On October 22, 2020, the U.S. Department of Health and Human Services (HHS) updated its Provider Relief Fund (PRF) â€œPost-Payment Notice of Reporting Requirements.â€ The most notable change was made to the definition of â€œlost revenuesâ€ attributable to coronavirus:
- Previous definition: A negative change in year over year net patient care operating income (i.e. patient care revenue less patient care related expenses).
- New definition: The difference between 2019 and 2020 actual patient care revenue.
The change comes after significant pressure asserted from the American Hospital Association, Congress and others that the reporting requirements and lost revenue definition previously issued by HHS were deeply problematic for hospitals and would have forced many to unjustifiably return funding.
HHS also clarified that if recipients do not fully expend PRF funds by the end of calendar year 2020, they have until June 30, 2021 to use the remaining funds. Lost revenues may be calculated in an amount not to exceed the difference between 2019 and 2021 actual revenue (for the same period).
The timing for reporting to HHS was unchanged. The reporting portal will be available as of January 15, 2021, with the first reporting deadline of February 15, 2021. The final reporting deadline (for 2021 expenditures of PRF funds) is July 31, 2021.
The Provider Relief Fund has been assigned a CFDA number (93.498) and will be subject to Single Audit under the OMB Uniform Grant Guidance. This program is expected to be included in OMBâ€™s expected Fall addendum to the 2020 Compliance Supplement.
For-profit recipients of these funds will also be subject to audit. As it relates to for-profit entities that expend $750,000 or more of these funds during the entityâ€™s fiscal year, these funds will be subject to audit as described in section 75.216 of HHSâ€™s adoption of the Uniform Guidance. That section discusses two options for audit:
- A financial related audit of a particular award or multiple HHS programs in accordance with Government Auditing Standards; or
- A full Single Audit that meets the requirements contained in subpart F of the OMB Uniform Grant Guidance.
The situation is fluid, so hospital financial management should continue to monitor the developments at HHS and consult with their auditors and advisors.
If you have questions or need additional information about this or other Provider Relief Funding concerns, please contact Chris Tyhurst, REDW Principal.
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