On Thursday, October 22, the United States Department of Health and Human Services (HHS) announced that the latest Provider Relief Fund (PRF) application period has been expanded to include additional provider applicants such as residential treatment facilities, chiropractors, and vision care providers who have not yet received PRF distributions. The Phase 3 PRF funding, announced on October 1, 2020, makes an additional $20 billion available for providers on the front lines of the COVID pandemic.
HHS Reporting Requirements
In this latest announcement, the HHS also modified its reporting guidance for PRF payment recipients. To date, the PRF has obligated over $135 billion to providers for health care-related expenses or lost revenues attributable to COVID. Guidance issued by the HHS in September on instructions for reporting on the use of PRF distributions limited the applicability of the PRF funds to an amount that would allow most providers to be no more profitable in 2020 than they were in 2019. At that time, the HHS concluded it would be inequitable to allow some providers to be more profitable in 2020 than in 2019 while so many other providers were struggling to survive. The September guidance resulted in significant industry push back, as it would require many hospitals to return PRF funds that had already been provided to support their immediate COVID needs.
Provider Relief Fund Eligibility
In response to these concerns raised by the industry, HHS, in its most recent guidance, amended the reporting requirements to provide that after reimbursing health care-related expenses attributable to COVID, which were not reimbursed by other sources, providers may use their remaining PRF funds to cover any lost revenue. Lost revenue is measured as a negative change in year-over-year actual revenue from patient care-related sources. This change allows the provider to apply PRF distributions received against all lost revenues, without limitation. The American Hospital Association, among other industry groups, has applauded HHS’ change.