March 1, 2021

HHS Still has Provided No Information on When Reporting will Begin

By Mary Antonetti, Partner, Tax & Business Services

HHS Still has Provided No Information on When Reporting will Begin Healthcare

The portal to report on the HHS Provider Relief Funds (PRF) was expected to open on January 15, 2021. While the portal did open, it was for registrations only. We have all been eagerly awaiting additional guidance from HHS. Late last week on February 24, 2021, HHS updated its Frequently Asked Questions (FAQs) to provide some additional guidance for reporting of Rural Health Clinic (RHC) COVID-19 Testing Programs payments and Use of Funds as summarized below. Several things are noticeably absent from the recent changes to the FAQs such as information about when the portal will open for reporting and additional guidance on the calculation of allowable expenses but the IRS did provide some guidance on the allocation of staff and director-level resources.

Rural Health Clinic(RHC) COVID-19 Testing Program

RHC’s issued payments on or around May 20, 2020; June 9, 2020; December 7, 2020; and or January 20, 2021 which were described as “HHSPAYMENT” or “COVID*RuralHealthTestingPmt*HHS.GOV” were paid as part of the RHC COVID-19 Testing Program. A separate reporting for these payments is required at

Hospitals receiving disproportionate share hospital (DSH) payments and PRF General and Targeted Distributions

PRF funds cannot be used to reimburse expense or losses that have been reimbursed or are obligated to be reimbursed by other sources. If a hospital is receiving Medicaid DSH payments, the expenses related to the uncompensated costs of furnishing inpatient/outpatient hospital services for Medicaid beneficiaries or other individuals with no insurance coverage for the services, would be considered reimbursed by the Medicaid program and not eligible for reimbursement through PRF funds.

Time spent by staff and director-level resources

Many have wondered whether any organization could allocate time spent on COVID-19 specific matters such as participating in task forces or preparing their health care organizations would be an allowable expense? According to the recently issued FAQs, time spent would be an allowable cost so long as it is not reimbursed by other sources. They also clarified that no one individual could be allocated as greater than one FTE across funding sources. All costs must be “tangible expenses (not opportunity costs) and must be supported by documentation”.

Cost-based reimbursement

Providers should follow CMS instructions for completing cost reports. If the provider received full reimbursement of its costs, there would be no additional costs to report as eligible expenses for PRF. However, in certain cases a ceiling is applied to cost reimbursement and the amount reimbursed by Medicare or Medicaid does not fully cover the actual costs. In these circumstances, the incremental costs would be eligible for reimbursement under the PRF. This may happen due to the unanticipated increased costs of providing care attributable to COVID-19.

Marcum’s healthcare team will continue to keep you informed as new guidance is issued.

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