The new guidance replaces the guidance HHS released in September stating “recipients may apply PRF payments toward lost revenue, up to the amount of their 2019 net gain from healthcare related sources.” The original guidance indicated that providers may “use any reasonable method for estimating the revenue during March and April 2020 compared to the same period had COVID-19 not appeared. For example, if [hospital had prepared a budget] without taking into account the impact of COVID-19, the estimated lost revenue could be the difference between … budgeted revenue and actual revenue. It also would be reasonable to compare the revenues to the same period last year.”
In the new guidance, HHS also clarified that if providers do not expend PRF funds in full by the end of calendar year 2020, they will have an additional six months in which to use remaining amounts toward expenses attributable to COVID-19 but not reimbursed by other sources, or to apply toward lost revenues in an amount not to exceed the difference between 2019 and 2021 actual revenue.
Additionally, the administration also issues clarifications to allow health systems to move general PRF payments to subsidiary hospitals, even if a subsidiary hospital originally attested to the receipts of the funds. Specifically, the notice expands the definition of “reporting entity” to include, for example, “the parent of one or more subsidiary billing TINs that received General Distribution payments,” among other criteria.
HHS released a memo describing the policy update and HHS’s rationale behind the September and October changes.
HHS additionally updated the reporting guidance for Provider Relief Fund payments with the new guidance. Guidance on reporting requirements for Provider Relief funds is available at https://www.hhs.gov/sites/default/files/post-payment-notice-of-reporting-requirements-october-2020.pdf