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We are now more than six months into the pandemic and the Department of Health and Human Services (HHS) announced on October 1st, 2020 that the third phase of their Provider Relief Fund (PRF) general distributions would be open for applications from October 5 – November 6, 2020. While the funding is not considered a loan and does not need to be paid back if the terms and conditions are met, it is important to note that the reporting requirements have recently become a cause of concern for many providers. That being said, there has been a lot of confusion surrounding who is eligible for this latest round of funding and so this newsletter will bring some clarity to some of the more common questions we have been hearing.
In order to be eligible for this latest round of funding, providers must fall into one of the following categories:
- Have received funds from prior distributions.
- Have been eligible for funds from prior distributions but never applied or rejected these funds
- Behavioral health and other providers who were ineligible for prior distributions
- Those providers who began practicing from January 1 – March 31, 2020
The application process looks very similar to past distributions where an application was required after the Tax ID Number (TIN) was verified, but HHS has expanded the financial information required in order to complete the application process. For the phase 3 general distribution, providers must submit revenue and expense data for the 1st and 2nd quarters of 2019 and 2020. Presumably, this is to help substantiate a provider’s claim that they have had to combat additional lost revenue or increased expenses and therefore qualify for this newest round of funding. To begin the application process, click here.
What If I Already Received 2% Of Annual Revenue From A Prior Distribution?
While it is true that prior distributions have limited the funds received to 2% of annual revenue from patient care, HHS has said they will take into account “financial losses and changes in operating expenses caused by the coronavirus” for phase 3 payments. First, what this means is that a provider who have previously received a distribution in the amount of 2% might still be eligible to receive an additional payment if they can prove they had a substantial change in operating revenues or expenses from patient care, attributable to the coronavirus. While HHS has not said how they will determine the losses in revenue or increase in expenses that qualify for additional funds, we do believe this criteria will significantly narrow the applicant pool.
Additionally, those providers who had previously received a distribution of less than 2% of their annual revenue could still be eligible to receive a payment that would be equal to, in aggregate, around 2%.
So far, HHS has not given an exact formula for their payment methodology but what they have said is that once all applicants who qualify for payments to increase their total funds received to 2% of their annual patient care revenue have been processed, the balance of the $20 Billion will be allocated to those providers who have applied for additional funds on top of the 2% cap. HHS will take into account a provider’s change in operating revenues and expenses, including those incurred as a result of the coronavirus, and payments already received through prior distributions.
HHS has encouraged all interested providers to apply early, as this would greatly assist them in their review process.
- The deadline for phase 3 applications is November 6, 2020. To apply, click here.
- If you have received less than 2% of your 2019 annual patient care revenue in funds, or received no funding at all, you could be eligible for Phase 3.
- If you have experienced a substantial loss in patient care revenue or expenses related to the coronavirus, you might be eligible
- The funds still do not have to be repaid if the terms and conditions are met, but the reporting requirements are still a cause for much confusion. Stay tuned to WebsterRogers LLP for future updates from HHS.
If you think you might be eligible for a payment from phase 3, or you simply want to talk through what your recovery from COVID-19 looks like, WebsterRogers has a team of dedicated healthcare consultants on standby.