Courtney McKay, CPA - Partner - Consulting Services

On September 19, 2020, the Department of Health and Human Services released reporting guidance for entities receiving distributions from the Provider Relief Fund that was established in the CARES Act legislation. This guidance was initially expected to be made available by August 17, 2020, but was delayed. Key provisions contained in the notice are summarized herein.

Who is subject to these reporting requirements?

All entities who received one or more Provider Relief Fund (PRF) payments totaling $10,000 or more must comply with the reporting requirements. However, the requirements do NOT apply to the following:

• Nursing Home Infection Control distributions;
• Rural Health Clinic Testing distributions; or
• HRSA Uninsured Program.

Additional reporting requirements associated with these funding programs may be announced in the future.

What information must be reported?

Entities meeting the funding threshold must submit the following information regarding the use of funds:

Step 1: Healthcare related expenses related to COVID-19

• Excludes expenses that another source has reimbursed or is obligated to reimburse.
• May include General and Administrative (G&A) expenses or operating expenses.

Step 2: Lost revenues related to COVID-19

• Measured as negative change in net patient care operating income (patient care revenue less patient care expenses) from 2019 to 2020.
• Calculation must exclude from patient care expenses anything reported in Step 1.
• Reported lost revenues cannot exceed the entity’s 2019 net gain from healthcare related sources.
• If the entity incurred a net operating loss from patient care in 2019, the entity can report lost revenues up to a net gain/loss of $0 in 2020.

If all PRF funds are not expended in 2020, entities will have an additional six months in 2021 to utilize remaining funds and will submit a subsequent report relating to that period.

What are the data elements that must be reported?

The following data elements will be required to allow HRSA and HHS to determine whether PRF distributions were properly utilized in accordance with the terms and conditions associated with the acceptance of funds.

• Demographic Information
• Reporting Entity that received PRF payments
• Tax Identification Number (TIN)
• National Provider Identifier (this element is optional)
• Fiscal Year-End Date
• Federal Tax Classification (e.g., C Corporation, S Corporation, Sole Proprietorship; Limited Liability Corporation, tax-exempt entity; etc.)
• Healthcare related expenses related to COVID-19
• Includes amounts associated with treating confirmed or suspected cases; preparing for possible or actual cases, maintaining capacity to deliver healthcare services, or other related activities not reimbursed (or obligated to be reimbursed) by other sources, such as commercial payers, patients, or federal/state/local governments. Prior guidance from HHS has indicated that all patients are considered possible COVID-19 patients as it relates to these provisions. Maintaining capacity includes expenses such as operating and maintaining facilities, adequate staffing, etc.
• For entities that received at least $10,000 but less than $500,000 in aggregate PRF distributions, only two categories of reporting are required:G&A expenses attributable to COVID-19; and
• Other healthcare-related expenses attributable to COVID-19.
• For entities receiving $500,000 or more, additional details must be reported:
• G&A expenses attributable to COVID-19:
• Mortgage/Rent;
• Insurance (e.g., property, malpractice, etc.);
• Personnel expenses to prevent, prepare for, or respond to COVID-19 (e.g., training, temporary or contract employees; etc.);
• Fringe benefits (e.g., hazard pay, travel reimbursement, etc.);
• Lease Payments related to new equipment, software leases, etc.;
• Utilities/Operations (e.g., ventilation enhancements, cleaning/sanitation; third party vendor services, etc.); and
• Other G&A expenses.
• Healthcare Related Expenses attributable to COVID-19:
• Supplies (e.g., PPE, hand sanitizer, patient or employee screening tools; etc.);
• Equipment (e.g., HVAC system upgrades, ventilators, etc.);
• Information Technology (e.g., telehealth infrastructure, increased bandwidth to support telehealth and/or remote workforce, etc.);
• Facilities (e.g., lease or purchase of temporary structures or modification to existing facilities); and
• Other healthcare related expenses.
• Lost Revenues Attributable to COVID-19
• Entities will report the following information to be used in calculating lost revenues:
• Total Revenue/Net Charges from Patient Care Related Sources (2019 and 2020), reported by quarter.
• Amounts should be reported net of bad debt, and should generally exclude revenue from retail sales, insurance settlements, investments, or other non-patient care activities.
• Payor mix information (2019 and 2020 calendar years)
• Medicare Part A and B
• Medicare Part C
• Medicaid
• Commercial Insurance
• Self-Pay
• Other
• Other financial assistance received
• Total funding received from Treasury, Small Business Association (SBA), Cares Act/Paycheck Protection Program (PPP) during the reporting period;
• FEMA Cares Act funding received during the reporting period;
• CARES Act Testing funding;
• Total funding received from Local, State, and Tribal government sources;
• Business insurance (i.e., claims paid through insurance policies for business interruption losses, etc.);
• Other assistance.
• Total expenses for calendar years 2019 and 2020 (reported by quarter)
• G&A expenses for calendar years 2019 and 2020

• Healthcare related expenses for calendar years 2019 and 2020

• Non-Financial Data (reported on quarterly basis)
• Facility, Staffing, and Patient Care – includes metrics such as total employees by category, number of patient visits, available staffed beds, etc.
• Change in ownership, if applicable

Other Considerations

Any PRF distributions received by an entity must be considered when determining if the entity meets the $750,000 threshold of federal funding that would subject the entity to Single Audit requirements. Entities must report whether they are subject to Single Audit requirements in 2020.