The COVID-19 pandemic caused a financial loss for nearly every industry around the world. Now, the U.S. Department of Health and Human Services (HHS) is attempting to combat these losses by opening up $25.5 billion of financial support for providers. While the application process and complete details will be available from September 29th, today, we’re going to go through the specifics of this relief package and what it may mean for providers.
First, let’s take a look at how this $25.5 billion in relief breaks down. $8.5 billion of this funding is set aside for American Rescue Plan (ARP) resources, which is for providers who serve rural Medicaid, Children’s Health Insurance Program (CHIP), or Medicare patients. The $17 billion is designated for Provider Relief Fund (PRF) Phase 4, which includes relief for other providers with documented losses and expenses that can be linked to the pandemic.
The exact PRF Phase 4 payments given to providers will be calculated based on lost revenues and expenditures from July 1st, 2020 to March 31st, 2021, as laid out by the requirements of the Coronavirus Response and Relief Supplemental Appropriations Act of 2020. Payments will not be paid out at the same rate, however. Smaller providers, who the administration notes tend to have thinner margins and service communities with limited access to care, will have their lost revenues reimbursed at a higher rate than larger providers.
The administration views this as a way to support providers with the most perceived need. In this same spirit, PRF Phase 4 also includes bonus payments for providers who serve Medicaid, CHIP, and/or Medicare patients. These bonus payments will be priced higher than Medicare rates in an attempt to keep treatment equitable regardless of location or patients being treated.
Speaking of location, additional payments will be made by the Health Resources and Services Administration (HRSA) within the HHS to providers in rural areas, as defined by the HHS Federal Office of Rural Health Policy. These payments will be provided based on the amount of Medicaid, CHIP, and/or Medicare services they provide; however, these payments will generally be made based on Medicare reimbursement rates.
Some providers may have already received funding from PRF Phase 3 payments. In fact, there were some complaints about how these payments were calculated — and worries that these inaccurate calculations would carry over into Phase 4 payments. In the interest of transparency, detailed information about these previous calculations will be released, which includes the methodology used to calculate PRF Phase 3 payments. If after seeing this methodology a provider still believes their payments were incorrectly calculated, HHS has assured that they will be able to request a reconsideration, though they have not yet laid out the mechanism by which this will happen.
While much of the economy has recovered from the pandemic, HHS acknowledges that both the Delta variant and recent natural disasters may mean that providers are still in a difficult position with regards to both time and finances. Because of this, HHS has announced a final 60-day grace period for providers who do not meet the September 30th, 2021 deadline of their PRF Reporting requirements. This does not change deadlines for the usage of funds; furthermore, the Reporting Time Period will not be changed. This merely states that non-compliant providers will not face collections or comparable enforcement from the HHS during this additional 60 days.
Returning to the newly-announced $25.5 billion in payments, providers may apply for these payments using a single application, regardless of which payment they are specifically applying for, beginning on September 29th, 2021. HRSA will use existing Medicaid, CHIP and Medicare claims data to calculate exact payments.
In order to ensure these funds are used for provider services, every recipient of PRF funding is required to notify HHS Secretary of any acquisitions or mergers with other providers during the relevant period. If a merger or acquisition has occurred, it is likely that the provider will be audited to confirm the funds were used for the promised intent.
More information can be found on the HRSA website, and as always, we will keep you up to date as we learn more specifics about payments.