Medicare Compliance & Reimbursement

With more COVID-19 relief coming soon, Medicare providers have something to smile about in 2021.

Details: On Dec. 16, the Department of Health and Human Services (HHS) announced that it added $4.5 billion to the Provider Relief Fund (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 and net changes in expenses 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 funded up to 88 percent of providers’ reported losses in this phase, the agency says.

HHS will make PRF payments through January. They are broken out by state at www.hhs.gov/sites/default/files/provider-relief-fund-general-distribution-phase-3-lost-revenue-payment-allocation.pdf and will be updated as payments are made, according to the agency.

Meanwhile, the new COVID-19 relief package signed into law Dec. 27 also includes a boost for PRF loans (see story, p. 1). 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.

Clear As Mud

The new law, H.R. 133, also attempts to clarify how providers should calculate lost revenues for purposes of obtaining relief from repaying PRF loans.

Reminder: Back in June, HHS issued guidance saying, “the term ‘lost revenues that are attributable to coronavirus’ means any revenue that you as a healthcare 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” (see Medicare Compliance & Reimbursement, Vol. 46, No. 19).

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.

Hold on: “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,” says Macke.

For example: “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. “This is a big mystery,” Macke pronounces.

Bottom line: Stay tuned for more guidance from HHS on the matter in the months ahead.