HHS Distributes Another $9B from Provider Relief Fund

HHS announced the distribution of approximately $9 billion in Provider Relief Fund (PRF) Phase 4 payments to reimburse healthcare providers who experienced pandemic-related revenue losses and expenses. 

The average relief payment for small providers is $58,000, while the average for medium providers is $289,000 $1.7 million for large providers.

“As we continue to fight the pandemic, the Biden-Harris Administration remains committed to supporting our health care providers on the front lines,” HHS Xavier Becerra said in the announcement. 

“This vital funding will ensure critical health care services are delivered to communities across the country – including to those who are disproportionately impacted by the pandemic and medically-underserved. We will continue to make health care accessible for everyone who needs it and reach people where they are.”

Over 69,000 providers will be receiving Phase 4 payments, starting this week. The Health Resources and Services Administration (HRSA) stated it is reviewing the remaining Phase 4 applications, and it will make the remainder of Phase 4 payments in 2022.

“While we have made over half a million relief payments to [healthcare] providers throughout this pandemic, we know that many continue to face COVID-19 related financial challenges,” Acting HRSA Administrator Diana Espinosa said in the press release. 

“HRSA is committed to providing as much support as we can through the Provider Relief Fund to health care providers as they continue responding to and recovering from this crisis.”

The PRF Phase 4 payments are part of the $25.5 billion funds for healthcare providers to recruit and retain staff, purchase masks and other supplies, modernize facilities, and other activities needed to respond to COVID-19. HHS announced the funding in September, along with $8.5 billion from the American Rescue Plan for rural providers.

At that time, HRSA released the Phase 4 payment methodology giving providers an overview of the reimbursement process.

PRF Phase 4 consisted of the base payment and the bonus payment. The base payment is approximately 75 percent of Phase 4 funding and will be allocated to providers based on their expenses and decreased revenues from July 1, 2020, to March 31, 2021. 

In addition, the HRSA is reimbursing a higher percentage of losses and expenses for smaller providers as they were hit hard by the pandemic and have historically operated on slimmer financial margins compared to larger providers.

The bonus payment is approximately 25 percent of Phase 4 funding and is reimbursing providers based on the amount and services provided to Medicare, Medicaid, or CHIP patients.