A murky step in the right direction: HHS releases updated CARES Act Provider Relief Fund guidance

• The U.S. Department of Health and Human Services (HHS)  released updated CARES Act PRF guidance Oct. 22.
• In that guidance, it appears HHS partially reverts back to the June 19 FAQs, which based the amount of PRF a provider is entitled to on lost revenue as opposed to its switch to lost margin in the Sept. 19 guidance.
• The revisions also provide clarity about criteria that reporting entities must meet, and the accounting method providers must use.

The U.S. Department of Health and Human Services (HHS)  released updated CARES Act PRF guidance. While additional clarity is warranted, it appears HHS partially reverts back to the June 19 FAQs, which based the amount of PRF a provider is entitled to on lost revenue as opposed to its switch to lost margin in the Sept. 19 guidance.

Specifically, the revised guidance states:

“PRF payment amounts not fully expended on healthcare related expenses attributable to coronavirus are then applied to patient care lost revenues, net of the healthcare related expenses attributable to coronavirus calculated under step 1. Recipients may apply PRF payments toward lost revenue, up to the amount of the difference between their 2019 and 2020 actual patient care revenue.”

Despite the clarification and related edits, the revised guidance still contains lists of G&A and healthcare related expenses in the section on lost revenue (section 3/step 2). The list differs slightly from the list of G&A and healthcare expenses included in the calculation of expenses related to COVID-19 (section 2/step 3). If the “lost revenue calculation” is no longer a margin calculation, then it’s unclear why these sections weren’t deleted in the revisions.

Additional clarifications

The revisions also provide clarity in two other areas which are highlighted below:

Reporting entity: In addition to defining a reporting entity (RE) as a TIN that received at least one PRF payment, the revised instructions clarify that the RE could also be, “an entity that meets the following three criteria:

1. Is the parent of one or more subsidiary billing TINs that received General Distribution payments.

2. Has providers associated with it that were providing diagnoses, testing, or care for individuals with possible or actual cases of COVID-19 on or after January 31, 2020, and 3 Is an entity that can otherwise attest to the Terms and Conditions.”

Accounting method: For both step one (COVID-19 related expenses) and step two (lost revenue related to COVID), the updated guidance clarifies that providers will, “report their use of PRF funds using their normal method of accounting (cash or accrual basis).”

Links to updated guidance

Here are links to the updated HHS guidance and release memo.

• Oct. 22 General and Targeted Distribution Post-Payment Notice of Reporting Requirements
• Oct. 22 Reporting Requirements Policy Update