On September 19, 2020, the US Department of Health & Human Services (HHS) released the General and Targeted Distribution Post-Payment Notice of Reporting Requirements for the Provider Relief Fund (PRF), which was authorized by the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
In addition to detailing the reporting requirements (here’s a quick summary), HHS emphasized the importance of maintaining documentation as PRF funds may be subject to an audit.
The instructions break down how an organization should report its use of PRF funds, including by the type of expenses.
A significant change from the frequently asked questions (FAQ) was in the reporting requirements related to lost revenue. HHS has provided a new method for determining lost revenue attributable to coronavirus with categories and some general definitions within the footnotes related to revenue or net charges and the use of calendar years 2019 and 2020 to determine the impact. Of note, there’s also a new section in the guidance related to capturing nonfinancial data, such as facility, staffing, and patient metrics.
On the general HHS website, the portal to submit documentation is expected to open on January 15, 2021, with the initial deadline to submit reporting on February 15, 2021. Final reporting for expenses through June 30, 2021, has a current due date of July 31, 2021. These deadlines are subject to change.
The latest guidance applies to the PRF General and Targeted Distributions.
Per the guidance, the reporting requirements don’t apply to HRSA Uninsured Program payments, the Nursing Home Infection Control distribution, or the Rural Health Clinics Testing distribution. Although not in the released guidance, it’s important to also know the guidance doesn’t apply to the Small Business Administration’s (SBA) Paycheck Protection Program (PPP) loans or the Medicare Accelerated Advance Payments. These funds will have a separate reporting process.
HHS PRF reporting will be required for:
- Health care-related expenses attributable to coronavirus within two categories—general and administrative and health care-related operating expenses.
- PRF payment amounts not fully expended on health care-related expenses attributable to coronavirus are then applied to lost revenue. The lost revenue is represented as a negative change in year-over-year net patient care operating income (patient care revenue less patient care related expenses for the reporting entity that received the funding), net of health care-related expenses attributable to coronavirus as calculated in item number one above. Recipients may apply PRF payments toward lost revenue, up to the amount of their 2019 net gain from health care-related sources. Additionally, recipients that reported negative net operating income from patient care in 2019 may apply PRF amounts to lost revenue up to a net zero gain or loss in 2020.
Entities that received between $10,000 and $499,999 in aggregated PRF payments are required to report on item number one above, in the two aggregated categories, whereas recipients of $500,000 or more are required to provide more detailed information that’s broken out by sub-categories.
Revenue and Expenses
Revenue and expense information will be reported by-quarter for calendar years 2019 and 2020. Revenue will be reported by payer whereas expenses will be reported by the category.
Other Financial Assistance
Recipients will report on the amount of other financial assistance received from the following, among others:
- PPP loans
- Federal Emergency Management Agency’s (FEMA) CARES Act assistance
- CARES Act Testing assistance
Additional nonfinancial data will be collected, including personnel, patient, and facility metrics.
Organizations that expend $750,000 or more in aggregated federal financial assistance during their fiscal year are subject to single audit requirements per 45 CFR 75.501. As part of the reporting requirements, recipients must indicate if they’re subject to single audit requirements in 2020 and whether their auditors selected the PRF to be within scope of the single audit (if known at the time the Organization submits their report).
We’re Here to Help
To learn more about new reporting requirements, contact your Moss Adams professional.
You can also read our article about the new cost report guidance from CMS, which covers COVID-19 funding and how to report PRF, SBA’s PPP loans, and payroll tax deferral. See the full collection of resources on our Health Care content hub or take a deeper dive with COVID-19-related content.
Note on COVID-19
During this unparalleled time, we’re closely monitoring the COVID-19 situation as it evolves so we can provide up-to-date guidance and support to help you combat uncertainty. For regulatory updates, strategies to help cope with subsequent risk, and possible steps to bolster your workforce and organization, please see the following resources: