Last week, HHS announced the distribution of more than $560 million in Provider Relief Fund (PRF) Phase 4 General Distribution payments. These payments bring the Phase 4 distribution total to approximately $11.5 billion of the total $17 billion allocated. With this announcement, nearly 78,000 providers received Phase 4 payments based on changes in revenue and expenses, with an increased focus on equity.

Phase 4 payments are based on providers’ lost revenues and expenditures between July 1, 2020 and March 31, 2021. Notably, Phase 4 applications added new elements specifically focused on equity. Of note, the elements focus on reimbursing a higher percentage of losses for smaller providers, and include “bonus” payments for providers who serve Medicaid, CHIP, and Medicare beneficiaries. HHS has processed approximately 86 percent of all Phase 4 applications, and remaining applications will continue to be processed through 2022.

HHS’s announcement also reminds providers that they may use PRF payments to support recruitment and retention efforts. Recruitment efforts include salaries for new or temporary staff, employee referrals, hiring bonuses, and other recruitment tools. Retention examples include incentive pay, retention bonuses, childcare assistance, and other fringe benefits. Importantly, eligible expenses must not be reimbursed by other sources or obligated to be reimbursed by other sources, and salaries must not be paid at a rate in excess of Executive Level II, which is currently set at $197,300.

The HHS press release regarding the Phase 4 PRF payments is available here. HHS’s guidance on recruitment and retention efforts is available here.