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Are You Ready for the Provider Relief Fund Reporting?

01/06/2021 Dave Macke

Now that the end of the year has passed, it is time to get ready to file your initial Provider Relief Fund Report to the Department of Health and Human Services (HHS) for coronavirus related expenses and lost revenues. Based on the reporting guidelines, the first report covers the period ended December 31, 2020.  The reporting portal opens January 15, 2021, and the deadline to file is February 15, 2021.  The most recent reporting guidelines published by HHS is November 2, 2020.

Reporting Guidance on Use of Funds

Recipients will report their use of PRF payments using their normal method of accounting (cash or accrual basis), by submitting the following information:

1. Healthcare related expenses attributable to coronavirus that another source has not reimbursed and is not obligated to reimburse, which may include General and Administrative (G&A) or healthcare related operating expenses (further defined within the data elements section below).

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

If recipients do not expend PRF funds in full by the end of calendar year 2020, they will have an additional six months in which to use remaining amounts toward expenses attributable to coronavirus but not reimbursed by other sources, or to apply toward lost revenues in an amount not to exceed the difference between 2019 and 2021 actual revenue. For example, the reporting period January – June 2021 will be compared to the same period in 2019, or January – March 2021 will be compared to the same quarter in 2019.

The use of cash basis or accrual basis financial information is an important clarification that was not previously included in the guidelines.  Some providers that file a Medicare Cost Report are required to be on the accrual basis but many other providers are on the cash basis of accounting. 

There are certain data elements that are required in the reporting process.  These are defined in detail in the reporting requirements.

Demographic Information

  1. Reporting entity
  2. Tax Identification Number
  3. National Provider Identifier
  4. Fiscal Year-End Date
  5. Federal Tax Classification

Expenses Attributable to Coronavirus Not Reimbursed by Other Sources

Expenses will need to be recorded in two aggregated categories:  General and Administrative expenses and Healthcare Related Expenses.  If recipients do not expend PRF funds in full by the end of calendar year 2020, they will have an additional six months in which to use remaining amounts toward expenses attributable to coronavirus but not reimbursed by other sources, or to apply toward lost revenues.

If the provider received between $10,000 and $499,999, expenses are required to be reported in two aggregated categories: (1) G&A expenses and (2) other healthcare related expenses.   For those providers that received $500,000 or more, the reporting requirements are more detailed in the two categories using the subcategories outlined below.

General and Administrative (G&A) Expenses Attributable to Coronavirus

The actual G&A expenses incurred over and above what has been reimbursed by other sources.

  1. Mortgage / Rent – Monthly payments related to mortgage or rent for a facility.
  2. Insurance – Premiums paid for property, malpractice, business insurance, or other insurance relevant to operations.
  3. Personnel – Workforce-related actual expenses paid to prevent, prepare for, or respond to the coronavirus during the reporting period, such as workforce training, staffing, temporary employee or contractor payroll, overhead employees, or security personnel. ***
  4. Fringe Benefits – Extra benefits supplementing an employee’s salary, which may include hazard pay, travel reimbursement, employee health insurance, etc.
  5. Lease Payments – new equipment or software lease.
  6. Utilities / Operations – Lighting, cooling/ventilation, cleaning, or additional third party vendor services not included in “Personnel”.
  7. Other General and Administrative expenses – costs not captured above that are generally considered part of overhead structure.

*** The Terms and Conditions associated with each PRF payment do not permit recipients to use PRF money to pay any salary at a rate in excess of Executive Level II which is currently set at $197,300. For the purposes of the salary limitation, the direct salary is exclusive of fringe benefits and indirect costs. The limitation only applies to the rate of pay charged to PRF payments and other HHS awards. An organization receiving PRF may pay an individual’s salary amount in excess of the salary cap with non-federal funds.

Healthcare Related Expenses Attributable to Coronavirus

The actual healthcare related expenses incurred over and above what has been reimbursed by other sources.

  1. Supplies – Expenses paid for purchase of supplies used to prevent, prepare for, or respond to the coronavirus during the reporting period. Such items could include: personal protective equipment (PPE), hand sanitizer, or supplies for patient screening.
  2. Equipment – Expenses paid for purchase of equipment used to prevent, prepare for, or respond to the coronavirus during the reporting period, such as ventilators, updates to HVAC systems, etc.
  3. Information Technology (IT) – Expenses paid for IT or interoperability systems to expand or preserve care delivery during the reporting period, such as electronic health record licensing fees, telehealth infrastructure, increased bandwidth, and teleworking to support remote workforce.
  4. Facilities – Expenses paid for facility-related costs used to prevent, prepare for, or respond to the coronavirus during the reporting period, such as lease or purchase of permanent or temporary structures, or to modify facilities to accommodate patient treatment practices revised due to coronavirus.
  5. Other Healthcare related expenses – Any other actual expenses, not previously captured above, that were paid to prevent, prepare for, or respond to the coronavirus.

