Nov. 18 Update: PRF Requirements

November 18, 2020


On Nov. 18, the U.S. Department of Health and Human Services (HHS) posted updated FAQs regarding use of Provider Relief Fund (PRF) payments for capital expenses and third-party payments.

Hospitals may fully expense capital equipment, inventory and facilities in cases where the purchase was directly related to preventing, preparing for and responding to the coronavirus.  Examples of capital equipment and inventory include ventilators, masks, face shields, biohazard suits, general personal protective equipment, and disinfectant supplies.  Examples of capital facilities include upgrades to heating, ventilation, and air conditioning (HVAC) systems to support negative pressure units, enhancements to ICU capabilities, and leasing a permanent facility to increase hospital capacity.  Additional examples of such capital expenses are on pages 15 and 16 of the updated FAQ document.  Previously, providers could only use the PRF to pay for the value of depreciation for COVID-19 related capital purchases with useful lives of more than 12 months.

Additionally, HHS clarified that net patient revenues should not include payments received from or made to third parties for patient care provided prior to 2019.  This addresses potential fluctuations in year-over-year net patient revenues due to settlements or payments for patient care provided outside of the current reporting period (2019-2020).  This FAQ is on page 24 of the updated FAQ document.

The PRF FAQs continue to evolve.  If you have questions or concerns about the contents of the current FAQ document, please send them to Cassie Yarbrough, Director, Medicare Policy (, 630-276-5516) and alert your audit firm.