- HFMA’s Chad Mulvany says it appears that providers will be able to count the cost of stockpiled PPE in response to the pandemic in their calculation of expenses attributable to the coronavirus. The full price of equipment purchased to make PPE due to supply shortages appears to be covered too.
- The latest update on depreciation of capital equipment says that hospitals will be able to claim PRF funds for ultra-cold freezers necessary to store the Pfizer vaccine. The prior depreciation policy would have negatively impacted rural hospitals.
- Expenses for capital facilities may be fully expensed only in cases where the purchase was directly related to preventing, preparing for and responding to the coronavirus.
On Nov. 18, the U.S. Department of Health and Human Services (HHS) posted several clarifications related to the treatment of depreciation, expenses for stockpiling PPE and revenue to the HHS Provider Relief Fund (PRF) FAQs, which were asked for by HFMA and other industry groups.
Specifically, HHS clarified the following three areas:
1. Capital equipment and inventory purchases: Expenses for capital equipment and inventory may be fully expensed only in cases where the purchase was directly related to prevent, prepare for and respond to the coronavirus. Examples of these types of equipment and inventory expenses include:
- Ventilators, computerized tomography scanners and other intensive care unit (ICU)-related equipment put into immediate use or held in inventory
- Masks, face shields, gloves, gowns
- Biohazard suits
- General personal protective equipment
- Disinfectant supplies
Based on this FAQ, it appears that providers will be able to count the cost of PPE stockpiled in response to the pandemic in their calculation of expenses attributable to coronavirus that another source is not obligated to reimburse. It also appears that providers who have purchased equipment to make PPE to address supply shortages will be able to include the full cost of those purchases in their filing.
Further, there had been some concern that HHS’s prior depreciation policy would limit provider’s ability to claim PRF funds for ultra-cold freezers necessary to store the Pfizer vaccine. This change eliminates one of the potential barriers to vaccine distribution in rural areas.
2. Facilities projects: Expenses for capital facilities may be fully expensed only in cases where the purchase was directly related to preventing, preparing for and responding to the coronavirus. Examples of these types of facilities projects include:
- Upgrading a heating, ventilation and air conditioning (HVAC) system to support negative pressure units
- Retrofitting a COVID-19 unit
- Enhancing or reconfiguring ICU capabilities
- Leasing or purchasing a temporary structure to screen and/or treat patients
- Leasing a permanent facility to increase hospital or nursing home capacity
3. Settlement items: PRF recipients shall exclude from the reporting of net patient revenue payments received or payments made to third parties relating to care not provided in 2019 or 2020.