New Provider Relief Funding and 60-day Grace Period for Reports on Funding Previously Received

Foley & Lardner LLP

Foley & Lardner LLPSince Spring 2020, the Department of Health and Human Services (HHS) has distributed more than $150 billion in Provider Relief Funds (PRF) to health care providers that can be used to reimburse their expenses attributable to COVID-19 or to make up for revenue losses incurred during the pandemic. Providers are required to submit reports on the first distributions of PRF funding by September 30, 2021.

On September 10, 2021, HHS, through the Health Resources and Services Administration (HRSA), announced $25.5 billion in new funding available for health care providers affected by the COVID-19 pandemic. Moreover, HHS also announced a 60-day grace period to help providers come into compliance with the September 30, 2021 PRF reporting requirements.

$25.5 Billion in COVID-19 Provider Funding 

The $25.5 billion in funding will be allocated as follows: $17 billion for “Phase 4” of the PRF General Distribution for providers who can document revenue loss and expenses associated with the pandemic between July 1, 2020 and March 31, 2021; and $8.5 billion in American Rescue Plan (ARP) resources for providers who serve rural Medicaid, Children’s Health Insurance Program (CHIP), or Medicare patients. According to HRSA, 75% of the Phase 4 payments will be distributed based on revenue losses and COVID-related expenses between July 1, 2020 and March 31, 2021, with smaller providers reimbursed at a higher rate than larger providers. The remaining 25% will be used for bonus payments for providers who serve Medicaid, CHIP, and/or Medicare patients.

For the ARP rural distribution, HRSA will make payments to providers based on the amount of Medicaid, CHIP and/or Medicare services they provide to patients living in rural areas. HRSA will use existing Medicaid, CHIP, and Medicare claims data in calculating payments.

Providers can apply for both programs in a single application beginning on September 29, 2021. To ensure that the funds are used for patient care, HHS is requiring PRF recipients to notify the HHS Secretary of any merger with, or acquisition of, another health care provider during the period in which they can use the payments.

60-Day Grace Period for PRF Reporting

HHS also announced a 60-day grace period to help providers comply with their PRF Reporting requirements if they fail to meet the initial deadline on September 30, 2021. Specifically, HHS stated that while the deadlines to use funds and the reporting time period remain unchanged, HHS will not initiate collection activities or similar enforcement actions against noncompliant providers during this grace period. The grace period should help relieve time pressure for those PRF recipients struggling to prepare their reports before September 30, 2021.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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