New Provider Relief Fund Guidance

November 10, 2020

New Provider Relief Fund Guidance 

To provide relief to hospitals, physicians and other health care providers, the Coronavirus Aid, Relief and Economic Security (CARES) Act set aside $100 billion in April 2020 to the Provider Relief Fund (PRF). Two additional rounds of funding have since become available, bringing the total of PRF funds to $175 billion.

On October 28, 2020, the U.S. Department of Health and Human Services (HHS) updated its FAQ documents on PRF payments with new information on auditing and reporting. The new FAQs also address the use of PRF funds for a COVID-19 vaccine.


PRF Funds for COVID-19 Vaccine
The new FAQs clarify that health care providers can use PRF payments to cover the distribution of a COVID-19 vaccine if it is licensed by the U.S. Food and Drug Administration. PRF funds can also be used to prepare for distribution of a vaccine. For instance, PRF funds can be used to purchase doses of the vaccine, pay personnel costs incurred to administer the vaccine and buy refrigeration to store the vaccine.


However, PRF funds cannot be used for purchasing and administering the vaccine to beneficiaries of Medicare, Medicaid and the Children’s Health Insurance Program (CHIP) since those costs are already covered under these programs.


Post-Payment Reporting Guidance
The FAQs released on Oct. 28 expand upon the Oct. 22 post-payment reporting guidance issued by the HHS and add new details on the reporting of expenses and lost revenues related to COVID-19.

Updates include:

  1. Lost Revenues – The new FAQs state that providers cannot use 2020 budgeted revenues to report lost revenue. This is a reversal of a position the HHS had taken in a June 2020 version of the FAQs. The maximum amount of lost revenues eligible for PRF reimbursement is the total change in patient service revenue from calendar year 2019 to calendar year 2020 less the amount of PRF-eligible health care expenses.
  1. Capital Equipment – COVID-19 capital equipment expenses for heath care providers must have a useful life of 12 months or less or depreciation of one year to be eligible as a PRF reimbursement. The FAQ states that relevant depreciation amounts should be reported based on the equipment useful life, purchase price and depreciation methodology.
  1. Cost Reimbursements - Only incremental costs not reimbursed through full cost reimbursement methodologies are eligible expenses under the PRF.
  1. Example Expense Calculations – For COVID-19 expenses not reimbursed by other sources, the new FAQs provide guidance and example calculations for health care providers to estimate those amounts.
  1. Spending Timeline – PRF must be spent by June 30, 2021 with final reporting due by July 31, 2021. Guidance has yet to be released on how unspent funds are to be returned to HHS. However, it is clear that accrued interest on unspent funds must be included in the amount returned to HHS.

Additional Guidance

The new FAQs address other topics including the use of PRF funds for employee compensation, payments received in error, payments to a health care provider that has changed ownership and documentation requirements.


For a complete understanding of the PRF and a look at the FAQs, click here:

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