HHS Provider Guidance Regarding Use of Provider Relief Fund Payments and Reporting Requirement

The Department of Health and Human Services (HHS) has issued new FAQs regarding how Provider Relief Fund (PRF) payments may be spent and when recipient-providers must report their use of funds.

Under the Terms/Conditions that apply to recipients of PRF funds, each provider is required to have a written policy or written procedures to govern how the PRF funds are used.  Each provider should update its written policies/procedures based on HHS guidance and be prepared to make necessary reports to HHS.

PRF Reports Due Starting July 10

Any provider the received more than $150,000 in combined funds through the PRF, the PPP, and any other federal coronavirus relief/response program will be required to submit quarterly reports 10 days following the end of each calendar quarter.  The first reports will be due on July 10.  HHS has not yet released a format for the reports, but the HLP will circulate it once it is available.  Please also note that all providers that received PRF funds will be required to make reports to HHS, even if quarterly reports are not required.

Please note that HHS has not specifically indicated whether the quarterly reports will require reporting of all cost and lost revenue data through the end of each quarter (e.g., June 30, 2020) or for a shorter review period.  Because of this, it is a best practice to collect this data as soon as practicable and be prepared to report it within 10 days after each quarter ends.

Use of PRF Funds

HHS has now updated its FAQs to provider additional guidance on how PRF funds may be properly be utilized and this new guidance should be incorporated into providers’ written policies.

PRF funds may be used to pay for expenses or lost revenue attributable to coronavirus. HHS’ new FAQ helps clariy what is considered an expense or lost revenue attributable to coronavirus.

PRF funds may be used to reimburse a broad set of expenses, provided that the expenses are for items or services purchased to prevent, prepare for, and respond to coronavirus.  HHS provided examples of these reimbursable expenses, although other expenses would qualify as-well.  HHS’ illustrative list includes the following:

• Supplies used to provide healthcare services for possible or actual COVID-19 patients;
• Equipment used to provide healthcare services for possible or actual COVID-19 patients;
• Workforce training;
• Developing and staffing emergency operation centers;
• Reporting COVID-19 test results to federal, state, or local governments;
• Building or constructing temporary structures to expand capacity for COVID-19 patient care or to provide healthcare services to non-COVID-19 patients in a separate area from where COVID-19 patients are being treated; and
• Acquiring additional resources, including facilities, equipment, supplies, healthcare practices, staffing, and technology to expand or preserve care delivery.

The FAQs also clarify that the phrase “lost revenues attributable to coronavirus” means any revenue that the healthcare provider has lost due to coronavirus. For example, healthcare providers may have suffered revenue losses due to fewer outpatient visits, cancelled elective procedures/services, or increased uncompensated care to patients.

• The PRF funds may be utilized to cover any costs that would have been covered by the lost revenue, provided that such costs help prevent, prepare for, or respond to coronavirus. HHS further explained that the costs do not need to be directly tied to providing care to actual coronavirus patients.  However, HHS encourages providers to spend the fund attributed to lost revenues on costs that help the provider maintain healthcare delivery capacity.  HHS also provided the following (non-exhaustive) list of cost items to which funds attributed to lost revenues could be spent:
  • Employee or contractor payroll
  • Employee health insurance
  • Rent or mortgage payments
  • Equipment lease payments
  • Electronic health record licensing fees

Additionally, the FAQs state that providers may use PRF funds to pay for expenses incurred on any date, if they were attributable to preventing, preparing for, and/or responding to coronavirus. However, note that HHS believes it would be highly unusual for any provider to have incurred coronavirus charges prior to January 1, 2020.

Please note that PRF moneys may only be used to pay salaries/wages to individuals up to $197,300 per year.  PRF funds may be used to pay part of the salary/wages for more highly-compensated individuals, with the remainder paid through other (non-PRF) funds.  Please also note that HHS has not indicated whether this $197,300 / individual cap applies on a pro-rated basis (i.e., limited to $16,441 per month).  In the absence of such guidance, it is safest to allcate PRF funds to cover other costs before using the PRF funds to cover salaries/wages in excess of $16,441 per month.

Lastly, note that the providers are required to comply with the reporting requirements described in the PRF Terms and Conditions. For an overview of these requirements, please see our previous guidance discussing the documentation and record retention requirements for awards issued under the Public Health and Social Service Emergency Fund (which includes PRF awards).

For any questions regarding HHS’ FAQs pertaining to PRF payments, please contact your regular HLP attorney, or Partners@thehlp.com, or call (212) 734-0128 or (248) 996-8510.