Four Steps Provider Relief Fund Recipients Should Take Now to Meet HHS Reporting Requirements

The release of new HHS reporting requirements for recipients of the Provider Relief Fund (PRF) has many health care providers looking closely at their systems and processes to make sure they are prepared to conform to the reporting requirements. If your organization received a PRF distribution, taking these four key steps now can help you make the most of your PRF funds while preparing for a potential audit.

Make sure your tracking distribution systems collect the right information. Distributions should be recorded separately to: 1) identify the value of receipts within given receiving periods 2) determine the applicable use of fund deadlines, as distribution thresholds may apply 3) determine the applicable reporting period, and 4) calculate interest earned, if applicable, over the distributions.

Review and update your organization’s internal policies to ensure that all valid PRF allowances are specifically identified and classified. Valid uses of PRF include personnel and benefits, rental costs and lease payments, equipment, facilities and many other expenses your organization may have paid to prevent, prepare for and/or respond to the coronavirus. To encourage their appropriate use, make sure these PRF-related expenditures are specifically authorized in your organization’s internal policies and communicated.

Keep offsetting amounts and limitations in mind for such expense categories such as direct patient billing, commercial insurance, Medicare/Medicaid, FEMA funding and salary limitations (including capped compensation allowances).

Create an effective expenditure tracking process that maps expenses to the appropriate cost centers. Since all distributions may be subject to an audit by HHS, it is important to have a strong tracking process in place as early as possible before funds are used. Your organization’s expenditure tracking process may include:

• Establishing separate cost center(s) to record expenditures attributable to the Coronavirus. Separate cost center recording will also support accurate and appropriate movements of PRF between the balance sheet and income statement (classification consideration).
• Implementing regular audit practices (or consulting a third party) to maintain the integrity of transactions recorded under these cost centers and ensure costs are compliant and appropriately supported.

Calculate lost revenues in order to make the most of remaining PRF funds.  HHS allows PRF recipients to choose one of three options for calculating lost revenues attributable to the Coronavirus:

• comparison of year/year actual patient revenues;
• comparison of budget/actual patient revenues; or
• another reasonable method (that can be appropriately supported).

It is important to note that the third option is subject to increased likelihood of HRSA audit and justification for rationale.

If your organization has not yet exhausted its PRF distribution with valid expenses, an evaluation of the options listed above may help maximize your claim and the amount that may be retained out of your PRF balances. Additionally, analyses must be accurately prepared and appropriately supported.

For more information on reporting requirements or if you need assistance with establishing or evaluating your processes to satisfy reporting requirements, contact us. We are here to help.

Authored by Yoram Kappel, CA. 

© 2021