Hospitals face September 30 Provider Relief Fund reporting deadline

Brian Lee is an attorney in Alston & Bird's Health Care Group.

Photo courtesy of Alston & Bird

Providers remain under a September 30 deadline to report lost revenue and pandemic-related expenses as a condition of keeping their federal Provider Relief Funds allocated through the Coronavirus Aid, Relief, and Economic Security Act starting last year. 

But as health systems and hospitals face COVID-19 surges from the Delta variant, and due to natural disasters around the country, the Health Resources & Services Administration has said it would allow a 60-day grace period to allow providers to come into compliance with reporting requirements.

The September 30 Reporting Period 1 deadline has not changed, according to HRSA. Providers are strongly encouraged to complete their reports by that date.

However, no enforcement action will be initiated during the grace period from October 1 to November 30.  

WHY THIS MATTERS

The reporting is intended to determine whether the provider has used all of the money it received.

The additional time on reporting requirements is welcome, but changing guidance and a lack of specifics have left providers with more questions than answers as they begin the reporting process, according to Brian Lee, attorney in Alston & Bird's Health Care Group. Lee's practice focuses on federal reimbursement and is actively advising providers. 

The challenge, Lee said, is that once you peel back the layers of what the federal government is looking for, it gets very murky as to how to calculate increased expenses and lost revenues. 

It doesn't help that the rules have changed dramatically over the last 17 months. Initially, the amount of relief fund payments providers could retain was based on a net loss.

The framework has changed, but is still a two-step process, he said. First, providers have to calculate increased expenses attributable to the coronavirus that are not able to be reimbursed elsewhere. Then they must look at lost revenues.

The government gives three options for reporting lost revenues, according to Lee. The first is to compare actual patient care revenues from 2019 to 2020 using 2019 as a baseline. The second option is to compare the actual revenue to budgets approved prior to March 27, 2020 for 2020 and the first half of 2021, but most healthcare providers did not have a 2021 budget approved before the pandemic started.

The third option is for providers to come up with their own "reasonable" methodology that factors in expenses and revenues for a year-over-year comparison, which provides the greatest flexibility for documenting lost revenues attributable to coronavirus. This, said Lee, may be the only option for many providers to show the true cost of COVID-19 on revenues. 

RETURNING PAYMENTS

Providers have to report for each payment period for which they received a payment. For the first reporting deadline of September 30, providers are reporting on PRF payments received from April 10 to June 30, 2020. Providers have a 30-day period to return unused funds back to the government. That 30 day period starts after every reporting deadline. 

For this first reporting period, and factoring in the 60-day grace period, any unused funds must be returned by December 30. 

Technically, these are grant funds, Lee said. There is the potential for the Department of Health and Human Services or HRSA to recoup payments the agencies deem were not used appropriately.

"That's where most of the consternation comes in from a provider perspective," Lee said. "Health systems have received millions and millions of relief fund dollars."

Most providers, because there was so much financial loss, spent the money to maintain healthcare delivery capacity and to cover the cost of additional personal protection equipment, ventilators, to retrofit facilities and, later on, to pay hazard pay bonuses and to hire new staff.

"I would say a lot of providers have spent the money already," he said.

RECOMMENDATIONS

Providers must stay on top of the ever-changing guidance. 

As of September 13, there are new and modified FAQs related to the provider relief funds, according to Lee. Providers must ensure they are documenting everything and have a rationale as an audit defense. He also strongly encourages providers to consider outside counsel. 

THE LARGER TREND

Following the announcement of a $17 billion Phase 4 distribution, there is an estimated $10 to $28 billion remaining in the provider relief fund, according to Lee, from an initial $178 billion allocated as grants from the CARES Act, the Paycheck Protection Program and Health Care Enhancement Act and the Consolidated Appropriations Act.

When the CARES Act was first enacted, there were a lot of questions as to what it was supposed to do. As the Trump Administration gave out funds in a fast and furious way to help providers suddenly thrown into financial hardship, some were left out. HHS has been effectively plugging holes to make sure rural providers and others have gotten what they needed, according to Lee.

Now providers must give a reckoning of how these funds were spent.

"There's a level of burden associated with this," Lee said," and a level of general confusion."

Twitter: @SusanJMorse
Email the writer: susan.morse@himssmedia.com