What to Know About the Provider Relief Fund and Additional Funding Update

May 14, 2021 | Article

The U.S. Department of Health and Human Services (HHS) Provider Relief Fund (PRF) program continues to evolve. The latest program updates were dated April 1, 2021; however, the last major change was in January 2021.

Here’s what you need to know about the more recent changes, current reporting deadlines and recommended next steps as we wait for further updates.

In addition, new healthcare funding opportunities have either been recently announced or are expected based on stimulus bills. This update will provide a summary of these programs.

Let us help you make sense of these programs and what they mean for your healthcare entity.

Guidance Update

As noted above, HHS provided some updates to their FAQ document in early April. As a refresher, the key updates:

  • Provided changes to enforce the ability to audit and recoup funds inappropriately used or not supported.
  • Added additional language around payments made in error. This has been an ever-evolving consideration, especially for entities utilizing early application guidance that may have inappropriately excluded contractual adjustments and/or bad debts from the revenue base used to calculate payments received.
  • Amended the FAQ on period of time to use the funds; however, no changes to the 6/30/21 deadline.
  • Removed “increased” from the language around healthcare-related expenses in various FAQs. This is likely following the 2/24/21 FAQ allowing direct expenses, even if not incremental in nature.
  • Modified the FAQ language around transfers between related parties (and with a parent) to conform with the guidance, allowing for such transfers.
  • Further clarified cost reimbursement language to note that amounts identified as reimbursed or obligated to be reimbursed under this provision only relate to that portion of cost being paid for by that payor.

Reporting and What to Do Now

As of the date of this document, the deadline for providers to report on their use of PRF is still unknown. In addition, it is not known if separate reports for 2020 and 2021 will be required, or if both years will be consolidated into one report. The latest available guidance is included in the General and Targeted Distribution Post-Payment Notice of Reporting Requirements dated January 15, 2021.

Even without set deadlines for reporting and continual changes to guidance, it is imperative that recipients determine the amount of lost revenue and qualifying expenses they may claim towards PRF based on current guidance. Recipients should then use that information to determine the funding they have remaining or potentially at risk, and develop a game plan to use the remaining funds to help prevent, prepare for and respond to the COVID-19 pandemic.

Recommended specific steps include:

  1. Calculating lost revenue using one or more of the three current options available.
  2. Determining potential risks and opportunities within the lost revenue calculations and accumulating information expected to be required by HHS.
  3. Identifying qualifying expenditures, including capital purchases; ensuring adequate documentation is retained and segregating into categories expected to be required by HHS.
  4. Estimating planned qualifying expenditures through the current deadline to use funds of June 30, 2021.
  5. Subtracting any amounts that were reimbursed by or obligated to be reimbursed by another funding source, including state and other grants; patient, resident and third-party payor billings; other federal programs such as PPP; and cost-based reimbursement programs.
  6. Establishing a team or identifying a qualified individual to review the above calculations and provide input to identify potentially missing expenditures or other modifications.
  7. Comparing the above items to total PRF payments received to determine the remaining funding available or amounts in excess of payments received.
  8. Considering related party relationships, including the ability to transfer funds among eligible controlled entities.
  9. Considering what expenditures would be incurred if the deadline was extended and creating a prioritized listing of such items or your facilities best estimate of any extension to the PHE.
  10. Retaining documentation in a manner available for potential future audits and to adjust should HHS release new guidance or modifications to existing guidance.

Consolidated Appropriations Act and American Rescue Act

The Consolidated Appropriations Act, 2021, allocated an additional $3 billion to the PRF. At least 85% of the $3 billion, plus any amounts recouped from previous distributions, must be used for a specific distribution (i.e. Phase 4).

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 the COVID-19 pandemic when determining the distribution allocation, according to the Act. The application process for funding under any new PRF distributions has not yet been published, however.

The American Rescue Plan Act of 2021 (ARP) provided an additional $8.5 billion to “rural providers or suppliers” as defined by law or the Secretary of HHS, called the Rural Relief Fund (RRF). This new program is separate from the PRF; however, the program is currently structured similarly. The key difference is the definition of an eligible rural health care provider. The text of the ARP requires an application for these funds, whereas the CARES Act text had similar language and initial distributions of PRF did not require an application. The distribution process for the RRF, including any application provisions, has not yet been published.

The ARP also provided:

  • $500 million to the USDA for rural facilities, likely to be distributed through an application process.
  • $200 million for skilled nursing facilities for quality improvement, infection control and vaccination support.

Additional Funding Opportunities:

In May of 2021, HHS announced the availability of nearly $1 Billion through various programs to respond to the pandemic. Highlights are as follows:

  • A COVID-19 Coverage Assistance Fund (CAF) covering costs of administering COVID-19 vaccines to patients enrolled in health plans that either do not cover vaccination fees or cover them with patient cost-sharing (underinsured patients). The CAR will compensate providers for eligible claims, at national Medicare rates (adjusted in March to reflect true costs associated with administering the vaccines). Claims are billed through a portal, similar to the COVID-19 Uninsured Program, which continues to reimburse providers for vaccine administration fees associated with uninsured individuals. More information on the CAF is available here.
  • The Rural Health Clinic COVID-19 Testing and Migration Program will provide up to $100,000 to each Rural Health Clinic (RHC) to help broaden COVID-19 testing and mitigation to slow the spread of the virus in their communities.
  • The Small Rural Hospital Improvement Program will provide up to $230,000 each to Critical Access Hospitals and other rural hospitals with fewer than 50 beds to increase COVID-19 testing, expand access to testing in rural communities and broaden efforts to respond to and mitigate the spread of the virus in ways tailored to community needs. Interested hospitals should contact their state’s SHIP grantee, located here.
  • The Rural Health Clinic Vaccine Confidence Program provides nearly $100 million in grants. Funds will be utilized to increase patient and community confidence in COVID-19 vaccination and to address equity gaps by bolstering patient literacy on the benefits of broader vaccination for other infectious diseases. An application process will be available for RHCs that are interested in participating.

What to Do Next Regarding the Provider Relief Fund

With the June 30, 2021, PRF deadline quickly approaching, and continued pressure from industry groups and other interested parties, new releases and modifications to HHS PRF guidance are expected to continue. Accordingly, it’s imperative to stay on top of this program as it progresses. In addition, the flurry of new funding opportunities provides much needed support for vaccine administration and rural health care.

The program continues to issue guidance and make changes. Make sure you’re in compliance.


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