HHS Loosens Provider Relief Fund Restrictions, Allows Agencies to Cover Lost Revenue

In response to ongoing opposition from both lawmakers and providers, the Department of Health and Human Services (HHS) recently announced it has made changes to its rules surrounding COVID-19 relief funding.

The department’s amended rules now allow providers to use Provider Relief Fund (PRF) money toward lost revenue that’s potentially unrelated to COVID-19.

“After reimbursing health care-related expenses attributable to coronavirus that were unreimbursed by other sources, providers may use remaining PRF funds to cover any lost revenue, measured as a negative change in year-over-year actual revenue from patient care related sources,” HHS said in a recent statement.

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Before the recent update, HHS placed a stricter stipulation on what would eventually amount to $175 billion of funds provided through the CARES Act stimulus package. This was to prevent providers from becoming more profitable in 2020 than 2019 by improperly using federal funds for financial gain instead of an operational lifeline.

While the PRF program was “well-intentioned,” it has been mired with challenges associated with conflicting and unclear guidance along the way, Matt Wolfe, a partner at law firm Parker Poe, told Home Health Care News.

“In September, when HHS put out guidance that seemed to limit or restrict these provider relief funds, there was understandably a significant amount of pushback by providers and members of Congress,” Wolfe said. “When [HHS] created this program under the CARES Act, they were really trying to make sure that health care providers of all stripes were able to respond to the public health emergency and keep their doors open.”

Since its formation, the PRF has accomplished its goal of keeping home health agencies and other afloat, Wolfe believes. Still, over the past couple of months, there had been growing concern that HHS was becoming more restrictive than what Congress originally intended.

“You’re putting providers in this difficult situation of saying, ‘Well, I needed this money because it’s what allowed me to make it through this unprecedented challenge,’” he said. “At the same time, they’re wondering, ‘If I retain the funds and don’t pay them back, am I going to have some potentially large obligation down the road?’”

HHS’s amendment to the reporting requirements is key because it clarifies whether providers should hang on to the funds.

While certainly an improvement for home health agencies, and “a step in the right direction,” there’s still work that needs to be done to accomplish the Congressional intent of the program, according to Wolfe.

“For example, it allows a provider to be able to show lost revenue attributable to the coronavirus, essentially by looking at 2019 patient-related revenue compared to 2020 patient-related revenue,” he said. “Depending on your operations in 2019, you may have had an acquisition or some other type of growth at the beginning part of 2020. You may have actually still lost revenue that isn’t dissipated revenue in 2020, but that simplistic comparison of 2019 to 2020 may not actually show that.”

As more providers retain funds, the industry will likely also see an increase in federal oversight.

Since providers are dealing with federal dollars, there’s the possibility of False Claims Act liability, according to Wolfe.

Moving forward, it will be critical for providers to receive clarity in order to continue to make informed business decisions.

“There’s a lot still to be determined in terms of how you’re going to comply with these reporting requirements,” Wolfe said. “Some of the decisions about how to report are going to influence how you spend the money. It’s really critical that HHS provides that clarity so that providers can make decisions about how to utilize these funds if they haven’t already.”

The HHS to loosen the Provider Relief Fund rules marks the second significant relaxation of rules around federal support for health care providers in recent weeks.

The Centers for Medicare & Medicaid Services (CMS) also extended repayment terms for its Medicare Accelerated and Advance Payment Program earlier this month.

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