Healthcare Update: Provider Relief Fund Application Portal is Now Open for Phase 4 and ARP Rural Distributions

The application portal for the latest round of Provider Relief Funds is now open. This round of funding includes two components:

Phase 4 General Distribution                          $17 Billion

American Rescue Plan (ARP) Rural              $8.5 Billion

The application portal opened on September 29, 2021, and is open for four weeks.  The deadline to apply is October 26, 2021, at 11:59 pm ET.  Eligible applicants can apply for the ARP Rural funds through the same Application and Attestation Portal that is available to apply for the Phase 4 General Distribution. Providers will apply for both programs in a single application.  The funds will be allocated on a weighted proportional basis.  The amount of funding for each provider is contingent on their totals in relation to all other providers that apply.  Therefore, the allocation formula cannot be determined until the application process is closed.

The following is a summary of both allocations.

ARP Rural Distributions:  This is intended to help address the disproportionate impact that COVID-19 has had on rural communities and rural health care providers; funding will be available to providers who serve patients in these communities.

HHS will make payments to providers based on the amount and type of Medicare, Medicaid, and CHIP services provided to rural beneficiaries from January 1, 2019, through September 30, 2020.

• HHS will price Medicaid and CHIP claims data at Medicare rates, with some limited exceptions for some services provided predominantly in Medicaid and CHIP.
• Eligible billing TINs that have at least one Medicaid, CHIP, or Medicare claim for a rural beneficiary will receive a minimum payment to be determined based on applications.

Phase 4 General Distribution:  Consistent with the requirements included in the December appropriations bill, PRF Phase 4 payments will be based on providers’ changes in operating revenues and expenses from July 1, 2020, to March 31, 2021. Phase 4 will also include new elements specifically focused on equity, including reimbursing smaller providers for their changes in operating revenues and expenses at a higher rate compared to larger providers, and bonus payments based on the amount service providers furnish to Medicaid/CHIP and Medicare beneficiaries.

Approximately 75% of the Phase 4 allocation will be used for Base Payments, which are a percentage of a provider’s change in quarterly operating revenues and expenses.

• Provider size categories (Small, Medium, and Large) will be based on annual net patient care revenues and will be established after the close of the Phase 4 application.
• Large providers will receive a Base Payment amount that is a percentage of the change in their quarterly operating revenues and expenses.
• Base Payments for medium and small providers will include the same percentage of the change in their quarterly operating revenues and expenses plus a scaled supplement, with small providers receiving the greatest amount.
• No provider will receive a Base Payment that exceeds 100% of their change in quarterly operating revenues and expenses.

Approximately 25% of the Phase 4 allocation will be put towards bonus payments.

• Bonus payments will be based on the amount and type of services provided to Medicaid, CHIP, and Medicare beneficiaries from January 1, 2019, through September 30, 2020.
• HHS will price Medicaid and CHIP claims data at Medicare rates, with some limited exceptions for some services provided predominantly in Medicaid and CHIP.

Who is Eligible to Apply?

Phase 4 General Distribution: To be eligible to apply, the applicant must meet all of the following requirements:

1. Must fall into one of the following categories:
   1. Must have either directly billed, or owns (on the application date) an included subsidiary that has directly billed, their state/territory Medicaid program (fee-for service or managed care) or Children’s Health Insurance Program (CHIP) for health care-related services during the period of January 1, 2019, to December 31, 2020; or
   2. Must be a dental service provider who has either directly billed, or owns (on the application date) an included subsidiary that has directly billed, health insurance companies or patients for oral health care-related services during the period of January 1, 2019, to December 31, 2020;
   3. Must have either directly billed, or owns (on the application date) an included subsidiary that has directly billed, Medicare fee-for-service (Parts A and/or B) or Medicare Advantage (Part C) for health care-related services during the period of January 1, 2019, to December 31, 2020;
   4. Must be a state-licensed/certified assisted living facility on or before December 31, 2020;
   5. Must be a behavioral health provider who has either directly billed, or owns (on the application date) an included subsidiary that has directly billed, health insurance companies or patients for health care-related services during the period of January 1, 2019, to December 31, 2020;
   6. Must have received a prior Targeted Distribution payment.
   7. Must have either (i) filed a federal income tax return for fiscal years 2018, 2019, or 2020, or (ii) be an entity exempt from the requirement to file a federal income tax return and have no beneficial owner that is required to file a federal income tax return (e.g. a state-owned hospital or health care clinic); and
   8. Must have provided patient care after January 31, 2020; and
   9. Must not have permanently ceased providing patient care directly, or indirectly through included subsidiaries; and
   10. If the applicant is an individual that was providing patient care, have gross receipts or sales from providing patient care reported on Form 1040, Schedule C, Line 1, excluding income reported on a W-2 as a (statutory) employee.

HRSA has a new section of the website dedicated to these Future Payments.  There are a significant amount of resources at this site.

HRSA has conducted two webinars thus far and there are two more planned for October 13 and October 21.

There are application resources at the following links.

Application Instructions

Application Form

If you think you might qualify, you should apply.  There is no downside to submitting an application.

Period 1 Reporting Period “Grace Period”

You recall that HHS announced a 60-day grace period for filing Period 1 Provider Relief Funds Reports.  The deadline was September 30, 2021, but the grace period now ends on November 30, 2021.  The grace period was given in response to challenges providers are facing given the current COVID surges and natural disasters around the country.  Providers will be out of compliance if not filed by September 30, 2021, but there will be no recoupment or other enforcement actions.  Any unused funds will now be due to be repaid to HHS by December 30, 2021.

Stay tuned for more information.  VonLehman’s Healthcare Reimbursement Group will continue to keep you informed. For any questions related to the CARES Act Provider Relief Fund, or healthcare reimbursement in general, contact Dave Macke, VonLehman’s Director of Reimbursement Services, at dmacke@vlcpa.com or 800.887.0437.