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.

Healthcare practices that received Provider Relief Fund payments in excess of $10,000 in aggregate between July 1, 2020, and December 31, 2020, are required to report on how they spent those dollars by March 31 of this year. The Health Resources and Service Administration’s (HRSA) has opened the reporting portal for funds received during that timeframe, defined as Period 2. The moneys were to be used by December 31, 2021. Filers who were required to report in Phase 1 will be required to provide information on the related expenditures for Q3 and Q4 of 2021. (Filers who did not need to file in period one will need to report on information related to each quarter from 2019 to 2021)

Over the past two years, the HRSA has distributed funds to healthcare providers in four phases. Initially, in Phase 1, payments consisted of 2 percent of providers’ 2019 Medicare reimbursement amounts. Phase 2 welcomed additional practices, like assisted living facilities and others that don’t accept Medicare, and smaller practices, like dentists and chiropractors. The intent was to supplant revenue lost to COVID in 2020, to make these practices whole based on their 2019 revenues. A Phase 3 round extended additional payments to more providers, like rural communities and nursing homes, and Phase 4 distributions, which began in October 2021, allowed virtually any healthcare related provider to apply in an attempt to even the playing field throughout the industry.

The payments are intended to cover losses related to the pandemic, to prevent, prepare for and recover from COVID-related losses. Providers can spend the money on indirect as well as direct costs necessitated by the pandemic. For example, a practice paying $10,000 a month for rent in 2019 and serving 10,000 patients per month, but only 8,000 patients per month in 2020, could report a $2,000 per month indirect COVID-related expense. While all providers receiving payments of more than $10,000 in period 2 must report, the reporting requirements are enhanced as the aggregate payments increase, growing substantially more detailed at the $500,000 then $750,000 amounts.

Indirect costs in particular can be difficult to identify and calculate, especially for many small and mid-size providers new to the relief programs with Phase 2. As such, HBK Healthcare Solutions has been working with providers to help them develop complete and accurate reporting. As well, the HRSA has posted a Provider Relief Fund Lost Revenues Guide, which details three options for reporting revenue. Included is clarification that quarters with positive changes in revenues will be treated as zero—that is, the increase in revenue in a single quarter compared to the base period will not impact the calculation for that quarter.

On October 22, the Department of Health and Human Services (HHS) amended its Provider Relief Fund (PRF) General and Targeted Allocation, extending the Phase 3 distribution that ends November 6 to more providers and permitting recipients to apply for PRF payments for all lost revenues without limitation. Previously payments were to be capped at lost revenues defined as a negative change in year-over-year net patient care operating income.

The updated list of eligible providers includes:

• Behavioral Health Providers
• Allopathic & Osteopathic Physicians
• Dental Providers
• Assisted Living Facilities
• Chiropractors
• Nursing Service and Related Providers
• Hospice Providers
• Respiratory, Developmental, Rehabilitative and Restorative Service Providers
• Emergency Medical Service Providers
• Hospital Units
• Residential Treatment Facilities
• Laboratories
• Ambulatory Health Care Facilities
• Eye and Vision Services Providers
• Physician Assistants & Advanced Practice Nursing Providers
• Nursing & Custodial Care Facilities
• Podiatric Medicine & Surgery Service Providers

If your practice or business meets the extended provider types above, and you believe you are eligible for Phase 3 provider funds, we encourage you to apply prior to the November 6 deadline.

Should you have any questions on this round of PRF funding or any previous rounds, please do not hesitate to contact your HBK professional. You may contact also contact the national director of the HBK Healthcare Solutions, Michael DeLuca, at MDeLuca@hbkcpa.com

The federal government has announced an additional tranche of $20 billion in COVID relief funding for certain medical providers as part of a Phase 3 General Distributions. The Department of Health and Human Services (HHS) is encouraging all providers who believe they are eligible for the funds to apply as soon as possible to expedite their review and payments.

Phase 3 is targeted for providers who may have already received CARES Act Provider Relief Fund (PRF) payments and are looking to supplement the approximately 2 percent of revenues they have already received in anticipation of further revenue declines.

At this time it is our understanding the funding will not be distributed until after the application deadline of November 6 and HHS has the opportunity to review applications and calculate payments. Any funds not used to bring providers up to a 2 percent of revenue level will then be distributed in the form of an “equitable add-on payment” based on:

• A provider’s or practice’s decrease in patient care revenues
• A provider’s or practice’s increase in operating expenses from patient care (includes expenses incurred related to COVID)
• Payments received through the previous PRF funding rounds

Depending on geography, various private physician practices and dentists continue to see declined volumes and depressed financials. As well, facility and living assistance providers continue to encounter decreased censuses and revenue. While the deadline for applications is November 6, we are encouraging providers who continue to see decreases in patient-related revenue or increases in patient-related expenses to consider applying for the additional relief as soon as possible.

Should you have any questions on this round of PRF funding or previous rounds, please do not hesitate to reach out to a member of our HBK Healthcare Solutions team.

HBK’s Healthcare Solutions team, Kyle Courthamel, Michael Byrwa and Matthew Hendricks discuss the various HHS COVID-19 stimulus funding packages and how our firm is assisting healthcare clients in the accounting, reporting, compliance, planning and preparation for audit aspects of the funds.

What You Can Learn:
How to report the use of the funds to HHS/HRSA
What the HHS funds can be used for
What clients need to do now in advance of the reporting deadline
Tax and strategic planning opportunities surrounding the reporting requirements

Download the materials.

Late Friday, July 31, the Department of Health and Human Services (HHS) extended the application deadline for Phase 2 general distribution of CARES Act funds for Medicaid, CHIP and dental providers. The deadline, first extended to Monday, August 3, now extends to Monday, August 28, allowing eligible providers additional time to prepare and file their applications.

Along with the extension, HHS released two additional key provisions:

1. A new application would allow certain Medicare providers a second chance for relief funds of up to 2 percent of their annual patient revenues. In April, many of these Medicare providers received automatic payments based on their 2019 Medicare fee-for-service revenue. In the event this payment did not reach the intended goal of 2 percent of that practice’s annual revenues, providers could have applied for additional funding. Beginning the week of August 10, HHS will allow these Medicare providers—including private physician practices, facilities, etc.—who previously missed the opportunity to apply for additional funding. These applications will also be due by Monday, August 28.
2. HHS relied on 2019 data to determine the automatic payments in the original round of funding. In the event a provider or provider practice had a change in ownership in 2020, these payments might have gone to the original owners. Beginning the week of August 10, providers that did not receive funding due to a change in ownership may submit their revenue information, along with documentation proving a change in ownership, by August 28 for consideration for a Provider Relief Fund payment.



The HHS said it is working to address relief payments to new providers in 2020 along with those that have yet to receive funding for a variety of reasons. Those yet to receiving funding include providers that only bill commercially or do not directly bill for the services they provide under the Medicare and Medicaid programs.