Phase 3 of Provider Relief Funding

Announced on October 1, 2020, the Department of Health and Human Services (HHS) through the Health Resources and Services Administration (HRSA) is dedicating an additional $20 billion in new funding as part of Phase 3 of the General Distribution allocation. Between October 5, 2020 and November 6, 2020, providers who both have and have not received distributions from HHS will have the ability to apply for additional funding.

As the pandemic continues, HHS recognizes the challenges and the need to deliver quality care. According to the CDC, the symptoms of anxiety, depression and other behavioral health issues have increased from the stay at home orders and feelings of isolation. They have expanded the eligibility to apply for HHS funding to such providers as addiction counseling centers, mental health counselors, and psychiatrists.

Who is Eligible?

• Providers who previously have not received funding up to 2% of their annual revenue through previous general distribution payments. For providers who have received funding up to 2% of their annual revenue, they may submit additional documentation to demonstrate financial loses and change in operating expenses.
• Behavioral Health providers, including those that previously received funding and new providers.
• Healthcare providers that began practicing January 1, 2020 through March 31, 2020. This includes Medicare, Medicaid, CHIP, dentists, assisted living facilities and behavioral health providers.

How will the money be distributed?

If a provider was eligible for payment equal to approximately 2% of patient care revenue from prior distributions, HHS will distribute payments up to the 2% threshold. Once those payments are made, HHS will distribute the remaining balance of $20 billion through “an equitable add-on payment”. The payment will be determined using the following factors:

• A provider’s change in operating revenues from patient care. Please note this is yet to be defined.
• A provider’s change in operating expenses from patient care, including expenses incurred related to coronavirus. This also has yet to be defined.
• Payments already received through prior Provider Relief Fund distributions. This would include Payroll Protection funds, Prior HHS Funds as well as state funds received through the Care Act and distributed through various state grant processes.

In summary, APPLY EARLY. HHS is encouraging providers to apply early so they can perform the calculations as quickly as possible and get the money out into the hands of the healthcare providers. Exact details have not been provided as to what information will need to be submitted in this application process. Marcum will continue to provide additional information as it is released.