Note: HHS announced on Jan. 16, 2021, that the agency is delaying reporting deadlines for PRF funds. The announcement also offered new guidance on the calculation of lost revenues and method used to estimate revenue. Our article has been updated appropriately. 

If you’ve applied for Phase 3 Provider Relief Funds (PRF), help could be on the way. The Department of Health & Human Services (HHS) recently announced it has completed the review of applications and has begun distributing payments beginning December 16, 2020 through January 2021. The funding comes at a crucial time as healthcare providers attempt to distribute COVID-19 vaccines as quickly as possible and manage a surge in cases.

Phase 3 PRF funds are earmarked for applications submitted between Oct. 5 and Nov. 6, 2020. HHS has increased the amount in this phase to $24.5 billion, and funding can cover up to 88% of a recipient’s reported losses.

Phase 3 PRF payments will be distributed to over 70,000 providers. However, roughly 35,000 applicants won’t get any additional payments because:

  • They had no change in revenues or net expenses attributable to COVID-19; or,
  • Their PRF funds received had already exceeded 88% of reported losses.

Don’t forget the required reporting!

As with the other PRF phases, Phase 3 funds must be reported by recipients. The portal to report PRF funds is now open for registration only; once registered, you will be notified when the required information can be reporting to HHS. Additionally, any PRF payments received from before Dec. 31, 2020 that have not been expended by Dec. 31, 2020 must be expended by June 30, 2021 and reported by July 31, 2021.

PRF Reporting Delay and Reporting Guidance Update

On Jan. 16, 2021, HHS announced a change in reporting dates for PRF Phase 3 funds. The passage of the Coronavirus Response and Relief Supplemental Appropriations Act on Dec. 27, 2020 introduced new mandates for PRF reporting requirements. As a result, the original Feb. 15, 2021 deadline was implemented to help accommodate those changes. Registration on the newly opened portal is a simple process. Once you’ve registered, you’ll receive a notice once it’s time to submit information.

The agency also issued an updated version of its Post-Payment Notice of Reporting Guidance allowing providers to calculate lost revenues using the difference between actual and budgeted patient care revenue for 2020. PRF recipients can also use “any reasonable method” to estimate revenue; however, this could increase your likelihood of an audit.

A refresher: How can I use PRF funds?

Per an October 2020 HHS update, qualifying costs and lost revenues must be “… for health care related expenses or lost revenues that are attributable to coronavirus.” HHS intentionally left this definition broad to include products, services or payments meant “…to prevent, prepare for, and respond to coronavirus.” Examples from the agency’s Post-Payment Notice of Reporting Requirements include:

  • Supplies used to provide healthcare services for COVID-19 patients (possible or actual)
  • Equipment used to administer healthcare services for COVID-19 patients
  • Information technology (IT) to expend or preserve care delivery
  • Personnel, fringe benefits and workforce training regarding COVID-19-related standards and practices
  • Expenses for developing and staffing emergency operation and testing centers
  • Mortgage/rent for a facility and utilities
  • Lease payments on new equipment or software
  • Insurance premiums for property, malpractice, business or other insurance
  • The cost of reporting COVID-19 test results to federal, state or local governments
  • Constructing temporary structures to expand capacity for COVID-19 patient care
  • Housing or treating patients in separate areas from COVID-19 patients
  • Facilities, equipment, supplies, practices, staffing and technology related to COVID-19

Providers can use general distribution payments to cover these expenses and more if the offsetting cost or lost revenue corresponds to coronavirus. These costs do not need to be specific to providing care for possible or actual coronavirus patients. The PRF is meant to give relief for healthcare providers generally impacted by the pandemic.

Our previous articles contain for more information on the PRF program and updated reporting requirements. You can also check out the HHS website for instructions and important provider information.

Finally, please reach out to our healthcare CPAs as well. They’ve been following these developments closely and can help guide you through the process.

All content provided in this article is for informational purposes only. Matters discussed in this article are subject to change. For up-to-date information on this subject please contact a James Moore professional. James Moore will not be held responsible for any claim, loss, damage or inconvenience caused as a result of any information within these pages or any information accessed through this site.