Healthcare Providers Can Soon Apply for Part of $17B Provider Relief Fund

The Health Resources and Services Administration (HRSA) announced that beginning September 29, health care providers can apply for Phase 4 of the Provider Relief Fund (PRF).

Phase 4 consists of $17 billion based on providers’ lost revenues and changes in operating expenses from July 1, 2020 to March 31, 2021. 75% percent of the Phase 4 allocation will go towards lost revenues and COVID-19 related expenses. Small providers, who tend to operate on thin margins and often serve vulnerable or isolated communities, and medium providers will receive a base payment plus a supplement at a higher reimbursement rate as compared to large providers. Large providers will receive a minimum payment amount that is based on a percentage of their lost revenues and COVID-19 related expenses.

HRSA has not defined small, medium, or large providers, but has provided that Phase 4 allocations will be determined after all data from applications are received. The remaining 25 percent of the Phase 4 allocation will go towards bonus payments, based on the amount and type of services provided to Medicaid, CHIP, and Medicare patients. Bonus payments will be priced at a higher Medicare rate to ensure equity for those serving low-income children, pregnant women, people with disabilities, and seniors.

Additionally, providers who serve Medicaid, CHIP and Medicare patients who live in rural communities are eligible for the $8.5 billion in funding allocated for ARP rural payments. Providers who serve any patients living in the 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. The Rural Health Grants Eligibility Analyzer defines what areas qualify as “rural” for the ARP rural payments.

Providers will apply for both Phase 4 and ARP rural payments in one application. The application has not been released yet and the PRF Reporting Portal has not been updated to include Phase 4. To prepare for the upcoming application, HRSA recommends gathering documentation, like recent tax documents and financial statements, for the second half of calendar year 2020 and the first quarter of 2021.

PRF recipients will be required to notify the U.S. Department of Health and Human Services (HHS) Secretary of any merger with or acquisition of another health care provider during their Payment Received Period. HRSA has released information on how Phase 3 payments were calculated. HRSA will allow companies that were denied Phase 3 payments to request reconsideration and companies that failed to comply with the September 30, 2021 Reporting Period 1 deadline a 60-day grace period beginning October 1, 2021 and ending November 30, 2021.

Waller will continue to monitor and provide information on any future developments in the PRF.