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HHS Provider Relief Funds Reporting Requirements: Important Updates Every Provider Should Know

This Bulletin is brought to you by AHLA’s Physician Organizations Practice Group.
  • November 09, 2020
  • Amanda L. Waesch , Brennan Manna & Diamond LLC

The Department of Health and Human Services (HHS) continues to revise its reporting requirements for the use of the Provider Relief Funds. Providers with more than $10,000 in Provider Relief Fund payments must report on the use of the funds through December 31, 2020. The reporting window will begin on January 15, 2021 and providers must complete reporting obligations for fiscal year 2020 by February 15, 2021 through a portal designed by HHS. However, providers that have unexpended funds as of December 31, 2020, will have an additional six months to use the remaining funds through June 30, 2021. These providers must submit a second and final report no later than July 31, 2021.

Providers must use the Provider Relief Funds for increased health care related expenses attributable to COVID-19 or lost revenues due to COVID-19. HHS has made clear that providers that do not have or do not anticipate that they will have eligible expenses or lost revenue in excess of the Provider Relief Funds must return the funds by July 31, 2021. Providers must carefully calculate increased expenses attributable to COVID-19 and lost revenue due to COVID-19 in accordance with the new guidance issued by HHS through a two-step analysis.[1]

Step 1: Calculate Health Care Expenses Attributable to COVID-19

First, providers must calculate health care expenses that are (1) attributable to COVID-19, and (2) not reimbursed by another source or not obligated to be reimbursed by another source. The health care expenses are divided into two categories: General and Administrative (G&A expenses) and health care related operating expenses. The intent of the Provider Relief Funds is to reimburse marginal increased expenses due to COVID-19. Providers that received between $10,000 and $499,999 in aggregate Provider Relief Funds will only need to report health care related expenses attributable to COVID-19 less other sources of reimbursement (insurance payments, government assistance, etc.) separately in the two categories of G&A expense and health care related operating expenses. Providers that received $500,000 or more in Provider Relief Funds will be required to report more detailed expense information using worksheets that will be in the portal.

G&A expenses include mortgage/rent, insurance costs, personnel and fringe benefits, lease payments, utilities and operations, etc. Provider Relief Funds can only be used to cover G&A expenses over and above amounts that have been reimbursed from other sources such as insurance payments and funds received from government sources (such as the Paycheck Protection Program (PPP), Economic Injury Disaster Loans (EIDL), etc.). HHS has issued detailed frequently asked questions (FAQs) regarding the definition of G&A expenses, but we expect more guidance to be issued regarding how increased expenses are calculated and offset by other monies received by the provider.

The FAQs outline a few methodologies from which a provider can choose, based on the provider’s accounting methodology and record-keeping. The provider can net G&A expenses against insurance payments and other funds received (such as PPP, EIDL, etc.). The provider can also calculate the increased incremental cost to provide services, such as an office visit, due to incremental expense. However, the provider must offset the incremental cost by any increased reimbursement received by the provider to compensate for the increased costs. Providers can also calculate incremental expenses separately such as additional security personnel, increased hazard pay, increased utility costs of temporary facilities, etc. However, if the provider applied any funding or grants, such as PPP funds, the provider cannot apply these expenses to the Provider Relief Funds.

Health care related operating expenses include expenses such a supplies, equipment, IT, facilities, employees, and other similar expenses. The Provider Relief Funds can only be used for costs attributable to COVID-19. Providers can compare costs and expenses from 2019 to the same costs and expense from 2020 to determine the incremental increase due to COVID-19. For example, providers should calculate the increased costs in personal protective equipment (PPE) supplies in 2019 compared to PPE supplies in 2020 (less any grant or funding received by the provider for such items).

Step 2: Calculate Lost Revenues Attributable to COVID-19

If providers still have unused Provider Relief Funds, the provider must allocate the Provider Relief Funds to lost revenues due to COVID-19. The updated reporting instructions reverse initial instructions that allowed providers to calculate lost revenues based on a reasonable accounting methodology through a snapshot of March and April 2020 losses and budgeted versus actual revenues. The new reporting requirements require providers to compare 2019 patient care revenues to 2020 patient care revenues and the year-over-year net change in patient care revenues from 2019 to 2020.

Lost Revenues Equation:

2019 Patient Care Revenues
- 2020 Patient Care Revenues
= Net Change (maximum amount to which Provider Relief Funds can be applied)

Providers must report patient revenues by payer source (Medicare Parts A and B, Medicare Part C, Medicaid/Children’s Health Insurance Program, commercial insurance, self-pay) as well as other income. Other income would include amounts received from other sources for patient care services (e.g. deductibles, copayments, coinsurance amounts).

If the Provider Relief Funds are not fully expended by December 31, 2020, the provider can use the six-month period from January 1, 2021-June 30, 2021 and compare patient care revenues to the same six-month period in 2019.

Other Reporting Requirements

Providers must also report other assistance received in 2020 such as Coronavirus Relief Funds from the Treasury, Internal Revenue Service, Small Business Administration, Coronavirus, Aid, Relief, and Economic Security (CARES) Act/PPP, etc.; Federal Emergency Management Agency CARES Act; CARES Act testing; local, state, and tribal government assistance; business insurance (e.g. business interruption); and other assistance (which includes interest earned on the Provider Relief Funds). Interest must be added to the total Provider Relief Fund amount and expended towards the appropriate use of the funds.

Providers must also provide quarterly data on non-financial information. Providers must report personnel metrics by category (full-time, part-time, contract, etc.) as well as total re-hires, total new hires, and total personnel separations—all by category. Providers must report certain patient metrics including in-person and telehealth visits, as well as total number of admissions and resident patients. Additionally, providers must report on facility metrics including staffed beds for medical/surgical, critical care, and other beds.

Finally, providers that underwent changes of ownership or certain divestitures will be required to report the change in ownership.

Providers should continue to be cognizant of their record-keeping obligations as well as balance-billing prohibitions.