After Pushback, HHS Revises Provider Relief Fund Reporting Rules

HHS is walking back a change it made to Provider Relief Fund reporting rules in September after hospitals and lawmakers warned the change could result in some providers having to return payments.

According to a recent announcement, HHS amended the reporting instructions on October 22 to allow hospitals to calculate lost revenues based on the difference between 2019 and 2020 actual revenues.

The updated reporting instructions reinstated requirements from an FAQ published by HHS in June and marks a reversal from the reporting instructions in September that said hospitals should calculate lost revenues based on the change in year-over-year net operating income from patient care related sources.

The amended reporting instructions increase flexibility around how providers can apply payments from the Provider Relief Fund toward lost revenues attributable to COVID-19, the department stated in the announcement.

HHS also added in the new instructions that providers are able to fully apply Provider Relief Fund distributions to lost revenues.

The change is a win for hospitals, which petitioned HHS to reinstate the definition of lost revenues in the June FAQ.

“Communities rely on America’s hospitals and health systems to be strong and resilient so they can provide essential public services, particularly during emergencies and public health challenges,” the American Hospital Association (AHA) said in a September 25 letter to HHS. “The PRF funds have helped them continue to put the health and safety of patients and personnel first, and in many cases, ensure they are able to keep their doors open. HHS’s Sept. 19 guidance jeopardizes this position and will come at the cost of access to care for patients and communities.”

HHS explained in the recent announcement that it had changed the definition of lost revenues in the September reporting instructions “to balance fairness and establish guardrails to restrict some providers from receiving distributions that would make them more profitable than they were before the pandemic.”

According to department officials, some healthcare providers were hit harder than others during the COVID-19 public health emergency, and for those who were not hit as badly, distributions from the Provider Relief Fund were so significant that they became more profitable in 2020 compared to the pre-pandemic period.

However, forcing providers to return the payments would run counter to the purpose of Congress’ Provider Relief Fund, hospitals argued. It would also be an administrative nightmare, the AHA added.

The latest change to Provider Relief Fund reporting requirements addresses concerns expressed by hospitals and later, two groups of Senators that reiterated the challenges presented by the September reporting instructions.

The news of the updated Provider Relief Fund reporting requirements also came in the same announcement as updated fund distribution eligibility.

HHS also announced that the latest Provider Relief Fund application period has been expanded to include other provider types, such as residential treatment facilities, chiropractors, and eye and vision specialists who have yet to receive previous distributions.

"We have worked closely with stakeholders across the healthcare system to ensure that the Provider Relief Fund reaches all American healthcare providers that have been impacted by the pandemic," HHS Secretary Alex Azar said in the announcement. "Today, we are expanding the pool of eligible providers to include a broader array of practices, such as residential treatment facilities, chiropractors, and vision care providers that may not have already received payments."

HHS announced the Phase 3 General Distribution from the Provider Relief Fund on October 1. Through the distribution, the department will give up to $20 billion to providers on the frontlines of the COVID-19 pandemic, including a wide range of provider types and even those who have already received a distribution from the Fund.

Providers on the expanded list and all other Phase 3 applicants have until the end of day November 6 to apply for payments as part of the General Distribution. For a complete list of all eligible Phase 3 General Distribution providers types, visit the Provider Relief Fund website here.