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HHS Provider Relief Funds Reporting Requirements: Important Updates Every Provider Should Know

HHS continues to revise its reporting requirements for the use of the Provider Relief Funds. Providers with more than $10,000 in Provider Relief Fund payments must report on the use of the funds through December 31, 2020. The reporting window will begin on January 15, 2021 and providers must complete reporting obligations for FY 2020 by February 15, 2021 through a portal designed by HHS. However, providers that have unexpended funds as of December 31, 2020, will have an additional 6 months to use the remaining funds through June 30, 2021. These providers must submit a second and final report no later than July 31, 2021.  

Providers must use the Provider Relief Funds for increased healthcare related expenses attributable to COVID-19 or lost revenues due to COVID-19. HHS has made clear that providers that do not have or do not anticipate that they will have eligible expenses or lost revenue in excess of the Provider Relief Funds must return the funds by July 31, 2021. Providers must carefully calculate increased expenses attributable to COVID-19 and lost revenue due to COVID-19 in accordance with the new guidance issued by HHS through a 2-step analysis.  

Step 1:  Calculate Healthcare Expenses Attributable to COVID-19

First, providers must calculate healthcare expenses that are (1) attributable to COVID-19, and (2) not reimbursed by another source or not obligated to be reimbursed by another source. The healthcare expenses are divided into two categories: General and Administrative (G&A expenses) and healthcare-related operating expenses. The intent of the Provider Relief Funds is to reimburse marginal increased expenses due to COVID-19. Providers that received between $10,000 and $499,999 in aggregate Provider Relief Funds will only need to report healthcare related expenses attributable to COVID-19 less other sources of reimbursement (insurance payments, government assistance, etc.) separately in the two categories of G&A expense and healthcare-related operating expenses. Providers that received $500,000 or more in Provider Relief Funds will be required to report more detailed expense information using worksheets that will be in the portal.  

G&A expenses include expenses such as mortgage/rent, insurance costs, personnel and fringe benefits, lease payments, utilities and operations, etc. Provider Relief Funds can only be used to cover G&A expenses over and above amounts that have been reimbursed from other sources such as insurance payments and funds received from government sources (such as PPP, EIDL, etc.).  HHS has issued detailed FAQs regarding the definition of G&A expenses, but we expect more guidance to be issued regarding how increased expenses are calculated and offset by other monies received by the provider.  

The FAQs outline a few methodologies from which a provider can choose, based on the provider’s accounting methodology and record-keeping. The provider can net G&A expenses against insurance payments and other funds received (such as PPP, EIDL, etc.). The provider can also calculate the increased incremental cost to provide services, such as an office visit, due to incremental expense. However, the provider must offset the incremental cost by any increased reimbursement received by the provider to compensate for the increased costs. Providers can also calculate incremental expenses separately such as additional security personnel, increased hazard pay, increased utility costs of temporary facilities, etc. However, if the provider applied any funding or grants, such as PPP funds, the provider cannot apply these expenses to the Provider Relief Funds. 

Healthcare-related operating expenses include expenses such a supplies, equipment, IT, facilities, employees, and other similar expenses. The Provider Relief Funds can only be used for costs attributable to COVID-19. Providers can compare costs and expenses from 2019 to the same costs and expense from 2020 in order to determine the incremental increase due to COVID-19. For example, providers should calculate the increased costs in PPE supplies in 2019 compared to PPE supplies in 2020 (less any grant or funding received by the provider for such items). 

Step 2:  Calculate Lost Revenues Attributable to COVID-19

If providers still have unused Provider Relief Funds, the provider must allocate the Provider Relief Funds to lost revenues due to COVID-19. The updated reporting instructions reverse initial instructions that allowed providers to calculate lost revenues based on a reasonable accounting methodology through a snapshot of March and April 2020 losses and budgeted versus actual revenues. The new reporting requirements require providers to compare 2019 patient care revenues to 2020 patient care revenues and the year-over-year net change in patient care revenues from 2019 to 2020.  

Lost Revenues Equation:

     2019 Patient Care Revenues

-    2020 Patient Care Revenues

  = Net Change (maximum amount to which Provider Relief Funds can be applied)

Providers must report patient revenues by payor source (Medicare Part A+B, Medicare Part C, Medicaid/CHIP, commercial insurance, self-pay) as well as other income. Other income would include amounts received from other sources for patient care services (e.g. deductibles, copayments, coinsurance amounts).   

