AMARILLO, TX – On June 11, 2021, the Department of Health and Human Services (HHS) updated and clarified the reporting requirements surrounding the Provider Relief Fund (PRF).  This article aims to familiarize the reader with the reporting requirements and timelines involved.  Detailed issues with reporting and areas of concern will be explored in later Medtrade Monday articles.

Summary of Key Updates

• The period for use of funds is based on the date payment is received rather than requiring all payments to be used by June 30, 2021, regardless of when they were received.
• Recipients are required to report for each Payment Received Period in which they received one or more payments exceeding $10,000 in the aggregate rather than $10,000 cumulatively across all PRF payments.
• Recipients will have a 90-day period to complete reporting rather than a 30-day reporting period.
• The PRF Reporting Portal will open for providers to submit information on July 1, 2021.

Timing of Required Use of Funds and Reporting Deadlines

The following deadlines will apply to payments received.  Remember, if you received funds during more than one of the periods identified below, you will be required to report use of the funds in each applicable reporting period—it does not appear that there will be a mechanism to report funds from multiple periods in a single report.

Details of Reporting Requirements

Entities will be required to report the use of funds using their normal accounting basis (i.e., cash, accrual, or modified accrual).  The following data points, in relevant part, will be required:

• Interest earned on PRF payments
• Other assistance received by quarter which will include:
  • Department of the Treasury or Small Business Administration funding, including from the Paycheck Protection Program
  • FEMA funding
  • HHS CARES Act testing
  • Local, state and tribal government assistance
  • Business insurance proceeds
  • Other COVID-19 related assistance
• Use of General and other targeted distribution payments for general expenses, which include:
  • Mortgage/rent
  • Insurance
  • Personnel
  • Fringe benefits
  • Lease payments
  • Utilities/operations
  • Other expense generally considered to be part of general and administrative expenses
• Other health care related expenses exclusive of general expenses above including:
  • Supplies related to the pandemic
  • Required equipment
  • IT expenses
  • Facility expenses
  • Other expenses related to prevention, preparation for, and/or response to the pandemic
• Lost revenues which can be calculated in one of the following three ways:
  • Difference between actual patient care revenues
  • Difference between budgeted patient care revenue (prior to March 27, 2020) and actual revenue
  • Any other reasonable method of estimating revenues

Reporting will also require disclosure of significant additional organizational details.  You are encouraged to read the full HHS release and to stay up to date as additional reporting guidance is made available.

Single Audit Requirements

Commercial entities that received more than $750,000 in federal funds, including PRF monies, will be subject to single audit requirements.  There are two reporting options:

• A financial audit of the use of the awards in accordance with Generally Accepted Government Auditing Standards; or
• An audit in compliance with the Single Audit Act.

We expect more detail about these options and the corresponding reporting requirements to become available in the coming weeks and months.

Significant Step Forward

While there are still details to be determined, the new reporting requirements and deadlines are clearly a significant step forward.  We expect HHS to issue additional FAQs and guidance, and we encourage all suppliers to monitor the HHS website for updates.  For now, start documenting what you can and prepare to report at the appropriate time.

Jeffrey S. Baird, JD, is Chairman of the Health Care Group at Brown & Fortunato, a law firm with a national health care practice based in Texas.  He represents pharmacies, infusion companies, HME companies, manufacturers, and other health care providers throughout the United States.  Mr. Baird is Board Certified in Health Law by the Texas Board of Legal Specialization and can be reached at (806) 345-6320 or [email protected].

Kelly T. Custer, JD, is an attorney with the Health Care Group at Brown & Fortunato, a law firm with a national health care practice based in Texas. He represents pharmacies, infusion companies, HME companies and other health care providers throughout the United States. Mr. Custer can be reached at (806) 345-6343 o [email protected].