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October 14, 2021

Update on the Provider Relief Fund: Resources Still Available to Cover COVID-19 Increased Expenses and Lost Revenues

It’s been a while since I’ve provided an update on the Provider Relief Fund (PRF)—a $178 billion fund created by Congress to cover providers’ lost revenues and increased expenses due to COVID-19. Thus far, the Health Resources and Services Administration (HRSA) within the U.S. Department of Health and Human Services (HHS) has distributed three rounds of “general distribution” funding from the PRF, and applications are now open for Round 4.      

Before discussing the current Round 4 funding opportunity, let me summarize what’s happened thus far with this fund. According to the HHS webpage that tracks spending from the PRF, providers have received approximately $119 billion out of the $178 billion in available funding. It is important to note that HHS only counts funds as distributed if providers have attested to the terms and conditions, so some of the remaining funds could still have been allocated and will be counted once providers submit their attestations.

HRSA has distributed three general distributions, which have broadly gone to providers who billed Medicare or Medicaid in 2019, as well as some targeted distributions, which were directed at specific provider types like rural hospitals, skilled nursing facilities, and safety net hospitals. Most, if not all emergency physicians or emergency medicine groups have only received funding from the general distributions and not the targeted distributions. It is important to remember that the funds were distributed to the entity that actually bills Medicare and Medicaid—so if you work for a group or academic institution that bills on your behalf, you should ask them how they have (or plan to) spend the money they have received from the PRF.

In Phases 1 and 2, which were distributed over several months last summer, providers were able to receive funding that equaled 2 percent of their gross revenue from 2019. Providers had to show that the payments they received exceeded their losses in March and April 2020. They were only able to keep the lesser of their losses or 2 percent of their revenue. Between phases 1 and 2, HRSA distributed $52 billion.

Phase 3, which was announced last fall, was an extremely drawn-out process. Over the course of many months, HRSA distributed another $24.5 billion. Providers previously eligible from earlier phases or who had already received PRF payments could apply for “additional payments that would take into account their financial losses and changes in operating expenses” but the payments they had received earlier were deducted from any Phase 3 payment. It’s unclear how much emergency physicians and emergency medicine groups received from the Phase 3 distribution. HRSA did receive a lot of complaints about the lack of transparency about their methodology—so much so that they recently released a step-by-step methodology document explaining how it distributed the funds. In general, providers received the greater of 88 percent of operating losses and increased expenses in the first half of 2020 and 2 percent of their annual patient care revenues.

As these first three phases of funding were being distributed, ACEP wrote repeatedly to HHS outlining issues with how HRSA had chosen to allocate the funds. As you can see from the methodology for the general distributions, the larger the provider, the more funding the provider received. Thus, hospitals and large health systems received the majority of the PRF funding, and that funding did not filter down to you as emergency physicians. Unfortunately, despite our objections and requests for additional funding for emergency physicians, HRSA did not change their overall approach to distributing funds.

After Phase 3, HRSA waited a long time to announce another distribution. Even though the Consolidated Appropriations Act, signed into law in December 2020, required HRSA to distribute a portion of the remaining PRF funding, HRSA sat on the funds as it continued making Phase 3 payments. Finally, on September 10, 2021, HRSA announced Phase 4—a $17 billion PRF distribution (HRSA also announced that it was making $8.5 billion available from the American Rescue Plan resources for providers who serve rural and underserved communities). About 75 percent of the PRF Phase 4 payments will be based on providers' lost revenues and expenditures between July 1, 2020 and March 31, 2021. The remaining 25 percent will be used for bonus payments based on the amount and type of services provided to Medicare, Medicaid, and Children’s Health Insurance Program (CHIP) beneficiaries from January 1, 2019 through September 30, 2020. HRSA will deduct prior PRF payments that were not previously deducted in Phase 3—so providers who haven’t received any PRF funds yet could receive more than those who have.

As stated earlier, the application for PRF Round 4 funds is now open. It closes in a couple weeks on October 26, 2021. To its credit, HRSA has provided a plethora of information about this round of funding, including details about the application process, eligibility criteria, and payment calculation methodology. HRSA has also created fact sheets, hosted a few webinars, and posted numerous frequently asked questions. All these resources are on HRSA’s PRF Phase 4 webpage.

Before concluding, I want to remind you all that as a condition of accepting funds, providers must adhere to specific terms and conditions (Round 4 terms and conditions are found here). Further, all providers who received one or more PRF payments that exceeded $10,000 in the aggregate must report specific information to HRSA about how they used the funds. Funds must be used to cover health care-related expenses attributable to COVID-19 that another source of funding (such as the Paycheck Protection Program) has not reimbursed. HRSA has established a schedule of when providers must submit reports based on when they received the payments. The first reporting deadline was originally supposed to be September 30, 2021 for providers who received funds between April 10, 2020 to June 30, 2020, but HRSA has established a 60-day grace period that lasts through the end of November for providers to submit their first report. To find out more information about PRF reporting (including accessing the PRF Reporting Portal), please click here.

Please feel free to reach out to me with any questions you may have about the PRF and this latest distribution! Also, there are other financial support options to explore (if you haven’t already), including COVID-19 “Uninsured Program.” The program provides reimbursement at Medicare rates for COVID-19 treatment and testing and testing-related services delivered to patients who are uninsured. Let me know if you want more information on these other options as well.

Until next week, this is Jeffrey saying, enjoy reading regs with your eggs.

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