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HHS Issues Revised Provider Relief Fund Reporting Requirements for “Lost Revenue”

10/26/2020 Dave Macke

On September 19, 2020, the Department of Health and Human Services (HHS) issued the long awaited reporting requirements for the Coronavirus Aid, Relief, and Economic Security (CARES) Act Provider Relief Funds (PRF). These guidelines instantly drew opposition from many industry stakeholders and Members of Congress. The major focus point was the HHS definition of “Lost Revenue.” As a result of the significant opposition from stakeholders and Members of Congress, HHS released revised reporting requirements on October 22, 2020. The most significant change is a modified definition of lost revenue. At first glance, many in the industry are pleased with the change but not all providers will benefit from the change.

Providers who are subject to reporting requirements to keep PRF funds are those who received in excess of $10,000 in the aggregate, excluding Nursing Home Infection Control or the Rural Health Clinic Testing distributions. Per the Centers for Disease Control and Prevention (CDC) website for the listing of all providers that have attested to receiving funds and agreed to the terms and conditions, as of October 20, 2020, there are 362,312 providers on the list for a total amount of almost $95 billion. The number of providers that received in excess of $10,000 is 173,577.

Reporting Guidance on Use of Funds – REVISED

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, net of the healthcare related expenses attributable to coronavirus calculated under step 1. 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 a net change in patient care lost revenues, net of healthcare related expenses is a change from a net patient care operating income that was in the September 22 requirements.

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 Expenses Attributable to Coronavirus

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

Mortgage / Rent – Monthly payments related to mortgage or rent for a facility.

  1. Insurance – Premiums paid for property, malpractice, business insurance, or other insurance relevant to operations.
  2. 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. ***
  3. Fringe Benefits – Extra benefits supplementing an employee’s salary, which may include hazard pay, travel reimbursement, employee health insurance, etc.
  4. Lease Payments – new equipment or software lease.
  5. Utilities / Operations – Lighting, cooling/ventilation, cleaning, or additional third party vendor services not included in “Personnel”.
  6. 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.

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.

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.

Note: 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.

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

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

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. 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).

Key Dates

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

HHS News Release


Reporting Requirements Policy Update


Post-Payment Notice of Reporting Requirements – October 22, 2020


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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