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Update On Phase 3 Of The HHS Provider Relief Fund

As we announced last week, HHS has opened up the portal for providers to apply for Phase 3 of the HHS Provider Relief Fund (PRF). Since that initial announcement, HHS has released a few additional details, but there are still some questions that remain unanswered. HHS is hosting a webinar on October 15th  at 3:00 p.m. Eastern Time. If you register for the webinar, there is a place where you can enter any question(s) that you would like to have answered during the webinar. We encourage you to participate in this webinar, as it may help you make a decision as to whether applying for Phase 3 funding is right for your company. The link to sign up for the webinar can be found here. 

Providers are able to apply for Phase 3 funding until November 6, and can begin that application process here: https://cares.linkhealth.com/#/. If you want to prepare and see what kind of information you will be asked for when you apply, a sample application form can also be found here: https://www.hhs.gov/sites/default/files/provider-distribution-application-form.pdf.

Many are wondering how much additional funding they might qualify for in this phase of the PRF. The answer to that is not very clear yet. HHS is not being very specific yet, and that is in part because they don’t yet know how much will be left of the $20B after they get everyone up to the 2% that hasn’t received that in full yet. They need to first make all applicants whole who have not yet received their 2% of patient care revenue. Once they have done that, the remaining money will be paid to applicants, based on an unknown calculation, that will be above the 2% and will factor in changes in revenues and expenses. The official guidance released to date reads as follows:

Eligibility - HHS is making a large number of providers eligible for Phase 3 General Distribution funding, including:

  • Providers who previously received, rejected or accepted a General Distribution Provider Relief Fund payment. Providers that have already received payments of approximately 2% of annual revenue from patient care may submit more information to become eligible for an additional payment.
  • Behavioral Health providers, including those that previously received funding and new providers.
  • Healthcare providers that began practicing January 1, 2020 through March 31, 2020. This includes Medicare, Medicaid, CHIP, dentists, assisted living facilities and behavioral health providers.

·       Additional Funding Amount - All provider submissions will be reviewed to confirm they have received a Provider Relief Fund payment equal to approximately 2 percent of patient care revenue from prior general distributions. Applicants that have not yet received Relief Fund payments of 2 percent of patient revenue will receive a payment that, when combined with prior payments (if any), equals 2 percent of patient care revenue.

With the remaining balance of the $20 billion budget, HRSA will then calculate an equitable add-on payment that considers the following:

  • A provider’s change in operating revenues from patient care
  • A provider’s change in operating expenses from patient care, including expenses incurred related to coronavirus
  • Payments already received through prior Provider Relief Fund distributions.

The actual percentage paid to providers will be in part dependent of how many providers apply in Phase 3, and will be determined after the application deadline. Payments will also take into account funds received as part of previous Targeted Distributions. Providers that have not yet received and kept a payment that is approximately 2% of annual revenue from patient care as part of the General Distribution will receive at least that amount as part of their Phase 3 payment. Providers that began providing patient care in 2020 will be paid approximately 2% of patient care revenue based on the applicant’s reported financial information for those months in 2020 that they were in operation. HHS will determine final payment amounts above 2% of annual patient care revenue for applicants after the deadline once all applications have been received and reviewed.

HHS has not yet determined whether there will be additional General Distribution phases. If you meet the eligibility requirements for this Phase 3 distribution, you should apply.

Some additional helpful resources can be found here:

Phase 3 Terms & Conditions 

FAQs for all PRF Phases 

Overview and full eligibility requirements for all phases, including Phase 3

As a reminder, any provider who receives payments totaling over $10,000 from any phase(s) of the HHS PRF will be required to submit reports showing how the money was used. All funds not used by June 30, 2021 will need to be returned. VGM will continue to watch for and pass along any new information as it is released. The reporting requirements are outlined here: https://www.hhs.gov/sites/default/files/provider-post-payment-notice-of-reporting-requirements.pdf?language=es, https://www.hhs.gov/sites/default/files/reporting-requirements-summary.pdf?language=es, https://www.hhs.gov/coronavirus/cares-act-provider-relief-fund/reporting-auditing/index.html?language=es, and https://www.hhs.gov/coronavirus/cares-act-provider-relief-fund/faqs/provider-relief-fund-general-info/index.html?language=es#auditing-reporting-requirements.

Please reach out to Craig Douglas or Mark Higley if you have questions regarding these HHS PRF phases.