$25.5 Billion in Additional Provider Relief Fund Distribution Announced

The information in this article is based on the latest guidance available as of the date of publication. Visit the HHS Provider Relief Fund for the most up-to-date information.

On September 10, 2021, the US Department of Health and Human Services (HHS), through the Health Resources and Services Administration (HRSA), announced $25.5 billion in new Phase 4 funding available for health care providers affected by the COVID-19 pandemic.

HHS’ aim is to focus the funding on equity and support for providers serving the most vulnerable communities with the most need. Organizations can apply for the additional funding in a single application.

The portal opens September 29, 2021.

Funding Overview and Other Highlights

Key funding highlights include:

  • $8.5 billion allocated from the American Rescue Plan (ARP) for providers serving rural Medicaid, Children’s Health Insurance Plan (CHIP), or Medicare patients
  • $17 billion for qualified health care providers with revenue loss and increased expenses attributed to the pandemic.

HHS also announced:

  • A final 60-day grace period to complete PRF Period 1 reporting for providers who don’t meet the September 29, 2021 deadline
  • Details regarding the Phase 3 PRF Payment Calculation Methodology to promote transparency and stated that reconciliation requests will be an option

$8.5 Billion from the American Rescue Plan

HRSA will make ARP rural payments to providers based on the amount of Medicaid, CHIP, and Medicare services they provide to patients who live in rural areas as defined by the HHS Federal Office of Rural Health Policy.

HRSA will use existing Medicaid, CHIP, and Medicare claims data to calculate payments; ARP rural payments will also generally derive from Medicare reimbursement rates.

To help ensure that organizations use these Provider Relief Funds (PRF) for patient care, recipients have to notify the HHS Secretary of any merger with, or acquisition of, another health care provider during the period in which they can use the payments.

Providers who report a merger or acquisition may be more likely to incur audits to confirm they used their funds for costs related to corona virus, consistent with an overall risk-based audit strategy.

$17 Billion Funding Through Phase 4 PRF Funds Targets Smaller Providers

PRF Phase 4 payments will be based on providers' lost revenues and expenditures between July 1, 2020 and March 31, 2021.

The payments provide weighted funding for smaller providers—those who tend to operate on thin margins and often serve vulnerable or isolated communities—for their lost revenues and COVID-19 expenses at a higher rate compared to larger providers.

PRF Phase 4 will also include bonus payments for providers who serve Medicaid, CHIP, and Medicare patients, as they tend to have lower income plus greater and more complex medical needs. HRSA will price these bonus payments at the generally higher Medicare rates to ensure equity for those serving low-income children, pregnant women, people with disabilities, and seniors.

PRF Phase 4 requirements will be consistent with those included in the Coronavirus Response and Relief Supplemental Appropriations Act of 2020.

Phase 3 PRF Payment Calculation Methodology

HHS also released additional information about the Phase 3 PRF Payment Calculation Methodology. Providers who believe miscalculations exist in their PRF Phase 3 payment according to this methodology now have an opportunity to request a reconsideration. Further details on the PRF Phase 3 reconsideration process are forthcoming.

Reporting Grace Period

Last, HHS also announced a final 60-day grace period to complete the PRF reporting requirements for providers who fail to meet the September 30, 2021 deadline for the first PRF reporting time period. The 60-day grace period will begin on October 1, 2021 and end on November 30, 2021.

While the deadlines to use period one funds and the Reporting Time Period won’t change, HHS won’t initiate collection activities or similar enforcement actions for noncompliant providers during this grace period.

We’re Here to Help

To learn more about the potential impacts on your PRF payments or reporting, contact your Moss Adams professional.

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