October 30, 2020
On Oct. 28, the U.S. Department of Health and Human Services (HHS) updated the Provider Relief Fund (PRF) Frequently Asked Questions (FAQs) on the HHS CARES Act website. To assist IHA members in finding these changes quickly, a copy of the latest FAQs is on the IHA COVID website with new or modified FAQs highlighted. Most of the new FAQs focus on the amended Oct. 22 PRF reporting guidance, but there are also new details on returning PRF payments, directions regarding a change of ownership after receipt of PRF payments, and examples of how to account for other funding sources and how to apply the income cap ($197,300 per employee). For all providers in receipt of $10,000 or more PRF payments by Dec. 31, 2020, the reporting window is Jan. 15, 2021 through Feb. 15, 2021. Providers with unexpended PRF payments after Dec. 31, 2020 have until June 30, 2021 to use remaining PRF payments, and must then submit a second and final report no later than July 31, 2021.
There remains some confusion about the definition of lost revenue. On page 19 of the updated FAQs, HHS states that providers may not use their 2020 budgeted revenues as a basis for reporting lost revenues (“Can I use 2020 budged revenues as a basis for reporting lost revenues?”). However, on pages 8 and 9 of the updated FAQs, HHS states that providers may use any reasonable method of estimating revenue during March and April 2020 compared to the same period had COVID-19 not appeared, including use of a prepared budget. It appears that HHS has two standards for calculating lost revenues: one for March and April that may include a provider’s budgeted revenues, and another for the remainder of the year that may not include a provider’s budgeted revenues. We will work with our national partners to elicit more clarity from HHS on this discrepancy.
Additionally, on pages 20 and 21 HHS addresses the use of Federal Emergency Management Administration (FEMA) funds. While FEMA funds are generally the last source of reimbursement, HHS clarifies that providers must use FEMA funds prior to PRF payments.
Finally, HHS provided updates around the treatment of PRF payments within health systems. On page 18, HHS states that providers can allocate parent overhead costs to subsidiaries as long as those costs are normal and reasonable. These costs may be an eligible expense if attributable to coronavirus and not reimbursed from other sources. Additionally, HHS addressed the use of General Distribution payments within a system, clarifying that General Distribution payments may be transferred to and from subsidiary and parent tax identification numbers (TINs), regardless of the TIN that attested to receiving the General Distribution payment (page 20). However, HHS did not extend similar flexibilities to Targeted Distributions (e.g., High-Impact Payments). As of Oct. 28, the original TIN receiving Targeted Distributions must keep, use, and report on Targeted Distributions.
HHS added and modified several additional FAQs. Please review all FAQs to ensure compliance with PRF requirements when accepting, using, and reporting on the use of PRF payments. HHS continues to run a Provider Support Line at 866-569-3522. Additionally, you may send questions or comments to IHA.