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September 17, 2021

Health Law Weekly

Health Care Providers to See Additional $25.5 Billion in COVID Relief

  • September 17, 2021

The administration will be distributing $25.5 billion in new funding to health care providers affected by the COVID-19 pandemic, the Department of Health and Human Services (HHS) announced September 10.

The funding includes $8.5 billion under the American Rescue Plan (ARP) for rural providers serving Medicaid, Children’s Health Insurance Program (CHIP), or Medicare patients. The remaining $17 billion comes from Phase 4 of Provider Relief Fund (PRF) and will be available based on documented revenue losses and expenses between July 1, 2020 and March 31, 2021, HHS said.

To minimize administrative burden, providers can submit one application for both types of additional funding starting September 29.

Phase 4 funding will reimburse small providers, which usually operate on thinner margins, at a higher rate than larger providers. The Health Resources and Services Administration (HRSA) also will include bonus payments for providers who serve Medicaid, CHIP, and Medicare patients. The bonus payments and the ARP rural payments will be based on the generally higher Medicare reimbursement rates. 

"This funding critically helps health care providers who have endured demanding workloads and significant financial strains amidst the pandemic," said HHS Secretary Xavier Becerra. "The funding will be distributed with an eye towards equity, to ensure providers who serve our most vulnerable communities will receive the support they need."

HHS also released detailed information about the methodology it used to calculate Phase 3 provider relief fund payments. Providers who believe their payments were not calculated correctly can request a reconsideration.

Citing recent natural disasters and the surge in COVID-19 cases caused by the Delta variant, HHS said providers will have a final 60-day grace period to comply with PRF reporting requirements. The first PRF reporting deadline is September 30. “While the deadlines to use funds and the Reporting Time Period will not change, HHS will not initiate collection activities or similar enforcement actions for noncompliant providers during the grace period,” HHS said.