The U.S. Department of Health and Human Services (HHS) has announced an additional $413 million in Phase 4 Provider Relief Fund (PRF) payments to be distributed to more than 3,600 healthcare providers. The timing of the distribution was not announced, but HHS said that the new release means that approximately 89 percent of Phase 4 applications have been processed.

The announcement follows nearly $9 billion released by HHS in December 2021 and another $560 million to COVID-impacted providers in February 2022. Overall, the Department said, it has distributed nearly $12 billion in Phase 4 payments to more than 82,000 healthcare providers since November 2021.

Provider Relief Fund payments are designed to help healthcare providers whose operations have been negatively impacted by the variants of the COVID-19 pandemic. According to the agency, the funds are intended to help providers “to remain in operation and to continue supporting patient care by covering a variety of costs including personnel, recruitment and retention initiatives, medical supplies, information technology, and many other functions.” The agency also noted that Phase 4 payments are intended to reimburse Medicare and Medicaid providers for lost revenues and increased expenses at a higher rate compared to larger providers.

The U.S. Department of Health and Human Services has begun distributing $30 billion in relief funding to healthcare providers. The money is part of the $100 billion designated for healthcare providers and organizations in the CARES Act.

The news of the distributions was released today, April 10, by HHS as the first payments were arriving in providers’ accounts—or the central billing accounts for provider groups. The money is considered the first tranche of the $100 billion; expectations are for the additional tranches to be designated for hospitals, other providers, and to provide enhanced support in rural or otherwise under-served communities.

The funds are cash payments, not loans, and do not need to be repaid. Nor do they affect applications for or participation in other COVID-19 relief programs, including the Families First Coronavirus Response Act, the Paycheck Protection Program under the CARES Act, and Centers for Medicare and Medicaid Services (CMS) Accelerated and Advance Payment Program.

Eligibility is restricted to providers and facilities that receive Medicare fee-for-service (FFS) reimbursements and is determined by their 2019 Medicare FFS reimbursement totals. HHS paid $484 billion in Medicare FFS reimbursements last year, making the $30 billion being distributed slightly above 6 percent of that amount. A provider can estimate their payment by dividing their 2019 Medicare FFS payments received, excluding Medicare Advantage, by $484 billion, and multiplying that amount by $30 billion. We have received early reports that providers are receiving up to 9 percent of their 2019 Medicare FFS reimbursement totals.

Providers must attest to receiving the funds and agree to the HHS terms and conditions within 30 days of receipt of payment (see https://www.hhs.gov/sites/default/files/relief-fund-payment-terms-and-conditions-04092020.pdf). Note, the HHS will open these attestation submissions the week of April 13, 2020. As well, providers must agree not to seek collection of out-of-pocket payments from a COVID-19 patient that are greater than what the patient would have otherwise been required to pay if the care had been provided by an in-network provider.

We’re here to help. Call us with your questions or concerns at 239-482-5522; or email me at mdeluca@hbkcpa.com.

For more details from HHS, visit https://www.hhs.gov/provider-relief/index.html.