Skip to Content

Analysis of Provider Relief Funding Reporting and Retention Requirements


The Department of Health and Human Services (HHS) updated reporting requirements for Provider Relief Fund (PRF) recipients on November 2, 2020 (the Guidance). The Guidance supplements, and in some cases replaces, HHS’ July 20, 2020 post-payment notice of reporting requirements. The Guidance is available here. HHS has also released audit information, and stresses that any provider that received PRF funds is subject to an audit.

The Guidance provides updated PRF reporting requirements by entities as well as updated statements on auditing for such reporting and of entities’ use of PRF funds. The Guidance is more limiting than some providers may have anticipated based on prior HHS guidance. It may force providers to return some of their Provider Relief funding. For example, HCA announced on October 7 that it would return approximately $1.4 billion in provider relief funding. Although HCA did not provide a reason for this, stringent requirements under the new Guidance could be to blame. Tenet Corporation announced a return of $70MM in its third quarter based on new guidance the Government had provided.

Below, we present the basic reporting requirements, audit information, and additional details related to calculations behind the reporting requirements.

Basic Reporting and Basic Auditing Requirements

Basic Reporting Requirements

Entities must report the following categories of information:

  • Healthcare-related expenses attributed to the coronavirus that are not reimbursed and not obligated to be reimbursed by a third-party.
  • If the entity has not fully expended PRF payments on healthcare related expenses that are attributed to the coronavirus, then the remaining PRF amounts may be applied to lost revenues. The updated Guidance defines “lost revenues” as a negative change in year-over-year actual revenue. Entities may apply PRF payments towards lost revenue up to the amount of the difference between their 2019 and 2020 actual patient care revenue.
  • If the entity does not spend its PRF funds in full by the end of 2020, it will have an additional six (6) months in which to use the remaining amount toward expenses attributed to the coronavirus, but not reimbursed by other sources, or to apply toward lost revenues in an amount not to exceed the difference between 2019 and 2021 actual revenue. For example, when considering 2019 actual revenue, the reporting period January through June 2021 should be analyzed against the same reporting period in 2019.
  • If an entity does not use its PRF funds within the timeframe described above, funds should be returned.

Basic Audit Information

HHS reminds providers that any provider that received PRF funds is subject to an audit. HHS will:

  • Use a “data driven” approach to determine which providers to audit.
  • Look for “anomalies” within similar groups of providers.
  • Look for outliers within provider types.
  • Compare expense or revenue loss correlation to self-reported COVID-19 cases for high impact distributions.
  • Examine providers by region for outliers.
  • Calculate “risk scores” for providers based on the funding received and revenue loss.

Audits may be performed by the Office of Inspector General (OIG) as well as other agencies within HHS. The OIG has already added PRF auditing to its work plan, indicating this is a strong focus. In addition, some providers may be subject to the governments “single audit” standards.

Closer Look—Calculations for Reporting

Calculation of Expenses Attributed to Coronavirus

The guidance sets forth in greater detail which expenses are attributed to the coronavirus that are not reimbursed by other sources. These are broken into two categories. The first is “general and administrative expenses attributed to coronavirus” and the second is “healthcare related expenses attributed to the coronavirus”. The examples provided by CMS include:

General and Administrative Expenses Attributed to the Coronavirus:

  • Mortgage/Rent: Monthly payments related to mortgage or rent for a facility.
  • Insurance: Premiums paid for property, malpractice, business insurance, or other insurance relevant to operations.
  • Personnel: Workforce-related actual expenses paid to prevent, prepare for, or respond to the coronavirus during the reporting period, such as workforce training, staffing, temporary employee or contractor payroll, overhead employees, or security personnel.
  • Fringe Benefits: Extra benefits supplementing an employee’s salary, which may include hazard pay, travel reimbursement, or employee health insurance
  • Lease Payments: new equipment or software lease.
  • Utilities/Operations: Lighting, cooling/ventilation, cleaning, or additional third party vendor services not included in “Personnel”.
  • Other General and Administrative Expenses: Costs not captured above that are generally considered part of overhead structure.

Healthcare Related Expenses Attributed to the Coronavirus:

  • Supplies: supplies to prevent, prepare for or respond to the coronavirus including personal protective equipment, hand sanitizer or supplies for patient screening;
  • Equipment: expenses paid to purchase equipment used to prevent, prepare for or respond to the coronavirus such as ventilators, updates to HVAC systems and the like;
  • IT: information technology for IT or interoperability systems to expand and/or preserve healthcare delivery during the reporting period such as electronic health record licensing fees, telehealth infrastructure, and teleworking expenses;
  • Facilities: facility related costs to prevent, prepare for or respond to the coronavirus such as lease or purchase of permanent or temporary structures, or to modify facilities to accommodate patient treatment practices revised due to coronavirus;
  • Other: other healthcare related expenses paid to prevent, prepare for or respond to the coronavirus.

This list is non-exhaustive, and the Guidance notes that expenses attributed to the coronavirus may be incurred in both direct patient care overhead activities related to treatment of confirmed or suspected cases of the coronavirus, preparing for possible or actual coronavirus cases, and maintaining healthcare delivery capacity, which includes operating and maintaining facilities. Other interesting questions have not be answered, such as whether increases in insurance premiums would qualify.

