September 15, 2021

HHS Announces Release of an Additional $25.5 Billion of COVID-19 Provider Funding – Phase 4

By Eric Sierant, Senior, Advisory Services

HHS Announces Release of an Additional $25.5 Billion of COVID-19 Provider Funding – Phase 4 Healthcare

The Biden administration announced that $25.5 billion in new funding will be made available to health care providers that have been affected by the COVID-19 pandemic. Providers can begin applying for the relief funds on September 29 using the application portal.

The initial $17 billion of the Phase 4 payment distribution will be based on lost revenues and expenditures between July 1, 2020 and March 31, 2021. The remaining $8.5 billion of funds will be distributed to providers who serve rural Medicaid, CHIP and Medicare beneficiaries. In order to expedite the application process, providers will apply for both the $17 million and $8.5 million funding in a single application.

The $17 billion Phase 4 distribution will reimburse smaller providers at a higher rate than larger providers to promote equity and assist providers with the most need. Bonus payments will also be made to providers serving Medicaid, CHIP and/or Medicare patients, who tend to be lower income and have greater and more complex medical needs. Specifically, 75% of the $17 billion distribution will be calculated based on revenue loss & COVID related expenses and the remaining 25% will be put towards the bonus payments.

The $8.5 billion in American Rescue Plan funding will price payments at the generally higher Medicare rates for Medicaid/CHIP patients to promote equity.

Furthermore, HHS will be releasing detailed information on the methodology used to calculate Phase 3 payments. This will be done to promote transparency in the provider relief fund program. Any providers that feel their Phase 3 payments were not calculated correctly are now able to request a reconsideration.

Lastly, there will be a 60-day grace period for the September 30, 2021 HHS reporting deadline to give providers additional time reporting lost revenues and COVID expenses. This extension comes in light of the recent natural disasters and the Delta variant sweeping across the country.

Click here to read the full HHS news release.