Skip to Content

Congress changes “lost revenue” calculation for Provider Relief Funds; HHS delays initial reporting deadline

on Tuesday, 2 February 2021 in Health Law Advisory: Andrew D. Kloeckner, Editor

Much like Marty McFly and Doc Brown in the popular “Back to the Future” movie franchise, Congress turned back the clock on the “lost revenue” calculation for Provider Relief Fund (“PRF”) reporting. Under the Coronavirus Response and Relief Supplemental Appropriations Act, 2021 (“CRRSA”) (Pub. L. 116-260), which was signed into law by President Donald J. Trump on December 27, 2020, Congress appropriated an additional $3 billion for the PRF and also changed the “lost revenue” calculation back to the guidance from the June 2020 PRF FAQs.

HHS released updated “General and Targeted Distribution Post-Payment Notice of Reporting Requirements” on January 15, 2021 (available here) to reflect the changes in the CRRSA. Under the prior reporting requirements released on November 2, 2020, recipients were first required to apply PRF payments toward eligible healthcare related expenses attributable to the coronavirus that another source has not reimbursed and is not obligated to reimburse. After reporting on eligible expenses, recipients were then permitted to apply PRF payments toward patient care lost revenue. The lost revenue calculation was limited to “the amount of the difference between [the PRF recipient’s] 2019 and 2020 actual patient care revenues.”

Under the new reporting requirements released on January 15, 2021, recipients of PRF payments are still required to report on eligible healthcare expenses first, but now have three options for calculating lost revenue. The first option is the same calculation from the November 2, 2020 reporting requirements—the difference between 2019 and 2020 actual patient care revenue. The second option is “the difference between 2020 budgeted [patient care revenue] and 2020 actual patient care revenue.” The third option is “any reasonable method of estimating revenue.”

Recipients that elect either the second or third option for calculating lost revenue should take additional steps for compliance as instructed by HHS. Recipients electing to compare 2020 budgeted patient care revenue and 2020 actual patient care revenue must use a budget that was established and approved before March 27, 2020. Recipients will be required to submit an attestation that the budget was either ratified, certified, or adopted by the CEO, CFO, or other responsible individual before that date and must keep appropriate documentation of the ratification, certification, or adoption.

PRF recipients looking at the third option of “any reasonable method of estimating revenue” are subject to additional compliance requirements and will be required to: justify why it believes that the alternative is a “reasonable” method of calculating lost revenue; and “how the identified lost revenues were in fact a loss attributable to coronavirus” as opposed to lost revenue attributable to other issues. Recipients electing the third option will have a greater compliance burden to justify its proposed methodology and HHS has stated that they will face an “increased likelihood of audit by HRSA.”

When it released the new reporting requirements on January 15, 2021, HHS also announced that it was delaying the original reporting deadline of February 15, 2021 for PRF payments used in CY2020; HHS did not, however, announce a new reporting deadline. HHS opened the reporting portal on January 15, 2021 as originally planned and encouraged recipients of PRF payments to create an account as they await further information on the new reporting deadline. Recipients of PRF payments that use any funds from January 1, 2021 through June 30, 2021 are still required to submit a second report through the portal by July 31, 2021.

1700 Farnam Street | Suite 1500 | Omaha, NE 68102 | 402.344.0500