Issues with Provider Relief Fund disbursements get a hearing in Becerra appearance before Congress

• Xavier Becerra, secretary of Health and Human Services, faced questions about the Provider Relief Fund during a May 12 budgetary hearing before a House subcommittee.
• The June 30 deadline for PRF recipients to use their funds could pose problems, members of Congress and provider advocates say.
• HFMA and various hospital associations have signed letters requesting a postponement of the deadline and the prompt release of remaining funds.

As healthcare provider advocates push for accommodations in Provider Relief Fund distributions, their  concerns are on the radars of Congress and the secretary of Health and Human Services (HHS).

Xavier Becerra, head of HHS, appeared before the House Health Subcommittee on May 12 to discuss the proposed FY22 budget. He was asked early in the session about ways to improve the Provider Relief Fund (PRF) disbursement process.

Rep. Frank Pallone (D-N.J.) said the formulas for the various distributions since April 2020 have not always been effective at targeting funding “to the areas that have the greatest need.”

Becerra replied that he “couldn’t agree more” and pledged “to demand accountability and transparency” during the disbursement of the remaining funds. However, he did not provide a time frame in which the funds would be distributed.

Billions remain in the fund

The CARES Act and subsequent legislation have authorized $178 billion for distribution to providers. Funds can be used to cover healthcare-related expenses and lost revenue stemming from COVID-19.

In early March, the Health Resources and Services Administration stated that $24 billion remained in the fund after three 2020 general distributions and various targeted distributions. The following month, the COVID-19 relief legislation known as the American Rescue Plan authorized $8.5 billion in PRF funding for rural providers.

No distributions have been announced since, although HHS recently allocated an unspecified amount to the Coverage Assistance Fund. That program was established to reimburse providers for administering the COVID-19 vaccine to individuals with health plans that either don’t cover the vaccine or require cost-sharing.

The 2020 year-end Consolidated Appropriations Act (CAA) required that 85% of the remaining PRF allocation be reserved for distribution based on revenue losses and changes in operating expenses that were incurred in the last two quarters of 2020 and the first quarter of 2021.

Rep. Lori Trahan (D-Mass.) described the situation at Lawrence General Hospital in Massachusetts, a safety-net facility. Even after receiving PRF assistance, “The hospital is in a fragile financial position, and I can only imagine this is the case for many safety-net hospitals serving similar populations across the country.”

Looming deadline to use the funds

Providers initially faced a Feb. 15 deadline to report on their use of PRF grants. In the final days of the Trump administration, HHS indefinitely pushed back the deadline. The Biden administration has not announced a new deadline and, in fact, has not announced a date by which recipients must register in the reporting portal.

Nonetheless, recipients still face a June 30 deadline to spend their funds unless HHS authorizes a delay. After that date, a provider would have to return its remaining funds.

“I’ve heard from several hospitals about the uncertainty surrounding this deadline given the changes in reporting guidelines,” said Rep. Billy Long (R-Mo.).

Among those changes, the CAA offered flexibility in reporting lost revenue. HHS earlier had directed providers to report the metric by comparing actual revenue in 2020 and 2019. The legislation gave providers the option to use budgeted revenue (based on budgets adopted by March 2020). Two months earlier, HHS also clarified that lost revenue, as opposed to net-income loss, is the pertinent metric.

The changes could have affected a provider’s calculation of how much of its funds it is eligible to spend, adding to the strain of having to decide on using the funds by June 30.

Becerra said HHS would work with providers to consider the need to relax the deadline.

“We’re going to be working hard to make sure that we provide those healthcare providers, who work very hard, with the resources they need,” Becerra said. “Some of those folks have asked for an extension. We’re looking at all of that very, very closely.

“We’re going to be driven by the facts in this case to make sure those providers who have a need get those needs addressed. That’s why [Congress] passed the money, and that’s why we’re going to make sure that we can dispense it in a way that’s not only accountable but [that ensures] it really does go to those who need it most.”

Provider advocates seek adjustments

Various hospital groups signed a letter to Becerra seeking leeway in the June 30 deadline. The groups hope the deadline can be pushed back to align with the end of the public health emergency (PHE).

They also asked that HHS “expedite distribution of the remaining PRF resources.”

“Our hospitals will continue to face challenges beyond June 30 in providing adequate staffing, supplies, personal protective equipment, testing and vaccinations,” the groups wrote. “We therefore request that you intercede on behalf of our hospitals and health systems and provide critical assistance by expending the remaining PRF resources and tying the utilization date to the PHE.”

Previously, HFMA was a signatory on a letter to Marvin Figueroa, director of the HHS Office of Intergovernmental and External Affairs, asking that the deadline for spending funds be extended by 18 months to Dec. 31, 2022.

The associations also sought:

• Expeditious release of the remaining PRF funding
• Flexibility in reporting and oversight
• Availability of an HHS contact to answer pertinent questions

“Due to the role health care plays at any level of our economy, the stability of health care providers, ranging from hospital systems to physician practice groups or post-acute and long-term care providers, is critical to our national economic recovery,” HFMA and the co-signing organizations wrote. “Every effort also must be made to ensure an adequate number of quality providers remain after the pandemic by ensuring financial stability.”