Medicare Compliance & Reimbursement

New way: In a June 11 notice, the HHS Health Resources and Services Administration (HRSA) announced four reporting periods and related due dates (see chart, p. 5). That translates to an extension for the use of some PRF funds. “The period of availability of funds is based on the date the payment is received (rather than requiring all payments be used by June 30, 2021, regardless of when they were received),” HRSA says in a release about the notice.

“If HHS requires recipients to demonstrate lost revenue and expenses during the Period of Availability in which the recipient received a distribution without carrying-forward losses and expenses from the prior Period of Availability, recipients would be facing the prospect of refunding millions of PRF dollars despite still having substantial amounts of lost revenues unreimbursed,” the Hall Render attorneys stress. “The multi-million dollar question is whether recipients will be permitted to carry losses forward or carry back in some cases.”

Why it’s so important: Many providers “incurred substantial financial losses during April, May and June of 2020,” the Hall Render attorneys explain. These providers “therefore, had substantial lost revenues during the first Period of Availability.” Then some providers saw revenue stabilize during the second half or fourth quarter of 2020, “even if they did not return to full pre-COVID levels,” they note. These providers “would not have much, if any, lost revenue during the second Period of Availability (July 1, 2020 through December 31, 2021). Though, these same systems would have received considerable distributions during the second Payment Received Period.”

Bottom line: “If expenses and losses cannot be carried forward, the new multi-time period approach could have a devastating impact on the ability of recipients to retain PRF payments,” the Hall Render attorneys warn.

Another downside: Providers may now need to submit up to four reports, depending on when they received funds, compared to the previous one or two.

“Recipients who received one or more payments exceeding $10,000 in total during a ‘Payment Received Period’ are required to report in each applicable ‘Reporting Time Period,’” Perez-Slavinski and Sloane highlight.

“The new approach … requires most recipients to submit multiple reports rather than a single comprehensive report since most recipients received PRF distributions during multiple Payment Received Periods, making an already complicated reporting process even more challenging,” the Hall Render attorneys criticize. “Requiring multiple reports based on when funds were received will only add to the accounting and record-keeping burden for recipients related to PRF compliance,” they charge.

A newly added FAQ reveals another unfavorable development. “How does a Reporting Entity determine whether an expense is eligible for reimbursement through the Provider Relief Fund?” the FAQ says.

HHS allowable expenses “must be used to prevent, prepare for, and respond to coronavirus” or “be used for lost revenues attributable to the coronavirus,” as stated previously. But HHS goes on to emphasize that “Reporting Entities are required to maintain adequate documentation to substantiate that these funds were used for health care-related expenses or lost revenues attributable to coronavirus, and that those expenses or losses were not reimbursed from other sources and other sources were not obligated to reimburse them.”

The clincher: “The burden of proof is on the Reporting Entity to ensure that adequate documentation is maintained,” the FAQ emphasizes.

This FAQ “reinforces the need to maintain detailed documentation on the receipt and use of PRF payments,” the Hall Render attorneys stress. And another FAQ “unambiguously reminds recipients that HHS will audit the use of PRF payments and recoup payments if necessary, including if expenses are not supported by adequate documentation,” they note.

Watch For More PRF Distribution

One positive development in the new notice and FAQs — more PRF money seems to be coming.

Under the newly released reporting timeframe, “Period 4 sets the table for a potential Phase 4 tranche of remaining PRF dollars to be distributed in 2021 and used for all of 2022,” points out finance consultant Domenic Segalla with advisory, tax and accounting firm Withum Smith + Brown in New York City. “Stay tuned for more on that,” Segalla says in online analysis.

The Phase 4 distribution period in the new reporting timeframe includes payments between July 1, 2021 and Dec. 31, 2021, “suggesting that additional payments are anticipated,” the Hall Render attorneys predict. But for now, “there is still no word from HHS on how it intends to distribute the approximately $24 billion remaining in the PRF, including the $8.5 billion appropriated by the American Rescue Plan Act of 2021 for rural providers,” they say.

Another perk of the new system is that “recipients will have a 90-day period to complete reporting,” rather than the previous 30-day reporting period, notes consulting firm The Health Group in Morgantown, West Virginia, in its electronic newsletter.

Resource: The 11-page notice is at www.hhs.gov/sites/default/files/provider-post-payment-notice-of-reporting-requirements-june-2021.pdf, the 59-page FAQ document is at www.hhs.gov/sites/default/files/provider-relief-fund-general-distribution-faqs.pdf, and the PRF portal is at https://prfreporting.hrsa.gov.