Senior walking in nursing home with nurse

HHS Announces Distribution to Nursing Homes, Provides Guidance on Reporting and Audit Requirements

Additional Distribution
The Department of Health and Human Services (HHS) announced the distribution of an additional $5 billion from the Provider Relief Fund (PRF) to Medicare-certified long-term care facilities and state veterans’ homes (nursing homes). The intended purpose of the funding is to improve the nursing homes’ response to COVID-19 and enhance the skillset of front-line workers. To emphasize this purpose, recipient nursing homes must participate in CMS’ Nursing Home COVID-19 Training which will focus on infection control and best practices. Funding received can be utilized to address critical needs such as hiring additional personnel, implementing infection control programs, increasing COVID-19 testing, and providing additional services (i.e. technology for residents to communicate with their families who are unable to visit).

Reporting Guidance
HHS recently issued a reporting timeline for providers who received more than $10,000, cumulatively, from the CARES Act/Provider Relief Fund distributions.

Applicable CARES Act/Provider Relief Fund distributions include:

General Distributions:
  • Medicare Distribution
  • Additional Medicare Distribution
  • Medicaid, Dental & CHIP Distribution

Targeted Distributions:
  • High Impact Area Distribution
  • Rural Distribution
  • Skilled Nursing Facilities Distribution
  • Indian Health Service Distribution
  • Safety Net Hospital Distribution

Beginning October 1, 2020, the reporting system will be available to providers to submit and fulfill their reporting obligation. Providers have until February 15, 2021 to report their expenditures through December 31, 2020. Alternatively, providers with unexpended funds through December 31, 2020 have until July 31, 2021 to submit an additional final report.

Detailed instructions and a data collection template are scheduled to be released from HHS by August 17, 2020. The reports are expected to allow providers to demonstrate compliance with the Terms & Conditions of the PRF payments received. The Health Resources and Services Administration intends to provide Question and Answer webinars in advance of the submission deadline; however, the dates of these webinars have not yet been released.

Audit Requirements
In addition to the aforementioned reporting requirement, HHS indicated that providers (for-profit and not-for-profit) that expend $750,000 or more of PRF funds during their fiscal year will be subject to an audit in accordance with Government Auditing Standards. Providers which follow calendar-year reporting should be particularly cognizant of this audit requirement threshold when determining which costs are expended to each period.

What This Means for Providers Now
Providers receiving HHS should begin planning for these reporting requirements. Planning includes gathering the necessary documentation for eligible costs incurred as well as strategically identifying when costs are reported whereas to not trigger an audit, or worse, two audits.

If you have any questions about the above information or would like to further discuss planning opportunities, HBK’s Healthcare Solutions team is here to help. Feel free to contact us at (330) 758-8613 or email me directly at kcrouthamel@hbkcpa.com.

About the Author(s)
Kyle is a Senior Manager in HBK’s Youngstown office. He began his public accounting in 2011 in Allentown, Pennsylvania prior to moving to Ohio and joining HBK in 2016. His experience includes attestation engagements and consulting in the healthcare and not-for-profit industries. Kyle also works on cost reporting engagements and has focused experience in those related to Medicare and Ohio Medicaid.
Hill, Barth & King LLC has prepared this material for informational purposes only. Any tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or under any state or local tax law or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein. Please do not hesitate to contact us if you have any questions regarding the matter.

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