On December 27, 2020, President Trump signed the “Consolidated Appropriations Act, 2021” which allocates additional funds to healthcare providers and provides some changes and clarifications to existing Provider Relief Fund guidance. A few highlights are as follows:
Additional Allocations for Healthcare-Related Expenses or Lost Revenues
An additional $3 billion is allocated to the Provider Relief Fund which will be used to reimburse health care providers for health care related expenses or lost revenues that are attributable to coronavirus. At least 85% of the $3 billion, plus any amounts recouped from previous distributions, must be used for a specific distribution.
Eligible providers will be required to submit an application for funding which will include a statement justifying the need for the payment. HHS will consider financial losses and changes in operating expenses occurring in the third or fourth quarter of calendar year 2020 or the first quarter of calendar year 2021 that are attributable to coronavirus when determining the distribution allocation.
The HHS provider relief funds compliance supplement addendum has been released.
For any Provider Relief Fund payments, including Targeted Distribution payments, to an eligible health care provider that is a subsidiary of a parent organization, the parent organization may allocate all or any portion of the reimbursement among the “eligible” subsidiary health care providers of the parent organization. The responsibility for reporting the reallocated reimbursement remains with the original recipient of the funds. At this point, the interpretation of who is an “eligible” subsidiary is not clear.
Calculating Lost Revenue
For any Provider Relief Fund payments that may be allocated to lost revenue, including those received prior to this legislation being enacted, providers may calculate lost revenue using the HHS Frequently Asked Question guidance that was released in June 2020. This includes utilizing the difference between a provider’s budgeted and actual revenue if such budget was established and approved prior to March 27, 2020.
At this time, it is unclear whether providers will be allowed to calculate lost revenue using a time period outside of the calendar year basis required by the Post-Payment Notice of Reporting Requirements issued by HHS on November 2, 2020 or to what extent providers will be able to tailor these calculations.
These legislative updates will likely result in additional changes to the HHS Post-Payment Notice of Reporting Requirements and Frequently Asked Questions so we encourage providers to continue to closely monitor any additional information released by HHS.
Wondering how this will affect your organization?
See what more we can bring to organizations just like yours.Healthcare