Accounting and Financial Reporting

HHS postpones deadline for hospitals to comply with Provider Relief Fund reporting requirements

January 20, 2021 12:11 am
  • Recipients of Provider Relief Fund payments won’t have to report their COVID-19-related expenses and lost revenue to HHS by Feb. 15 as previously scheduled.
  • HHS is continuing to assess the impact of recent legislation on the reporting regulations and will set a new deadline after updated guidance is complete.
  • The legislative language should allow providers to keep more of their PRF payments, but a question remains concerning the impact of Paycheck Protection Program payments.

As hospitals and other healthcare providers prepare to comply with mandatory reporting on their use of Provider Relief Fund (PRF) payments, a pair of recent developments could prove beneficial.

For one, the U.S. Department of Health and Human Services (HHS) on Friday offered a respite from a looming deadline, announcing providers will not have to report on their use of PRF grants by Feb. 15.

In addition, the sweeping year-end legislation that was signed in late December included modifications to the PRF reporting process. The updates generally should allow recipients to keep more of their funds.

HHS is working to amend the reporting rules to comply with the new legislation. With changes pending, the agency chose not to open the reporting portal Jan. 15 as scheduled, although providers may register for gateway access. The deadlines for establishing a reporting account and for completing the reporting process are to be determined, according to new HHS guidance.

Reporting requirements apply to any provider that received more than $10,000 from the PRF.

For providers, a welcome change regarding ‘lost revenue’

Changes stemming from the year-end legislation should be advantageous for PRF payment recipients compared with previous guidance, in which HHS directed providers to report lost revenue by comparing actual revenue in 2020 and 2019.

The legislation gives providers the option to use budgeted revenue — based on budgets adopted by March 2020 — as the key revenue metric. In many cases, that approach will result in more favorable calculations.

“The lost revenue definition change was something a lot of our clients were looking for and gives them a lot more comfort that they would be able to keep the funds that they had received,” said Tim Fry, an associate at McGuireWoods.

Comparing 2020 actual revenue to 2019 actual revenue didn’t account for scenarios in which hospitals generated new revenue but still were behind budget due to the halt in elective procedures.

For example, one of Fry’s hospital clients is in a state where Medicaid increased its payment rate this year. That change made it seem like the hospital gained revenue even though revenue came in well short of budget.

Prior to the year-end legislation, “They would not have been able to say they had lost revenue,” Fry said. “Well, now they can.”

The legislative language follows October guidance in which HHS clarified that lost revenue is the pertinent benchmark as opposed to net-income loss. Hospital advocates had strongly objected when guidance earlier in the fall established net-income change as the metric to report.

“A lot of hospitals took exception to that because at the end of 2020, after they cut expenses, they probably didn’t lose a lot of money even though they lost a lot of revenue,” said Khaled Klele, a partner at Riker Danzig. “HHS was very quick to change that calculation to just make it lost revenue.”

Allowing providers to use budgeted revenue in their PRF reporting, as established in the year-end legislation, “takes it another step” in a favorable direction, Fry said.

Reporting COVID-19-related expenses

PRF allocations are applied first to cover COVID-19-related expenses and then to lost revenue. For purposes of reporting, expenses are defined as those related to COVID-19 that aren’t reimbursable via other sources such as the Paycheck Protection Program (PPP).

Providers should focus on the specific language regarding expenses as explained in recent guidance, Klele said. The language suggests expenses can be allocated to maintaining healthcare capacity during the pandemic.

“The way I read that is you don’t necessarily have to spend the money directly on COVID-related expenses, because I think the way HHS is defining COVID-related expenses is to also include just maintaining your healthcare capacity — and that’s basically keeping the doors open,” Klele said. “I think that was very helpful for providers in allocating this money.”

Questions as to how the PPP will affect PRF reporting

One issue that bears watching is the rules surrounding the process of factoring PPP distributions in PRF reporting, Klele added.

“They don’t really clearly explain the purpose of identifying that information and whether or not there’s going to be changes in the future on how they look at the overall loss that a hospital or provider may have experienced,” Klele said.

“[For] a lot of hospitals, even if you factor in the money they received from the PPP, they’re still going to experience a significant loss. I guess the question becomes: What happens if, after you factor in the PPP money, you don’t have a loss of revenue?”

Changes in store at HHS

The reporting process for PRF recipients will be overseen by the incoming Biden administration. It’s unclear to what extent the changeover from the Trump administration will contribute to the indefinite delay in the reporting deadline, although many professionals at agencies such as HHS remain in their positions from one presidential term to the next.

HHS noted that provider support and call-center resources are limited for now but will be expanded once the reporting timetable is announced.


googletag.cmd.push( function () { googletag.display( 'hfma-gpt-text1' ); } );
googletag.cmd.push( function () { googletag.display( 'hfma-gpt-text2' ); } );
googletag.cmd.push( function () { googletag.display( 'hfma-gpt-text3' ); } );
googletag.cmd.push( function () { googletag.display( 'hfma-gpt-text4' ); } );
googletag.cmd.push( function () { googletag.display( 'hfma-gpt-text5' ); } );
googletag.cmd.push( function () { googletag.display( 'hfma-gpt-text6' ); } );
googletag.cmd.push( function () { googletag.display( 'hfma-gpt-text7' ); } );
googletag.cmd.push( function () { googletag.display( 'hfma-gpt-leaderboard' ); } );