The Biden administration announced on September 10, 2021, the criteria for release of a $25.5 billion fourth tranche of COVID-19 relief funds. As with the other rounds of funding, the money is being made available to a wide range of health care providers and suppliers impacted by the COVID-19 pandemic. The funding includes $8.5 billion in American Rescue Plan (“ARP”) resources for providers serving federal health care program beneficiaries in rural areas, and $17 billion in Provider Relief Fund (“PRF”) payments for providers that have suffered revenue loss and increased expenditures associated with the pandemic from July 1, 2020, through March 31 2021. In total, PRF funds equal $178 billion.

Phase 4 PRF funds, available under the Coronavirus Response and Relief Supplemental Appropriations Act of 2020, will also include bonus payments targeted to providers who serve Medicaid, Children’s Health Insurance Program (“CHIP”), and Medicare beneficiaries, because of their generally lower income and greater and more complex medical needs. This approach is designed to ensure equity for providers serving low-income children, pregnant women, people with disabilities, and seniors, and direct funds to those most in need. The ARP funds will be allocated to providers that serve patients who live in rural areas, as defined by the Federal Office of Rural Health Policy at the Department of Health and Human Services (“HHS”) for similar reasons. Payments will be calculated at the generally higher Medicare rates, even for Medicaid and CHIP patients.

The Phase 4 distribution will, for the first time, include elements directed specifically towards equity—i.e., reimbursing smaller providers at a higher rate compared to larger providers, as well as issuing bonus payments based on the level of services provided to Medicaid, CHIP, and Medicare beneficiaries. Bonus payments will constitute 25 percent of the allocation, and Phase 4 payments will be capped at 100 percent of losses and expenses.

To facilitate timely distribution and minimize administrative burdens, providers may apply for both programs in a single application, with the application portal opening on September 29, 2021. Existing Medicaid, CHIP, and Medicare data will be used to calculate payments.

HHS is also releasing detailed information about the methodology used to calculate PRF Phase 3 payments. Providers believing that their Phase 3 payment was not calculated correctly may request a reconsideration. Details on this reconsideration process will be issued shortly. Last, due to the renewed surge in COVID-19 cases resulting from the Delta variant, and recent natural disasters effecting many parts of the country, HHS announced a 60-day grace period for compliance with PRF reporting requirements if recipients of PRF payments fail to meet the September 30, 2021, deadline for the first PRF Reporting Time Period.

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