The U.S. Department of Health and Human Services (HHS) announced Friday that it is releasing another $25.5 billion under the Provider Relief Fund (PRF).
Since a first round of $46 billion was sent to over 320,000 Medicare providers in April 2020, HHS has released tens of billions of follow-on dollars through a mix of general and targeted disbursement rounds. Prior to Friday, the government had sent over $118 billion to home health agencies, hospitals, skilled nursing facilities (SNFs) and other health care providers, with organizations in New York receiving the most PRF money.
“This funding critically helps health care providers who have endured demanding workloads and significant financial strains amidst the pandemic,” HHS Secretary Xavier Becerra said in a statement. “The funding will be distributed with an eye towards equity, to ensure providers who serve our most vulnerable communities will receive the support they need.”
As part of the newly announced Phase 4 PRF round, HHS and its Health Resources and Services Administration (HRSA) are releasing $8.5 billion in American Rescue Plan resources for providers that serve rural patients under the Medicare, Medicaid or Children’s Health Insurance Program (CHIP) programs.
The government is additionally releasing $17 billion “for a broad range of providers who can document revenue loss and expenses associated with the pandemic.”
“We know that this funding is critical for health care providers across the country, especially as they confront new coronavirus-related challenges and respond to natural disasters,” Acting HRSA Administrator Diana Espinosa said. “We are committed to distributing this funding as equitably and transparently as possible to help providers respond to and ultimately defeat this pandemic.”
Since last year, home health providers have viewed the PRF money with a sense of caution.
Many, in fact, have actually opted to return relief funds due to rule confusion and concerns around public perception
“The federal government shoveled out all of this money so quickly without having a crystal clear rubric of what it could be used for and what the terms and conditions were,” S. James Boumil, senior partner and owner at Boston-area Boumil Law Office, told Home Health Care News in May 2020. “I can see two or three years from now there’s going to be sort of like a day of reckoning.”
Originally, for example, PRF money was only meant to be used for direct COVID-19 expenses like personal protection equipment (PPE), which led to confusion over whether providers could use funds to cover lost revenue. HHS issued a clarification on that point in October.
“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 at the time.
Nursing homes, SNFs and hospitals have comparatively received far more in PRF dollars compared to the home health setting.
Friday’s announced clarified that the Phase 4 disbursement round will prioritize reimbursement for smaller providers that “tend to operate on thin margins and often serve vulnerable or isolated communities.” That means potential bonus payments for some, particularly those that serve Medicaid, CHIP or Medicare patients who tend to be lower-income and have greater health care needs.
“HRSA will price these bonus payments at the generally higher Medicare rates to ensure equity for those serving low-income children, pregnant women, people with disabilities and seniors,” Friday’s announcement reads.
The application portal for Phase 4 will open on Sept. 29, according to HHS.
For home health agencies and others that already accepted PRF money, HHS also announced a final 60-day grace period for meeting program reporting requirements. The current deadline, which has been pushed back multiple times, is Sept. 30.
Along with its plan to release $25.5 billion, HHS also went out of its way to say COVID-19 relief funds should not be used for M&A activity.
“To help ensure that these provider relief funds are used for patient care, PRF recipients will be required to notify the HHS Secretary of any merger with, or acquisition of, another health care provider during the period in which they can use the payments,” the announcement states. “Providers who report a merger or acquisition may be more likely to be audited to confirm their funds were used for coronavirus-related costs, consistent with an overall risk-based audit strategy.”
Post-acute care providers have already had access to billions in PRF money, but senior living operators have been largely shut out. That now changes as a result of the Phase 4 plan.
Assisted living providers are confirmed to be included in the PRF allocation, American Seniors Housing Association (ASHA) President David Schless told Senior Housing News.
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