The Department of Health & Human Services (HHS) has begun issuing $30 billion in awards from the Public Health and Social Service Emergency Fund (PHSSEF) to healthcare providers nationwide to help relieve the financial burden imposed upon the healthcare industry by the COVID-19 pandemic. Each provider that receives an award is required to accept the Relief Fund Payment Terms and Conditions (the “Terms and Conditions”) issued by HHS by signing an attestation within thirty (30) days of receiving the payment or the provider must return the funds. The attestation may be completed at the online attestation portal.
REPORTING TO HHS
Importantly, the Terms and Conditions require award recipients, at a minimum, to submit reports as HHS deems necessary. HHS has not yet issued additional guidance regarding the format of the baseline reports that all providers will be required to submit or any additional information that must be included in these reports.
However, there is more detail regarding certain enhanced reporting requirements that apply for providers that receive more than $150,000 in the aggregate through the PHSSEF, as well as, any other programs under the CARES Act (including the PPP), the Families First Coronavirus Response Act, and the Coronavirus Preparedness and Response Supplemental Appropriations Act. Those providers will be required to submit quarterly reports within (10) days following the end of each calendar quarter. The quarterly reports must include at-least the following:
- The total amount of funds received from HHS;
- The amount of funds received that were expended or obligated for each project or activity;
- A detailed list of all projects/activities for which large covered funds were expended/obligated;
- The name and a description of the project/activity;
- An estimate of the number of jobs created or retained by the project/activity, if applicable;
- Detailed information on any level of sub-contracts or subgrants awarded by the covered recipient or its subcontractors or subgrantees.
Providers should periodically check HHS’ website for any updates or guidance regarding the PHSSEF award reports or quarterly reports for award recipients receiving more than $150,000.
FINANCIAL MANAGEMENT AND DOCUMENTATION
Additionally, the Terms and Conditions require recipients to adhere to certain Federal regulations regarding standards for financial management and documentation.
The regulations require each recipient-provider to maintain written procedures to determine whether costs/expenditures of PHSSEF funds are allowable under the HHS terms/conditions.
The regulations also require each provider to maintain a financial management system with sufficient records to:
- Identify all funds received through the PHSSEF (as well as any other Federal HHS grant awards received);
- Provide an accurate, current and complete disclosure/accounting for the use of PHSSEF funds;
- Identify how the PHSSEF funds are spent for approved purposes (e.g., records of expenditures, obligations, unobligated balances, assets, authorizations, income and interest, and source documentation);
- Demonstrate the provider maintained effective control over (and accountability for) all PHSSEF funds and property and other assets related the PHSSEF funds. PHSSEF funds must be safeguarded and used solely for authorized purposes; and
- Provide a comparison of between the PHSSEF funds that were received and the permitted expenditures to which such funds were applied.
RECORD RETENTION AND ACCESS
Providers are required to maintain financial records, supporting documents and any other records pertinent to PHSSEF funds and related expenditures for no less than three (3) years from the date of submission of the final expenditure records. HHS may also increase the length of time for the document retention requirement or request that the provider transfer certain records to HHS. The records/documents must be maintained, whenever practicable, in machine readable electronic format rather than paper.
Providers may be required to grant the right of access to any documents, papers or other records pertinent to PHSSEF funds and related expenditures to the following:
- HHS;
- Inspectors General;
- The Comptroller General of the U.S.; and
- Potentially to any entity through which the PHSSEF funds passed before being received by the provider.
In addition, each provider must also allow the above-referenced persons/entities timely and reasonable access to the provider’s personnel for interviews/discussions related to the records. Please note that the records access rights last as long as the records are maintained.
For more information regarding the PHSSEF awards or the Terms and Conditions for PHSSEF awards issued by HHS, please contact your regular HLP attorney, or Partners@thehlp.com, or call (212) 734-0128 or (248) 996-8510.