Total Calendar Year Expenses for 2019 and 2020, in the following categories, with quarterly break down (e.g., January–March 2019, April–June 2019, etc.).

General and Administrative Expenses (2019 and 2020)

G&A expenses may include items such as monthly payments related to mortgage or rent for facility where reporting entity provides patient care services, other monthly finance charges for real property and/or property taxes, insurance premiums for property, employee health insurance, or malpractice insurance, overhead salaries, healthcare and contractor salaries, fringe benefits, lease payments, lighting, cooling/ventilation, cleaning, vendor services purchased from third party vendors, consulting support, legal fees, audit and accounting services, food preparation and supplies, logistics and transport or other costs not captured above, such as debt financing, for the relevant calendar year.

Healthcare Related Expenses (2019 and 2020) Healthcare related expenses may include items such as supplies, equipment, IT, facilities, employees, and other healthcare related costs/expenses for relevant calendar year.

It is not clear why this breakdown in expenses is required.  The initial lost revenue definition was based on a change on net operating income.  When the definition of lost revenue was changed on October 22, 2020, to negative change in net patient revenue before expenses, this would seem to make the quarterly breakdown reporting in expenses not applicable.  However, this is still listed in the reporting guidance from HHS.  

Lost Revenue Attributable to Coronavirus

In this section, Reporting Entities provide information used to calculate lost revenues attributable to coronavirus, represented as a negative change in year-over-year actual revenue from patient care related sources. Revenues and expenses in this section include all lost patient care revenues and patient care cost/expense impacts.

Total Revenue / Net Charges from Patient Care Related Sources (2019 and 2020):

Revenue/net charges from patient care (prior to netting with expenses) for the calendar years 2019 and 2020. Calendar year actual revenues will be entered by quarter (e.g., January–March 2019, April–June 2019, etc.).

Total revenue is net of uncollectible patient service revenue recognized as bad debts.

The use of a negative change in patient care revenues prior to netting with expenses is a change from a net patient care operating income that was in the original September 22 requirements.

Net Charges from Patient Care Related Sources means health care, services and supports, as provided in a medical setting, at home, or in the community. It should not include: 1) insurance, retail, or real estate values (except for SNFs, where that is allowable as a patient care cost), or 2) grants or tuition.

While revenue information will be reported quarterly, HHS will make the determination on lost revenue on the basis of the full calendar year.  Thus, reductions in net patient revenue during a portion of the year may be offset by increases in other parts of calendar year 2020.

Revenue from Patient Care Payer Mix (2019 and 2020)

Revenues also need to be reported by patient care payer mix.  This will be based on actual revenues / net charges.  The report will need to capture revenue in the following categories:

  1. Medicare Part A + B
  2. Medicare Part C
  3. Medicaid
  4. Commercial Insurance
  5. Self-Pay (No Insurance)
  6. Other

Other Assistance Received (2020)

This category includes the reporting of non Provider Relief Funds revenues.

  1. Treasury, Small Business Administration (SBA) and the CARES Act / Paycheck Protection Program (PPP)
  3. CARES Act Testing
  4. Local, State, and Tribal Government Assistance
  5. Business Insurance
  6. Other Assistance

Did the Stimulus Bill change the definition of lost revenue?

The recent Stimulus Bill that was passed in the Congress and signed by the President on December 27, 2020, contained a change in the definition of lost revenue.  This is contained on page 1843 of the legislation.

“Provided further, That, for any reimbursement from the Provider Relief Fund to an eligible health care provider for health care related expenses or lost revenues that are attributable to coronavirus (including reimbursements made before the date of the enactment of this Act), such provider may calculate such lost revenues using the Frequently Asked Questions guidance released by the Department of Health and Human Services in June 2020, including the difference between such provider’s budgeted and actual revenue budget if such budget had been established and approved prior to March 27, 2020.”

It is not clear if this makes the initial definition lost revenue of change in net patient revenue before expenses obsolete.  Many providers may not have a budget.  The legislation does state that “such provider may calculate” which is not the same as shall or must.  Thus it would appear that this would be an alternative method but we cannot be sure until HHS releases further guidance.  We have been told that HHS is diligently working to reconcile the latest PRF Congressional guidance as it pertains to reporting requirements and will soon provide updated information and guidance to recipients of the PRF Program.  There has been no word if there will be any extension to the filing deadline.

