On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES) was passed and signed into law. This bill included $100 billion in funding to a Provider Relief Fund (PRF) for aid during the COVID-19 pandemic. The fund is managed by the Office of the Secretary of the Department of Health and Human Services (HHS) and dollars are held within its Health Resources Services Administration (HRSA).
These funds have been distributed to healthcare providers and facilities for financial assistance and do not have to be repaid as long as the provider meets the PRF’s terms and conditions and demonstrates financial need through reporting. When providers requested the funds, they attested that the funds would only be used to prevent, prepare for, and respond to COVID-19.
In the video below, KHA Accountants Partner, Jennifer Sicking walks providers through reporting requirements, updates on details with payments, audit requirements and the upcoming deadline.
As of July 2021, the HHS has released the reporting deadlines and can be found on our website here.
Highlights of the reporting requirements for the PRF are as follows:
- HHS modified the calculation of “lost revenues” attributable to the COVID-19 emergency, defining “lost revenues” as a year-over-year change in net patient care operating income, which is equal to patient care revenue for the year minus patient care-related expenses for the same year. This is a significant change from the previous FAQ, which was less definite, referring to “lost revenues” as any revenue a healthcare provider loses due to COVID-19, without incorporating expenses. Recipients who relied on this prior guidance need to review and evaluate the effect of the modified definition.
- Eligible expenses should be reported, but only to the extent the expense is not reimbursed or obligated to be reimbursed by other sources.
- Recipients of between $10,000 and $499,999 in aggregated PRF payments will report healthcare-related expenses attributable to coronavirus in two aggregated categories: general and administrative expenses and other healthcare-related expenses. Those who received $500,000 or more in payments will be required to provide more detailed information.
- Entities that received more than $750,000 in PRF payments are subject to audit requirements.
As your trusted advisors, we are committed to keeping you well-informed with regard to HHS and financial relief offered for healthcare providers and facilities. Please sign up for updates as we will continue to publish information on any new relief targeted at the healthcare industry.
These sources are simply included for informational purposes. KHA Accountants, PLLC, its partners and others do not provide any assurance as to the accuracy of these items or the information included therein. As such, KHA Accountants, PLLC cannot be held liable for any information derived from referenced sources. This is intended for illustrative and discussion purposes only.