What You Need to Know About the Provider Relief Fund

By Courtney Stevenson

Like many businesses, independent providers have lost a significant amount of revenue during the pandemic. Even though most healthcare organizations have bounced back and are doing better now, those months of losses still have an impact on your business. The good news is, there is help available to recover missed revenue due to COVID-19. You just need to know how to access it.

The Health Resources and Services Administration has provided information on two avenues of government support. Below is a summary of the Provider Relief Fund and the American Rescue Plan benefits as well as how to apply for them directly from the HRSA website.

Provider Relief Fund (PRF)

The Biden administration is making available $25.5 billion in relief funds to providers to offset revenue loss and higher expenses due to the pandemic. As part of the Biden-Harris Administration’s ongoing commitment to equity, and to support providers with the most need, Phase 4 of the PRF has allotted $17 billion for a broad range of providers for their lost revenues and COVID-19 expenses. Phase 4 payments will be based on providers’ lost revenues and expenditures between July 1, 2020, and March 31, 2021. While HHS is targeting smaller providers, those eligible include providers or suppliers who bill Medicare fee-for-service (Parts A and/or B) or Medicare Advantage, Medicaid (fee-for service or managed care) or CHIP as well as dental service providers, state-licensed or certified assisted living facilities and behavioral health providers.

Who is Eligible to Apply for the PRF and How Will Payments Be Calculated

75% of the Phase 4 allocation will be calculated based on changes in operating revenues and expenses.

  • Large providers will receive a minimum payment amount that is based on a percentage of their changes in operating revenues and expenses.
  • Medium and small providers will receive a base payment plus a supplement, with small providers receiving the highest supplement, as smaller providers tend to operate on thin margins and often serve vulnerable or isolated communities.
  • HHS will determine the exact amount of the base payments and supplements after analyzing data from all the applications received to ensure we stay within our budget and funds are distributed equitably.
  • No provider will receive a Phase 4 payment that exceeds 100% of their losses and expenses.
  • HHS will continue to use risk mitigation and cost containment measures in Phase 4 to protect program integrity and preserve taxpayer dollars.
  • 25% of the Phase 4 allocation will be put towards bonus payments that are based on the amount and type of services provided to Medicaid, CHIP, and Medicare patients.

HHS will price Medicaid and CHIP claims data at Medicare rates, with some limited exceptions for some services provided predominantly in Medicaid and CHIP

American Rescue Plan (ARP)

An additional $8.5 billion will be available through the ARP. Providers who deliver services to Medicaid/CHIP and Medicare beneficiaries living in Federal Office of Rural Health Policy (FORHP)-defined rural areas can expect ARP payments to be reimbursed at higher Medicare rates. This is meant to ensure equity for those serving low-income children, pregnant women, people with disabilities, and seniors. Patient, not provider, location will determine eligibility and reimbursement will be based on the volume of services provided to these patients. While applicants are not required to verify if patients live in a qualifying area, the Health Resources and Services Administration (HRSA) will base payments on data already available to it on the amount and type of Medicare, Medicaid, and CHIP services provided to rural patients.

To minimize the administrative burden as well as expedite the application process, providers will apply for both programs in a single application, beginning on September 29, 2021 and closing on October 26, 2022. HRSA will use existing Medicaid, CHIP and Medicare claims data in calculating payments. A condition to utilize the funds awarded from the PRF is they must be used for patient care. If at any point during the period where the funds are eligible for use, the PRF recipient will be required to notify the HHS Secretary of any merger with, or acquisition of, another health care provider. 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.

Payments from both programs can be used for lost revenues or eligible expenses incurred from Jan. 1, 2020, through Dec. 31, 2022.  Providers who believe their Phase 3 payment was calculated incorrect will also have an opportunity to request a reconsideration.

ARP Rural Distribution:

Providers who serve Medicaid, CHIP, and Medicare patients who live in rural communities are eligible for the ARP Rural payments.

  • HHS will make payments to providers based on the amount and type of Medicare, Medicaid, and CHIP services provided to rural patients from Jan. 1, 2019, through Sept. 30, 2020.
  • HHS will price Medicaid and CHIP claims data at Medicare rates, with some limited exceptions for some services provided predominantly in Medicaid and CHIP.
  • Providers who serve any patients living in Federal Office of Rural Health Policy-defined rural areas with Medicaid, CHIP, or Medicare coverage, and who otherwise meet the eligibility criteria, will receive a minimum payment.

To prepare for the application process, supporting documentation and information needed to complete an application must include:

  • Applicant TIN and TINs for any subsidiaries included in the applicant TINs IRS tax filing.
  • Internally generated financial statements that substantiate operating revenues and expenses from patient care in 2019 Q1, Q3, and Q4; 2020 Q3 and Q4; and 2021 Q1.
  • Federal income tax return, audited financial statements, or internally generated financial statements submitted in their entirety:

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HPA is Here for You!

Our team here at Health Professionals Alliance is here to help you through this process and answer any questions you may have along the way. We also strongly suggest you include your CPA to make sure all your information is correct in your application so that you don’t incur and unforeseen liabilities. We hope this information helps keep you up to date and you contact us if you need any assistance.

About Courtney Stevenson

Courtney StevensonCourtney brings over a decade of fine-tuning a career dedicated to the healthcare industry. She realized early on that if she could somehow combine her love of health with her passion for maintaining meaningful relationships, she might find a way to have a lasting positive impact on people’s lives. Courtney began her professional journey by earning a Bachelors in Health Management and Policy from Oregon State University as well as a Certificate in Healthcare Administration and Management from OHSU. Prior to joining HPA, she managed a provider relations team for a nationwide insurance company and coordinated member services for a large health plan in Oregon. This experience gives Courtney an edge in the industry because she understands what motivates payors to come to the table. Her payor contracting and credentialing philosophy is one of open communication and straightforward negotiations because she knows what motivates payors to meet her halfway. With a proven track record of going to the mat for her clients every time it is warranted and helping them adjust expectations when necessary, Courtney brings that balance necessary to facilitate success in the small pool that is the Oregon healthcare industry. Her deep commitment to providing detailed, comprehensive analysis of your payor contracts is deep seeded and always fruitful. If a path exists for your practice to negotiate the best reimbursement rates among your competitors, Courtney will find it. She’s the perfect addition to any payor contracting endeavor.