AMARILLO, TX – Since April 2020, the U.S. Department of Health and Human Services (HHS) has managed the distribution of Congress’s $100 billion Provider Relief Fund (PRF) in an evolving manner. HHS has released a number of updates regarding eligibility for PRF funding, the permitted use of the funds, and the necessity to report on the use of the funds. On September 10, 2021, HHS released another round of updates. The key elements of this communication can be separated into three distinct categories:

• the availability of an additional $25.5 billion in PFR monies;
• he establishment of a reconsideration process for Phase 3 payment calculations; and
• the grant of a 60-day grace period for Phase 1 PRF reporting.

Additional $25.5 Billion Available in COVID-19 Funding
Health care providers, whose businesses continue to struggle, can apply for an additional round of funding. HHS is making an additional $25.5 billion available in PRF payments that will be distributed to applicants through one of two programs. Beginning on September 29, 2021, providers may be eligible to apply for payments through either: (i) the Phase 4 General Distribution; or (ii) the American Rescue Plan (ARP) Rural. A single application will be available to providers regardless of the program being applied for. Different criteria will be used to determine the portion of payments made under each program.

Phase 4 General Distribution
Payments under the Phase 4 General Distribution will account for $17 billion of the available $25.5 billion PRF monies. Payment will be based on providers’ lost revenue and changes in operating expenses from July 1, 2020, to March 31, 2021. While the purpose of this distribution is to reimburse smaller providers for their lost revenue and COVID-19 related expenses at a higher rate than larger providers, HHS also intends to include bonuses for providers who serve Medicaid, CHIP, and/or Medicare patients that tend to be of lower income and with more complex medical needs.

American Rescue Plan Rural
Payments under the ARP will account for $8.5 billion of the available $25.5 billion PRF monies. Funds under this program will be available to rural providers, with distribution determined by the amount of Medicaid, CHIP, and/or Medicare services provided to patients living in rural areas. This program is specifically designed to aid rural providers who serve a disproportionate number of patients in rural communities who were greatly affected by the pandemic.

Phase 3 Payment Reconsiderations
Phase 3 distribution payments were provided to health care entities from January 1, 2021, to June 30, 2021.  Payments under this phase were generally determined by the greater of 88% of losses for the first and second quarters of 2020, or 2% of net patient revenue from a provider’s application submission, less prior PRF monies paid. It is likely that some providers disagree with HHS’s distribution calculations. Therefore, HHS has made available its payment calculation methodology and will allow providers to request a reconsideration if they believe payment was calculated incorrectly. We expect additional information regarding the reconsideration process to be made available soon.

60-Day Grace Period for PRF Reporting
Since the COVID-19 pandemic continues to make work difficult for health care providers, HHS announced that it will allow a 60-day grace period for providers to report their use of PRF monies for the first reporting time period. This means that if providers cannot meet the September 30, 2021 deadline, they will have until November 29, 2021 to comply with PRF reporting requirements.

Practically, this functions as a delay of HHS collection efforts for noncompliance with reporting requirements until after the grace period has ended. It is important to note that there have been no changes to the deadlines for which funds must be used. Despite the extension of the reporting deadline, if a provider can successfully meet the Sept. 30, 2021 deadline, it should do so.

Conclusion
While each round of updates comes as a welcome relief, this latest HHS release comes at a time when it is much needed. With the rise of the Delta variant, some providers continue to struggle financially. The availability of additional funding will help those providers continue to operate during these tough times. Similarly, with the rapid approach of the September 30, 2021 reporting deadline, the 60-day grace period allows providers additional time to come into compliance with PRF reporting requirements. Since the pandemic continues to evolve, we can reasonably expect that more updates will be released. Therefore, providers should monitor these updates and ensure continued compliance with applicable rules and regulations.

AAHOMECARE’S EDUCATIONAL WEBINAR

The Most Common HR Mistakes and How to Avoid Them

Presented by: Jeffrey S. Baird, Esq., Brown & Fortunato & Allison L. Davis, Esq., Brown & Fortunato

Tuesday, October 5, 2021

1:30-2:30 p.m. CENTRAL TIME
The people who work at your business are your biggest expense but more importantly, they are your most valuable asset. If you do not know how to properly manage the most common legal problems with your employees, then you may end up defending yourself before an administrative agency or even a court. In this webinar, we will examine the most common HR issues for DME suppliers and offer some helpful solutions. Topics that will be covered include employee leave, the problem employee, the occasional harassment or discrimination allegation, employee performance issues, employees with claims of disability, and finally, how you are allowed to pay your employees.

Register for The Most Common HR Mistakes and How to Avoid Them on Tuesday, October 5, 2021, 1:30-2:30 p.m. CT, with Jeffrey S. Baird, Esq. and Allison L. Davis, Esq. of  Brown & Fortunato.

Members:  $99
Non-Members:  $129

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. Custer can be reached at (806) 345-6343 or [email protected].

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. 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].