The Health Resources & Services Administration (HRSA) notes that there is a high likelihood of an audit if this method is used.
Reporting Periods
You can see the full schedule of reporting periods here.
What You Should Do Now
In order to report the fund usage and other information to HRSA, you will need to sign up on their portal. Once you register for one period, you will not be required to register for any other reporting periods for which you received PRF funds. Also, if the funds are not completely exhausted by the deadline, the provider must repay the unused balance to HRSA.
It is important to understand your organization’s PRF reporting requirements. Failure to meet the reporting requirements in the allotted timeframe may result in you having to repay all funds and later, go through debt collection actions.
You can find important dates for reporting here.
Additional Resources
HRSA provides PRF recipients with several resources:
- Reporting resources include reporting guides and worksheets, webinars and reporting fact sheets
- Important dates and reporting deadlines
- PRF reporting hotline: 866.569.3522
Need Help?
Contact us here or call 800.899.4623.
This article was originally published March 22, 2022 and was updated July 25, 2022 with new information.
