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Additional COVID-19 Relief for Health Care Providers

Additional COVID-19 Relief for Health Care Providers

On September 10, 2021, the Department of Health and Human Services (HHS) announced that it will distribute $25.5 billion in additional COVID-19 relief funds to health care providers. That amount includes $17 billion as part of a Phase 4 distribution from the Provider Relief Fund (PRF) and $8.5 billion in American Rescue Plan (ARP) Act funds for rural providers. A single application process for both funding sources is scheduled to open on September 29.

Phase 4 Distribution
75% of Phase 4 funds will be distributed based on providers’ COVID-19 lost revenues and expenditures from July 1, 2020 through March 31, 2021. Because smaller providers tend to operate on thin margins, they will be reimbursed at a higher rate compared to larger providers.

The remaining 25% of the $17 billion in PRF Phase 4 will be distributed in the form of bonus payments to providers based on the type and amount of services they provide to Medicare, Medicaid, and Children’s Health Insurance Program (CHIP) patients.

Phase 3
In their September 10 announcement, HHS also released detailed information about the methodology used to calculate PRF Phase 3 payments, which were distributed in late 2020 and early 2021.
Providers who believe that their Phase 3 payments were inaccurate will now have the opportunity to request a reconsideration. Details on how to apply are expected soon.

ARP Rural Distribution
ARP payments will be made to providers based on the amount and type of Medicare, Medicaid and CHIP services provided to patients who live in rural areas, as determined by the Federal Office of Rural Health Policy (FORHP). These payments will generally be based on Medicare reimbursement rates.

Reporting Grace Period
A 60-day grace period has been granted by HHS for providers to report on the usage of funds in the first PRF Reporting Period. While the reporting deadline remains September 30, 2021, HHS has announced that they will not initiate collection activities or enforcement actions for noncompliant providers during the grace period.

The grace period runs from October 1, 2021 through November 30, 2021. In addition, all unused funds must be returned no later than 30 days after the end of the grace period (December 30, 2021).

More details on the application process for PRF Phase 4 and ARP Rural payments can be found at the Health Resources & Services Administration (HRSA) website: https://www.hrsa.gov/provider-relief or reach out to your Herbein advisor.

Article contributed by David Peritz. For additional information contact us at info@herbein.com