On October 22, 2020, HHS expanded the Provider Relief Fund Phase 3 General Distribution eligibility pool to include residential treatment facilities, chiropractors, and eye and vision providers that had not yet received any payments. The deadline to submit applications for the Phase 3 General Distribution is November 6, 2020. Additionally, on October 22, 2020, HHS published a policy memo and amended guidance for reporting on Provider Relief Fund distributions.

Expanded Eligibility

For the Phase 3 General Distribution, HHS expanded the types of eligible providers across a broad category of practices regardless of whether they accept Medicare or Medicaid. These newly eligible providers include:

• Behavioral Health Providers;
• Allopathic & Osteopathic Physicians;
• Dental Providers;
• Assisted Living Facilities;
• Chiropractors;
• Nursing Service and Related Providers;
• Hospice Providers;
• Respiratory, Developmental, Rehabilitative and Restorative Service Providers;
• Emergency Medical Service Providers;
• Hospital Units;
• Residential Treatment Facilities;
• Laboratories;
• Ambulatory Health Care Facilities;
• Eye and Vision Services Providers;
• Physician Assistants & Advanced Practice Nursing Providers;
• Nursing & Custodial Care Facilities; and
• Podiatric Medicine & Surgery Service Providers.

Eligible providers will receive a baseline payment of approximately 2% of annual revenue from patient care plus an add-on payment that considers changes in operating revenues and expenses from patient care, including expenses incurred related to coronavirus. The HHS announcement is available here, and application information is available here.

Amended Reporting Requirements

On October 22, 2020, HHS published a policy memo explaining that it was amending its reporting requirements. HHS’s initial instructions (published on September 19, 2020) limited the applicability of funds to an amount that would allow most providers to be no more profitable in 2020 than in 2019. The previous instructions read:

PRF payment amounts not fully expended on healthcare related expenses attributable to coronavirus are then applied to lost revenues, represented as a negative change in year-over-year net patient care operating income (i.e., patient care revenue less patient care related expenses for the Reporting Entity, defined below, that received funding), net of the healthcare related expenses attributable to coronavirus calculated under step 1. Recipients may apply PRF payments toward lost revenue, up to the amount of their 2019 net gain from healthcare related sources. Recipients that reported negative net operating income from patient care in 2019 may apply PRF amounts to lost revenues up to a net zero gain/loss in 2020.

The policy memo explained that HHS was reversing its position on how to calculate lost revenue. Instead of the net margin concept (described above), HHS was reverting back to a 2019 and 2020 revenue comparison. The amended reporting requirements state:

PRF payment amounts not fully expended on healthcare related expenses attributable to coronavirus are then applied to patient care lost revenues, net of the healthcare related expenses attributable to coronavirus calculated under step 1. Recipients may apply PRF payments toward lost revenue, up to the amount of the difference between their 2019 and 2020 actual patient care revenue.

In sum, after reimbursing healthcare related expenses attributable to coronavirus that were unreimbursed by other sources, providers may use remaining Provider Relief Funds to cover any lost revenue, measured as a negative change in year-over-year actual revenue from patient care related sources.

The amended reporting requirements are available here, and the policy memo is available here.