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The Government Still CARES: Reporting AND Auditing Provider Relief Funding

No federal government “gift” comes without strings, and this is particularly true of the CARES Act Provider Relief Fund payments. Along with confusion related to which entities may retain and use the “surprise” April 10th funds, HHS guidance on the process and the information required for Reporting has been inconsistent. One additional requirement, Single Audit reporting, appears to have received little attention, but is also an additional condition for retention of Provider Relief Funds. 

Healthcare providers who received and retained CARES Act Provider Relief Fund payments of more than $10,000 – from the first unannounced “surprise” payment on April 10, 2020 through the continued opportunities to apply for relief – are required to report on the uses of such funds through the Provider Relief Fund Reporting Portal. Most providers are well aware of this reporting obligation which is divided into time periods based on the dates funds were received. Reporting Period 1 began last fall and has closed. Reporting Period 2 ended on March 31, 2022, and Period 3 reporting will begin on July 1, 2022. Failure to submit Reporting is considered non-compliance with the Terms and Conditions of the payments, and will result in an HHS notification of “non-compliant status with instructions on how to remediate their status (if applicable)” and/or notice to return the funds subject to the Reporting Period if not remediated.  If extenuating circumstances contributed to a reporting error or failure to report, the Health Resources and Services Administration (HRSA) should be notified promptly that the provider intends to remediate the Reporting deficiency, if possible. 

In January 2022, HHS updated its FAQs regarding Lost Revenue calculations for Reporting and Guidance on Reporting Period 2 to provide some flexibility in the methods for calculating and reporting Lost Revenues. However, HHS FAQs notify providers of the risk of changing reporting options that may result in overlapping periods of availability and duplicative reports and result in recalculation of “revenues for the entire period of availability, which may impact the previously reported unreimbursed lost revenues.”

While the Reporting requirement has received considerable attention, the Single Audit requirement for providers expending more than $750,000 of Provider Relief Funds has flown under the radar for many despite being an additional requirement under the Terms and Conditions. HRSA’s Audit Fact Sheet states that investor-owned healthcare providers (“commercial organizations”) have two options for the audit: “1) a financial related audit of the award or awards conducted in accordance with Generally Accepted Government Auditing Standards; or 2) an audit in conformance with the requirements of 45 CFR § 75.514 - Single Audit.”  The Provider Relief Fund audit deadlines were pushed to the 2021 Fiscal Year to align with the Reporting Periods, and through an extension granted by Executive Order, the current deadline is September 30, 2022.  Providers are cautioned to maintain documentation to demonstrate to HHS reasons why additional time might be needed through the extension and for purposes of responding to a further HHS initiated audit.  Single Audits by investor-owned  (“commercial organizations”) may be submitted to HRSA via email to HRSA’s Division of Financial Integrity at PRFaudits@hrsa.gov. Non-federal entities, such as non-profit facilities or organizations, should submit electronically to the Federal Audit Clearinghouse.

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Beth Pitman
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