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HHS Communication Update

Tuesday, October 6, 2020

Summary of Department of Health and Human Services’ Post-Payment Reporting Requirements

In late September, the Department of Health and Human Services (HHS) issued the Post-Payment Notice of Reporting Requirements (reporting requirements). These reporting requirements are applicable to healthcare providers who have received over $10,000 in relief funding from the General and/or Targeted Distributions through the Provider Relief Fund (PRF). Separate reporting requirements for other PRF distributions are expected to be published at a later date. The reporting requirements are significantly different than previously published guidance, including the frequently asked questions document published on the HHS website that we discussed in the Accounting & Auditing Update session of our Healthcare Seminar. The most significant change in the reporting requirements is the definition of lost revenues. In prior guidance released by HHS, there were several examples for the calculation of lost revenue related to the coronavirus, including budget versus actual comparison.

The reporting requirements now specify the use of a comparison to the prior calendar year patient related operating income. Providers should first measure qualifying expenditures incurred not reimbursed by other sources. Remaining proceeds are then applied to lost revenues. Additionally, the ability to use lost revenues is limited to a recipient’s calendar year 2019 net gain from health care related sources. Providers with a net loss may only report lost revenues to offset 2020 net losses. Providers will need to reevaluate the effect the modified definition of lost revenues has on PRF revenue recognition.

A submission portal is expected to open in January 2021. Currently, the due date for online reporting of 2020 expenses is February 15, 2021. The final reporting deadline of July 31, 2021 for providers who did not expend PRF funds prior to December 31, 2020 has been confirmed in the Post-Payment Reporting Requirements. These dates may be modified in future HHS communications.

There are a number of questions that remain unanswered regarding the use and reporting of PRF funds. HHS has indicated its intent to offer clarity and assistance to aid in the reporting process. We will provide updates on our website and social media platforms as new and clarified information continues to be released, including the anticipated OMB Fall Compliance Supplement.

Phase 3 General Distribution Funding Announced

On October 1, 2020, HHS announced $20 billion in new funding for providers through the Phase 3 General Distribution allocation of the PRF. Those eligible for the new funding include providers who have already received PRF payments as well as previously ineligible providers, such as those who began practicing in 2020 and an expanded group of behavioral health providers. Providers must apply for additional funding through the HHS Provider Relief Fund Application and Attestation Portal. Providers will have from October 5, 2020 through November 6, 2020 to apply, but HHS is encouraging providers to apply early in the window.

Should you have any questions or want to further discuss, please contact:
Jamie Bova (jbova@fcc-cpa.com), Mary Katherine Buckley (mbuckley@fcc-cpa.com), or any member of your Fust Charles Chambers LLP or MicroscopeHC service team.