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

Client Alert
January 15, 2021

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.

Provider Relief FundHealthcare LawBMD Healthcare & Hospital Law GroupAmanda L. WaeschCOVID-19 Relief
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HHS Provider Relief Funds Reporting Requirements: Important Updates Every Provider Should Know

November 4, 2020HHS 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.Client Alert

Should I Apply for Phase 3 Funds? Important Considerations Every Provider Should Know

November 2, 2020On October 1, 2020, the Department of Health and Human Services (“HHS”) announced an additional $20 billion in new funding for providers through a Phase 3 distribution. Importantly, providers that previously received HHS Provider Relief Funds or already received payments of approximately 2% of annual revenue from patient care are eligible to apply. Eligible providers have until November 6, 2020 to apply for these Phase 3 Funds. However, the question from providers continues to be: Should I Apply for Phase 3 Funds?Client Alert

CISA Ransomware Practices

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