If you are like many other local healthcare organizations, you have likely participated in one or more of the governmental assistance programs that have been offered this past year. There have been several, such as the PPP (Paycheck Protection Program), Cares Act Testing, Local/State/Tribal Government and the Provider Relief Fund. The focus of this article is to alert you to the Provider Relief Fund reporting requirements that you will be responsible for.
The Provider Relief Fund with its 175 billion of allocated funds was established as part of the CARES Act to provide support to healthcare providers in the battle against the COVID-19 pandemic. Qualified healthcare providers were able to receive PRF payments for healthcare-related expenses or lost revenue due to COVID-19. The grants received are considered income for income tax purpose. In addition, the distributions do not need to be repaid to the U.S. Government, assuming providers comply with the Terms and Conditions. Recipients who receive Provider Relief Fund payments must attest to the payment by accepting or rejecting the funds within 90 days of receipt through the Provider Relief Fund Application and Attestation Portal. Note that not actively attesting ithin the 90-day period is viewed as acceptance. For Phase 1 and 2 distribution recipients the 90-day period has passed. For those who recently received funds in the Phase 3 General Distribution the 90-day window to attest is currently open. To reject payment, the recipient must return the funds to HHS within 15 calendar days of attestation.
On November 2, the U.S. Department of Health & Human Services released its Final Reporting Data Elements – PDF. This document updates and supplements the October 22nd, September 19th and July 20th General and Targeted Distribution Post Payment Notice of Reporting Requirement. Providers that receive PRF payments exceeding $10,000 in aggregate are required to report their use of funds, as part of the post-payment reporting process. Failure to comply could result in the repayment of the funds received.
The key dates to be aware of are as follows:
- January 15, 2021: reporting portal opens for providers
- February 15, 2021 the original first reporting deadline for all providers on use of PRF funds has now been extended to a future date. On January 15th the U.S. Department of Health and Human Services (HHS), through the Health Resources and Services Administration (HRSA), announced that it will be amending the reporting timeline for the Provider Relief Fund Program (PRF) due to the recent passage of the Coronavirus Response and Relief Supplemental Appropriations Act. HHS has been working to provide updated reporting requirements that comply with this recently passed legislation. Consequently, PRF recipients will now be required to submit their reporting requirements on their use of these funds later than previously announced.
- July 31, 2021: final reporting deadline for providers who did not fully expend PRF funds prior to December 31, 2020
Reporting guidance on the use of PRF funds can be applied in the following manner and order:
Healthcare related expenses attributable to coronavirus that another source has not reimbursed (i.e. Paycheck Protection Program) and is not obligated to reimburse, which may include General and Administrative (G&A) or healthcare related operating expenses.
Examples of G&A expenses may be as follows:
- Mortgage or Rent for a clinical setting
- Direct employee expenses (wage limits apply)
- Fringe benefits
- Lease payments (diagnostic equipment or clinical care software)
- Utilities/operations (HVAC services, environmental services for cleaning)
Examples of Health care related expenses may be as follows:
- Specific medical supplies (surgical masks, temperature monitoring devices)
- Equipment (ventilators, HVAC systems or upgrades to filtration system)
- Information technology (upgraded internet, remote working support, new EMR)
- Facility upgrades (improvements to waiting rooms to accommodate COVID 19 safety protocols)
- 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.
The specific methodology for reporting the above information has not currently been released. In preparation for a timely and accurate submission of the requested data, it’s advisable for recipients of PRF payments to proactively analyze their coronavirus related expenses. Contact a professional advisory services firm for guidance on Covid-19 regulatory and financial relief programs before it’s too late.
Marc Lion CPA, CFP Partner/Practice Leader, Entrepreneurial Business Services at Mazars USA LLP. For more information visit mazars.us