Last week, HHS announced the distribution of approximately $9 billion in CARES Act Provider Relief Fund (PRF) Phase 4 payments. The average payment for small providers is $58,000, for medium providers is $289,000, and for large providers is $1.7 million. HHS has already started making payments and will continue to do so in 2022. Furthermore, HHS released twelve new PRF Frequently Asked Questions (FAQs) covering a wide range of topics, including mergers and acquisitions, tax credits, guidance for providers that file bankruptcy petitions, and more.

The new FAQs broadly discuss the following general categories: (1) general information; (2) terms and conditions; (3) ownership structures and financial relationships; (4) auditing and reporting requirements; (5) non-financial data; and (6) miscellaneous. Notably, the Terms and Conditions for Phase 4 require that recipients that receive payments greater than $10,000 notify HHS during the applicable Reporting Time Period of any mergers with or acquisitions of any other healthcare provider that occurred within the relevant Payment Received Period. HRSA considers changes in ownership, mergers/acquisitions, and consolidations to be reportable events. If a Reporting Entity that received a Phase 4 General payment indicates when they report on the use of funds that they have undergone a merger or acquisition during the applicable Payment Received Period, this information will be a component that is factored into whether an entity is audited.

Additionally, and if applicable, PRF recipients must immediately notify HRSA about their bankruptcy petition or involvement in a bankruptcy proceeding. When notifying HRSA about a bankruptcy, recipients must submit the name that the bankruptcy is filed under, the docket number, and the district where the bankruptcy is filed to PRFbankruptcy@hrsa.gov. Federal financial obligations will be resolved in accordance with the applicable bankruptcy process, the Bankruptcy Code, and applicable non-bankruptcy federal law.

The FAQs also explain that state and federal tax credits (e.g., employee retention tax credits) should not be considered a revenue source. They, therefore, should not be reported as “other assistance received.”