Calculation of Lost Revenue Attributed to the Coronavirus

The Guidance then sets forth how to calculate lost revenue attributed to the coronavirus, defined as a negative change in year over year actual revenue from patient care related sources. Once revenue information is provided, cost expense impacts are calculated based on a calendar year comparison of 2019 to 2020 healthcare expenses to determine net operating income.

To calculate lost revenue, the Guidance instructs that revenue divided by net charges from patient care (prior to netting with expenses) will be compared to calendar years 2019 and 2020. Calendar year actual revenues should be entered by quarter. Reporting entities with unused funds after December 31, 2020 must submit a second final report no later than July 31, 2021 that includes patient care-related revenue amounts earned January 1 to June 30, 2021.

To determine revenue by payor combine the Guidance provides, for Medicare Parts A, B, and C, Medicaid, and commercial charges, to tally actual revenues and divide by net charges received from the payor for patient care for the calendar year.

In contrast, with respect to self-pay patients, the Guidance mandates a calculation of actual revenues divided by net charges received from self-pay patients, including the uninsured or individuals without insurance who bear the burden of paying for healthcare themselves for the calendar year.

The Guidance also defines “other assistance received” in 2020, which must be calculated as part of revenue received. “Other assistance” includes:

  • Treasury, Small Business Administration (SBA) and the CARES Act/Paycheck Protection Program (PPP): Total amount of coronavirus-related relief received from Treasury, SBA, and CARES Act/PPP by the Reporting Entity as of the reporting period end date.
  •  FEMA CARES Act: Total amount of coronavirus-related relief received from FEMA by the Reporting Entity as of the reporting period end date.
  • CARES Act Testing: Total amount of relief received from HHS for coronavirus testing-related activities.
  • Local, State, and Tribal Government Assistance: Total amount of coronavirus-related relief received from other Local, State, or Tribal government sources by the recipient and its included subsidiaries as of the reporting period end date.
  • Business Insurance: Paid claims against insurance policies intended to cover losses related to various types of healthcare business interruption as of the reporting period end date.
  • Other Assistance: Total amount of other federal and/or coronavirus-related assistance received by the recipient and the other TINs included in its report as of the reporting period end date.

Reports must be made with a quarterly breakdown of the above categories on a calendar year basis (in contrast to the various fiscal years used by many hospitals not based on a calendar year).

Other Data Elements

In addition to the foregoing data, hospitals will be required to report the following data elements:

Demographic Information

  • Reporting Entity: Entity (at the Tax Identification Number (TIN) level) that received one or more PRF payments or an entity that meets the following three criteria: 1) is the parent of one or more subsidiary billing TINs that received general distribution payments, 2) has providers associated with it that were providing diagnoses, testing, or care for individuals with possible or actual cases of COVID-19 on or after January 31, 2020, and 3) is an entity that can otherwise attest to the Terms and Conditions. If the entity has subsidiary TINs that received general distribution payments, regardless of whether the subsidiary or reporting entity formally attested to accepting the payment within the provider portal, the reporting entity may report on and direct the use of general distribution payments. However, if a subsidiary TIN received a targeted distribution payment, the subsidiary TIN must report use of funds for that payment, and the parent organization that reports on a subsidiary’s general distribution payment cannot also report on (or transfer) the subsidiary’s targeted distribution payment.
  • Tax Identification Number (TIN): Reporting Entity's primary TIN associated with the provider who received the funds and accepted the PRF payment during attestation (the recipient). For some recipients, this may be analogous to Social Security number (SSN) or Employer Identification Number (EIN).
  • National Provider Identifier (NPI) [optional]: The unique 10-digit numeric identifier for covered healthcare providers.
  • Fiscal Year-End Date: Month in which the recipient reports its fiscal year-end financial results.
  • Federal Tax Classification: Designated business type associated with the Reporting Entity’s primary TIN used for filing taxes. Classifications include Sole Proprietor, Limited Liability Corporation (LLC), Partnership, C Corporation, S Corporation, Trust or Estate, or a tax-exempt organization or entity.

Facility, Staffing and Patient Care

  • Personnel Metrics: Total personnel by labor category (full-time, part-time, contract, other: recipient must define), total re-hires, total new hires, total personnel separations by labor category.
  • Patient Metrics: Total number of patient visits (in-person or telehealth), total number of patients admitted, total number of resident patients.
  • Facility Metrics: Total available staffed beds for medical/surgical, critical care, and other beds.

Change in Ownership: Reporting Entities that acquired or divested of related subsidiaries indicate the change in ownership, whether the related TIN was acquired or divested, providing the following data points for each relevant TIN:

  • Date of acquisition/divestiture
  • TIN(s) included in the acquisition/divestiture
  • Percent of ownership for acquisition/divestiture
  • Did/do you hold a controlling interest in this entity? (Y/N)

Providers are aware that Cares Act funding has been a fast-moving topic, with regulations that are updated and changed constantly. As a result, the most important action providers can take is to act in good faith with respect to the current regulations and to document the rationale behind any decisions that providers make with respect to such regulations. With appropriate documentation and good faith compliance, providers will avoid enforcement actions under any fraud and abuse statutes. Additionally, we expect that retention of such funds by health systems that are not capable of meeting the reporting requirements will be a focus of scrutiny by government enforcement officials. Given the magnitude of some of these payments, this is an incredibly rich area of recovery focus for HHS. With the new administration taking office in January 2021, it is possible that the guidance from HHS may again change, and become more elastic, or perhaps more narrow.

If you have any questions about this legal update, please contact a member of the MMM healthcare group.