If the Provider Relief Funds are not fully expended by December 31, 2020, the provider can use the 6-month period from January 1, 2021-June 30, 2021 and compare patient care revenues to the same 6-month period in 2019.  

Other Reporting Requirements

Providers must also report other assistance received in 2020 such as Coronavirus Relief Funds from the Treasury, IRS, SBA, CARES Act/PPP, etc.; FEMA CARES Act; CARES Act testing; local, state, and tribal government assistance; business insurance (e.g. business interruption); and other assistance (which includes interest earned on the Provider Relief Funds). Interest must be added to the total Provider Relief Fund amount and expended towards the appropriate use of the funds. 

Providers must also provide quarterly data on non-financial information. Providers must report personnel metrics by category (full-time, part-time, contract, etc.) as well as total re-hires, total new hires, and total personnel separations – all by category. Providers must report certain patient metrics including in-person and telehealth visits, as well as total number of admissions and resident patients. In addition, providers must report on facility metrics including staffed beds for medical/surgical, critical care, and other beds. 

Finally, providers that underwent changes of ownership or certain divestitures will be required to report the change in ownership.

Providers should continue to be cognizant of their record-keeping obligations as well as balance-billing prohibitions. For more information on the HHS Provider Relief Fund Reporting Requirements, please visit our website at www.bmdllc.com. For more information on the HHS Provider Relief Funds, please contact Amanda Waesch at alwaesch@bmdllc.com or 330-253-9185.

A New Formation Solution – is the SSLC Right for Your Business?

In early January 2021, Ohio adopted Senate Bill 276 which established a Revised Limited Liability Company Act (“ORLLCA”) as Ohio Revised Code Chapter 1706, which effectively replaces the current Ohio Limited Liability Company Act (Ohio Revised Code Chapter 1706). The ORLLCA will become effective on January 1, 2022. One of the principal changes within the ORLLCA is the ability to establish “series LLCs”. Ohio becomes the 15th state to adopt a “series LLC” (“SLLC”). The below FAQs will help you better understand the mechanics and nuances of a series LLC.

Surprise! A Cautionary Tale for Out-Of-Network Billing: The No Surprises Act and the Impact on Healthcare Providers

SURPRISE! Congress passed The No Surprises Act at the end of 2020. Providers, particularly those billing as out-of-network providers, should start thinking about strategies to comply with this new law, set to take effect on January 1, 2022. In its most basic sense, the new law prohibits providers from billing patients for more than the in-network cost-sharing amount in most situations where surprise bills happen. It specifically applies to non-government payers and the amounts will be set through a process described in the new law. In particular, the established in-network cost-sharing amount must be billed for the following services:

Ohio Enacts Substantial Changes to Employment Discrimination Laws

In January, Governor Mike DeWine signed into law the Employment Law Uniformity Act, amending the employment protections in the Ohio Civil Rights Act in several significant ways. Such changes to the state’s anti-discrimination and anti-harassment laws have been considered and debated for years and finally made their way into Ohio law. What has changed for employment claims under the amended Ohio Civil Rights Act?

OHIO ADOPTS THE SERIES LLC: Implementation of Ohio’s Revised Limited Liability Company Act is Coming

On January 7, 2021, Ohio adopted S.B. 276. The new legislation establishes the Ohio Revised Limited Liability Company Act (“ORLLCA”) which effectively replaces the current Ohio LLC Act. ORLLCA will be fully effective as of January 2022. While the new law contains numerous changes to the existing LLC landscape, below is an overview of some of the key differences under the ORLLCA.

Will Federal Legislation Open Cannabis Acquisition Floodgate?

Are potential buyers quietly lobbying at federal and state levels to kick open the door to launch a new round of strategic acquisitions? Will presently pending federal legislation, the SAFE and MORE Acts, providing safe harbor for banks and re- or de-scheduling marijuana, be sufficient to mobilize into action major non-cannabis companies that previously shunned the cannabis industry due to the unknown implications of owning businesses whose activities are illegal under federal law?