Additional Data

HHS is also requesting additional non-financial data on a quarterly basis.  This includes facility, staffing and patient care data.

  1. Personnel Metrics – Total personnel by labor category (full-time, part-time, contract, other: recipient must define), total re-hires, total new hires, and total personnel separations by labor category
  2. Patient Metrics – Total number of patient visits (in-person or telehealth), total number of patients admitted, total number of resident patients
  3. Facility Metrics – Total available staffed beds for medical/surgical, critical care, and other beds

Reporting Entities with unused funds after December 31, 2020, must submit a second and final report no later than July 31, 2021, that includes patient care related revenue amounts earned January 1–June 30, 2021.

Recent Developments / FAQs

During December, HHS added or modified some FAQs that are particularly noteworthy relating to PRF Reporting.

Fundraising revenues, grants or donations – Lost Revenue?

Q: Should providers include fundraising revenues, grants or donations when determining patient care revenue? (Added 12/4/2020)

A: To calculate lost revenues attributable to coronavirus, providers are required to report revenues received from Medicare, Medicaid, commercial insurance, and other sources for patient care services.  Other sources include fundraising revenues, grants or donations if they contribute to funding patient care services.  

Interest earned on Provider Relief Funds?

Q: If a provider returns a Provider Relief Fund payment to HHS, must it also return any accrued interest on the payment?  (Modified 12/11/2020)

A: Yes, for Provider Relief Fund payments that were held in an interest-bearing account, the provider must return the accrued interest associated with the amount being returned to HHS.  However, if the funds were not held in an interest-bearing account, there is no obligation for the provider to return any additional amount other than the Provider Relief fund payment being returned to HHS.  HHS reserves the right to audit Provider Relief Fund recipients in the future to ensure that payments that were held in an interest-bearing account were subsequently returned with accrued interest.

Are taxes an allowable expense?

Q: Can providers use Provider Relief Fund payment to pay taxes?  (Added 12/11/2020)

A: Yes. HHS considers taxes imposed on Provider Relief Fund payments to be “healthcare related expenses attributable to coronavirus” that are reimbursable with Provider Relief Fund money, except for Nursing Home Infection Control Distribution payments.

Single Audit Status

Reporting Entities that expended $750,000 or more in aggregated federal financial assistance in 2020 (including PRF payments and other federal financial assistance) are subject to Single Audit requirements, as set forth in the regulations at 45 CFR 75.501. This does not include Medicare and Medicaid funds.  Recipients must indicate if they are subject to Single Audit requirements in 2020 and, if yes, whether the auditors selected PRF payments to be within the scope of the Single Audit (if known at the time the Reporting Entity submits report).

Recipients (both non-federal entities and commercial organizations) of the General and Targeted Distributions of the Provider Relief Fund are subject to 45 CFR 75 Subpart A (Acronyms and Definitions) and B (General Provisions), subsections §§75.303 (Internal Controls), and 75.351-.353 (Subrecipient Monitoring and Management), and Subpart F (Audit Requirements). In addition, the terms and conditions of the PRF payments incorporate by reference the obligation of recipients to comply with the requirements to maintain appropriate financial systems at 75.302 (Financial management and standards for financial management systems) and the requirements for record retention and access at 75.361 through 75.365 (Record Retention and Access).

In December, the White House’s Office of Management and Budget released guidance with instructions on how to audit money received under its COVID-19 relief distributions, including the CARES Act.  The rule extended the audit deadline an extra three months.  Single Audits are normally due nine months after the organization’s fiscal year end.  That means an organization with a June 30, 2020 year end would normally have to file by March 31, 2021.  The three month extension applies to organizations whose original due dates were between October 1, 2020 and June 30, 2021.

Key Dates to Remember

January 15, 2021: reporting system opens for providers

February 15, 2021: first reporting deadline for all providers on use of funds

July 31, 2021: final reporting deadline for providers who did not fully expend PRF funds prior to December 31, 2020

Links to HHS guidance

Reporting Requirements and Auditing  


Post-Payment Notice of Reporting Requirements – November 2, 2020


Provider Relief Fund – Allowable Expenses Overview – December 11, 2020


White House Office of Management and Budget Single Audit Guidance


CDC Listing of Providers for the HHS Provider Relief Fund


VonLehman will be providing assistance to providers in this reporting.

For any questions related to the CARES Act Provider Relief Fund, or healthcare reimbursement in general, contact Dave Macke, VonLehman’s reimbursement specialist, at dmacke@vlcpa.com or 800.887.0437.

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