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Provider Relief Funds – Continued Confusion Regarding Reporting Requirements and Lost Revenues

WARNING: Take a deep breath before you read this! And then pat yourself on the back for your continued resilience and ability to adapt and pivot during this unprecedented time! 2021 is seeming to prove to be a continuation of 2020 with one constant – change and uncertainty. In Fall 2020, HHS issued multiple rounds of guidance and FAQs regarding the reporting requirements for the Provider Relief Funds, the most recently published notice being November 2, 2020 and December 11, 2020. Specifically, the reporting portal for the use of the funds in 2020 was scheduled to open on January 15, 2021. Although there was much speculation as to whether this would occur. And, as of the date of this article, the portal was not opened.

The aggregate HHS guidance regarding the reporting requirements basically required providers to report (1) expenses attributable to COVID, and (2) lost revenues attributable to COVID. While those in the healthcare industry would generally agree that expenses attributable to COVID have been predictably defined by HHS, controversy continues to surround the definition of lost revenues attributable to COVID. Under the most recent guidance that we have available, lost revenues is defined as the year-over-year net change in patient care revenues from 2019 to 2020 plus additional assistance received in 2020 (including all PPP, EIDL, and other federal, state, and local assistance). Of course, this changed from guidance issues in early Fall 2020 and June 2020. 

On December 27, 2020, the Federal Appropriations Act was signed into law. While this is largely hailed as a COVID-19 relief package that served as a follow up to the Paycheck Protection Program, it did contain some changes to the Provider Relief Funds and the calculation of lost revenues. 

Providers received Phase 1 funds through automatic payments electronically deposited in their accounts based on 2019 Medicare fee-for-service payments. During Phase 1, providers had the option to apply for additional funds to supplement lost revenue, up to 2% of 2019 total collections by submitting additional practice information – including lost revenues. Providers could use a reasonable accounting methodology to calculate lost revenues where such methodologies included the difference between the provider’s 2020 budget and actual 2020 revenues or comparison of current revenues to previous revenues for the same time period. 

The definition of lost revenues was further revised in September 2020, steering away from a “reasonable accounting methodology” and moving towards a year-over-year analysis. And then finally settling on the definition contained in the November 2, 2020 guidance with a year-over-year analysis of revenues from patient care, but adding back in other assistance received in 2020. The guidance did not include any allowances for material changes in the provider’s business such as the addition or loss of providers, locations, or service lines. 

Through the new legislation, Congress appears to be sending a message back to HHS to revise the definition of lost revenues to allow providers to use a “reasonable accounting methodology” instead of a “one-size fits all” calculation. It will also be interesting to see whether HHS will exclude the additional assistance received in 2020 from the calculation.

HHS did update the FAQs on January 12, 2021 after the Federal Appropriations Act was passed, but these updates did not address the lost revenue calculations. So we anticipate that the portal will not open as anticipated and that additional changes will be forthcoming.  As a next step, providers should continue to be on the lookout for additional updates regarding the Provider Relief Funds. Providers should also continue to gather information related to expenses, revenues, and additional assistance received in 2020 in anticipation of reporting requirements. We can definitely count on one thing – CHANGE!   

If you have any questions, please contact BMD Healthcare and Hospital Law Member Amanda Waesch at alwaesch@bmdllc.com or 330-253-9185.

COVID, Privacy and More! New Challenges for Physicians in 2021

While hopefully we are coming out of the pandemic, the legal repercussions related to legislative initiatives and other actions during that time continue to apply to businesses in general and healthcare practices. It is a helpful reminder that practices make certain that they maintain accurate records in order to satisfy the reporting requirements under the various COVID-related bills and protect yourself from future employment claims.

Banking and Cannabis: Bank Lending, The Next Frontier

A fortuitous combination of developments and circumstances present the banking and cannabis industries a large opportunity to enhance each of their respective bottom lines: conventional bank lending, payment processing, treasury management and other services, and bank administered SBA and revenue bond financing to cannabis businesses.

EKRA Updates: COVID-19 Testing, Employment Agreements, and More

Ever since the Eliminating Kickbacks in Recovery Act (“EKRA”) was passed by Congress in 2018, we have been waiting to see how the law is interpreted and ultimately enforced. As a reminder, EKRA seeks to eliminate kickbacks in return for patient referrals to facilities that treat those overcoming addiction, such as recovery homes, clinical treatment centers, and laboratories. (NOTE: EKRA applies to all laboratories, not just those related to addiction treatment.) It is essentially an expansion of the Anti-Kickback Statute, which only applies to those services that are reimbursable through federal healthcare programs such as Medicare and Medicaid, to now also cover services reimbursable through private insurers.

New Interpretation of the Fair Debt Collection Practices Act Rocks the Industry

It’s not lost on us that our interpretation of § 1692c(b) runs the risk of upsetting the status quo in the debt-collection industry. This quote from the Eleventh Circuit Court of Appeal in its April 21, 2021 opinion from the case of Hunstein v. Preferred Collection and Management Services, Inc. is possibly the biggest understatement in the history of the Fair Debt Collection Practices Act. At a minimum, the Eleventh Circuit’s opinion has sent shockwaves and fear throughout multiple sectors of the financial services industry.

Construction Industry Trends and Predictions Through 2021 and Beyond: Insurance and Emerging Threats

A 2021 survey identified three key issues impacting the construction industry in 2021: (1) the financial health of contractors; (2) the continuing risk of the pandemic; and (3) technology driving productivity, but also increasing the risk of cybersecurity threats. With this backdrop, insurance premiums in the construction industry are generally on the rise in 2021.