September 22, 2020

New Provider Relief Fund Reimbursement Limitations Published

By Frank Miceli, Partner, Assurance Services

New Provider Relief Fund Reimbursement Limitations Published Healthcare

On September 19, 2020, the U.S. Department of Health and Human Services (HHS) issued a Post-Payment Notice of Reporting Requirements (the Notice) relating to the General and Targeted Distributions made to Provider Relief Fund (PRF) recipients. The alert includes some new (and concerning) guidance for providers specifically relating to limitations and calculations of lost revenue along with other reporting guidance. Recipients receiving over $10,000 of PRF funds, in the aggregate, are expected to report in accordance with the guidelines.


The Notice specifies that PRF funds are to used first for healthcare related expenses attributable to the coronavirus that have not been reimbursed by another source and then for any remaining PRF payment to be applied to reimburse for lost revenues. The Notice also indicates that lost revenues are calculated by the negative change from 2019 to 2020 of net patient revenue less patient care related expenses. This seems to be contradictory to a previously issued FAQ dated June 19, 2020, which contained the following wording:

You may use any reasonable method of estimating the revenue during March and April 2020 compared to the same period had COVID-19 not appeared. For example, if you have a budget prepared without taking into account the impact of COVID-19, the estimated lost revenue could be the difference between your budgeted revenue and actual revenue. It would also be reasonable to compare the revenues to the same period last year.

In addition, the Notice included new limitations on the amounts of lost revenue that can be claimed. The limitations specify that lost revenues can be claimed only up to the amount of the provider’s 2019 net gain from healthcare related sources, or up to zero net gain in the situations where the 2019 operating income from patient care was negative. In other words, a provider’s lost revenue claim cannot be an amount that would increase a provider’s net healthcare operating income over their 2019 amount or if 2019’s healthcare operating income was a loss, you can only claim an amount that would make the operating income zero.

Providers that are claiming lost revenues will also find themselves reporting revenue detail by payor for 2019 and 2020, other pandemic assistance received in 2020 (including PPP loans, FEMA reimbursements, etc.), and non-financial data per quarter (including staffing and census).


The Notice puts providers in two buckets in terms of claiming coronavirus expenses. Those receiving PRF payments between $10,000 and $499,000 in the aggregate and those receiving over $500,000 in aggregated PRF payments.

Providers receiving between $10,000 and $499,000:

are required to report healthcare related expenses attributable to coronavirus, net of other reimbursed sources (e.g., payments received from insurance and/or patients, and amounts received from federal, state or local governments, etc.) in two aggregated categories: (1) G&A expenses and (2) other healthcare related expenses. These are the actual expenses incurred over and above what has been reimbursed by other sources.

Providers receiving over $500,000:

are required to report healthcare related expenses attributable to coronavirus, net of other reimbursed sources, and they must do so by reporting more detailed information within the two categories of G&A expenses and other healthcare related expenses.

The Notice goes on to further detail the sub categories within the G&A category (i.e. Mortgage/Rent, Insurance, Personnel, Fringe Benefits, Lease Payments, Utilities/Operations and Other) and the healthcare related expenses category (i.e. Supplies, Equipment, Information Technology, Facilities and Other).


The guidance also outlines the long awaiting timing limitations surrounding usage of PRF funds as follows:

If recipients do not expend PRF funds in full by the end of calendar year 2020, they will have an additional six months in which to use remaining amounts toward expenses attributable to coronavirus but not reimbursed by other sources, or to apply toward lost revenues in an amount not to exceed the 2019 net gain. For example, the reporting period January – June 2021 will be compared to the same period in 2019.


Although providers have gotten somewhat accustomed to new rules and guidance being issued almost weekly for the use of PRF payments, the above changes represent perhaps the most significant new rules and restrictions on the use of funds published to date. For assistance and guidance with your reporting, contact one of our Marcum healthcare team leaders.

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