More Provider Relief Fund Money for Home Health
Does new ‘lost revenues’ clarification help or hurt agencies?
On Dec. 16, 2020, the Department of Health and Human Services (HHS) announced that it added $4.5 billion to the Provider Relief Fund’s (PRF) phase 3 distribution to mitigate the impact of COVID-19 on healthcare providers. “HHS is providing more than $24 billion in new relief to more than 70,000 healthcare providers, meeting close to 90 percent of the losses they’ve reported from the COVID-19 pandemic in the first half of the year,” HHS Secretary Alex Azar said in a release. HHS originally planned to distribute $20 billion.
HHS “realized the submissions for lost revenues … would exceed the $20 billion budgeted for the Phase 3 allocation,” the agency says. “In an effort to meet the demand, HHS worked to add another $4 billion to the allocation bringing the new total to over $24 billion.” HHS reports funding up to 88 percent of providers’ reported losses in this phase.
HHS will make PRF payments through January. They are broken out by state at and will be updated as payments are made, according to the agency.
Meanwhile, the new COVID-19 relief package signed into law Dec. 27, 2020, also includes a boost for PRF loans. Congress allocated an additional $3 billion for the fund.
The $3 billion bump brings the PRF total to $178 billion, notes the National Association for Home Care & Hospice in a summary of the relief package. “Non-government financed home care may be able to get some of this funding as it has been essentially left out so far,” the trade group predicts.
What Constitutes “Lost Revenue”?
The Consolidated Appropriations Act, 2021, also attempts to clarify how providers should calculate lost revenues for purposes of obtaining relief from repaying PRF loans.
Back in June, HHS issued guidance saying, “the term ‘lost revenues that are attributable to coronavirus’ means any revenue that you as a health care provider lost due to coronavirus.” HHS said providers could use any reasonable method to calculate that, including comparing a projected budget with actual revenues. Then, in September, HHS negated that guidance by defining “lost revenues” as a “negative change in year-over-year net patient care operating income” and specifying that “recipients may apply PRF payments toward lost revenue, up to the amount of their 2019 net gain from healthcare related sources.”
Now, the new law specifies that a “provider may calculate … lost revenues using the Frequently Asked Questions guidance released by the Department of Health and Human Services in June 2020, including the difference between such provider’s budgeted and actual revenue budget if such budget had been established and approved prior to March 27, 2020.”
At first blush, that sounds great. Providers can revert to the old, more liberal methodology. That may not be the case, though.
“I think this made it more confusing,” laments finance expert Dave Macke with VonLehman & Co. in Fort Mitchell, Kentucky. “This caught everybody by surprise. [There is] very little clarity,” Macke tells AAPC.
“This does not say if the prior guidance in October with the amendment for lost fundraising is superseded,” Macke points out. The clarification that providers can include lost fundraising in their lost revenues calculations is expected to especially help hospices.
With providers’ first PRF reporting deadline so close at Feb. 15, added confusion is the last thing providers need.
New Law Brings Some Clarity
Meanwhile, one item that’s more clear is the law’s provision “that for any reimbursement … from the Provider Relief Fund to an eligible health care provider that is a subsidiary of a parent organization, the parent organization may allocate (through transfers or otherwise) all or any portion of such reimbursement among the subsidiary eligible health care providers of the parent organization, including reimbursements referred to by the Secretary as ‘Targeted Distribution’ payments, among subsidiary eligible health care providers of the parent organization.”
However, the law states, “Responsibility for reporting the reallocated reimbursement shall remain with the original recipient of such reimbursement.”
Another PRF provision that is more straightforward is the requirement “that not less than 85 percent of (i) the unobligated balances available as of the date of enactment of this Act, and (ii) any funds recovered from health care providers after the date of enactment of this Act, shall be [used] … to make payments to eligible health care providers based on applications that consider financial losses and changes in operating expenses occurring in the third or fourth quarter of calendar year 2020, or the first quarter of calendar year 2021.