The US Department of Health and Human Services (HHS) updated its reporting requirements for Provider Relief Fund (PRF) distributions, opened the reporting portal for registration and issued a user guide, and released several new and modified FAQs. The new guidance reflects important changes required by the recent stimulus bill (the Coronavirus Response and Relief Supplemental Appropriations Act) regarding the revenue loss definition. The updated FAQs address the $24.5 billion Phase 3 General Distribution methodology and payment timeframe, Single Audit extensions, and several other issues.
Please note that HHS states that the PRF reporting portal, which was scheduled to open January 15, is not yet operational for reporting purposes and is only open for registration (see details below). In its updated FAQs, HHS stated that it will announce the new window for submitting the first report on calendar year 2020 expenditures in the near future, implying that the February 15 reporting deadline is delayed. GNYHA will advocate for an appropriate extension of the reporting deadline given the recent changes in the reporting guidance and because HHS has not yet conducted its planned Question and Answer sessions.
Updated Reporting Guidance
Lost Revenue Calculation
The updated reporting guidance allows recipients to define lost revenue as one of the following:
- The difference between 2019 and 2020 actual patient care revenue.Providers using this method must submit 2019 Revenue from Patient Care Payer Mix by quarter as outlined in the guidance.
- The difference between 2020 budgeted and 2020 actual patient care revenue. Providers using this method must submit a copy of their 2020 budget and an attestation from the Chief Executive Officer or similar responsible individual that the budget was approved before March 27, 2020.
- Any reasonable method for estimating revenue. Providers using this method must include a description and explanation of the alternative methodology and will be at increased risk of a Health Resources and Services Administration (HRSA) audit. They will be notified if HRSA determines the proposed methodology is not reasonable and given 30 days to resubmit their report using one of the other two methods.
Use of Funds in 2021
Recipients that do not expend all of their PRF distributions in 2020 will be allowed to use the remaining amounts through the first six months of 2021 on COVID-19-related expenditures or lost revenues. The revenue loss definition for the first six months of 2021 is either: 1) the difference between 2019 Q1-Q2 and 2021 Q1-Q2 actual revenue, or 2) 2020 Q1-Q2 budgeted revenue and 2021 Q1-Q2 actual revenue.
Transfer of Targeted Distributions
The most recent stimulus bill allowed providers to transfer PRF Targeted Distributions to hospitals within a system. HHS updated the guidance to reflect this change and specified that if a subsidiary’s parent organization transfers the subsidiary’s Targeted Distribution to another subsidiary of the parent organization, the original subsidiary remains the “Reporting Entity” and must indicate the amount of the Targeted Distributions it received that were transferred to the parent entity. The guidance also states that transferred Targeted Distributions face an increased likelihood of a HRSA audit.
Interest Earned on PRF Payments
HHS included new guidance stating that if a provider held PRF payments in an interest-bearing account, the amount of interest earned is treated as part of the total PRF distribution and must be reported.
PRF Reporting Portal
HHS opened its reporting portal for registration only and released a user guide and FAQ document to assist with the registration process (the documents are also available on the “Reporting and Auditing Requirements” section of the PRF website). Once registered, providers will be notified when they can re-enter the portal to begin reporting on the use of funds and HRSA will post it on the PRF website. The FAQs state that the operability of the portal for reporting on the use of funds has been delayed and that the new reporting window will be announced soon.
Phase 3 General Distribution
HHS modified the FAQs to state that some Phase 3 General Distribution applicants may not receive 88% of the losses reported on their applications because HHS determined that 1) the reported revenues and operating expenses from patient care were not exclusively from patient care, 2) the amounts reported were not reflected in the submitted financial documentation, or 3) the reported figures were extreme outliers in comparison to other applicants of the same provider type. HHS states that it “capped the amount paid to these provider types based on industry estimates of revenue and operating expenses from patient care.”
The FAQs also state that HHS is continuing to review and validate the Phase 3 General Distribution applications and will disperse payments to eligible providers in batches through the first months of 2021 as applications are adjudicated.
Auditing and Reporting Requirements
HHS added an FAQ stating that organizations can get an extension on their 2020 audit year reports for Single Audits conducted under 45 CFR Part 75, citing the 2020 Compliance Supplement Addendum issued in December that provides additional guidance for major programs with expenditures of COVID-19 awards audited under 2 CFR 200 Subpart F. The document provides a three-month extension for submitting the Single Audit reporting package for recipients and subrecipients of COVID-19 funding with original due dates from October 1, 2020, through June 30, 2021 (applicable for fiscal year ends January 31, 2020, through September 30, 2020). The extension does not require approval, but recipients should maintain documentation of the reason for the delayed filing. The FAQs also note that the 2020 Compliance Supplement Addendum provides guidance to auditors on the PRF and COVID-19 Testing for the Uninsured.