PYA Covid-19 Information Hub
Published December 22, 2020

Top Five Provider Relief Fund Takeaways from the Coronavirus Response and Relief Supplemental Appropriations Act, 2021

Updated 12/28/20.


On Sunday, December 27th, the Coronavirus Response and Relief Supplemental Appropriations Act, 2021 was signed into law. Included in the Act are material changes to several programs and activities affecting those in healthcare including changes to aspects of the CARES Act Provider Relief Fund (PRF), the Payroll Protection Program (PPP), the 2021 Medicare Physician Fee Schedule, and out-of-network billing. This is the first in a series of articles that PYA will release breaking down the impact of the legislation on these key areas impacting our clients.

Recipients of CARES Act Provider Relief Fund (PRF) distributions should take note of provisions in the latest COVID-19 relief legislation impacting their use of those funds, including the following:

(1)        Lost revenue calculation. According to HHS’ November 2 Post-Payment Notice of Reporting Requirements, “lost revenue” for purposes of PRF distributions is the “negative change in year-over-year actual revenue from patient care related sources.” The COVID-19 relief legislation, however, now permits an entity to “calculate such lost revenues using the Frequently Asked Questions guidance released by [HHS] in June 2020, including the difference between such provider’s budgeted and actual revenue budget if such budget had been established and approved prior to March 27, 2020.”

The referenced FAQ is specific to estimating lost revenue in March and April 2020 to submit to the Provider Relief Fund Payment Portal in connection with Phase 1 General Distributions:

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.

We understand the legislative language to permit a recipient to use any reasonable method to calculate lost revenue in 2020 for reporting purposes, not just budget-to-actual or negative change in year-over-year actual revenue. To be reasonable, any methodology – at a minimum – must be internally consistent and accurately reflect the recipient’s financial circumstances.

Given HHS has been developing its reporting portal – which is due to open by January 15 for a February 15 reporting deadline – based on its previous interpretation of “lost revenue,” we suspect this legislative change will push back the previously-published reporting timetable.

(2)        $3 billion in additional funding. Despite early reports the package would include an additional $30 billion for the PRF, the final bill includes only 10% of that amount. Given that more than $25 billion of the original $175 billion appropriation has yet to be allocated by the Department of Health and Human Services (HHS), it’s not too surprising that Congress decided to spend the money elsewhere.

The COVID-19 relief legislation requires at least 85% of all future PRF allocations (including any re-allocation of funds recovered from health care providers) be “based on applications that consider financial losses and changes in operating expenses occurring in the third or fourth quarter of calendar year 2020, or the first quarter of calendar year 2021, that are attributable to coronavirus.”

(3)        Parental controls. In its Frequently Asked Questions, HHS has stated that while a parent organization may allocate general distributions among its subsidiaries, the full amount of any targeted distribution must remain with the recipient. Under the new law, however, a parent may “allocate (through transfers or otherwise) all or any portion of [any general or targeted distribution] among subsidiary eligible health care providers of the parent organization except responsibility for reporting the reallocated reimbursement shall remain with the original recipient….”

(4)        Healthcare-related expenses attributable to coronavirus. The COVID-19 relief legislation includes no provision further defining what constitutes an expense for which PRF distributions may be used. Thus, a recipient is left to build its case to justify a specific expense given the expansive language in the FAQs (including “acquiring additional resources, including facilities, equipment, supplies, health care practices, staffing, and technology to expand or preserve care delivery”) as COVID-19 related.

(5)        Reimbursed from other sources. Nor does the legislation address when lost revenue or expenses “have been reimbursed from other sources or that other sources are obligated to reimburse” and thus are not eligible for PRF reimbursement. Absent legislative direction, recipients will continue to grapple with the impact of third-party reimbursement for specific healthcare services on the use of PRF distributions.

As always, we’ll keep our eyes on the latest developments, including any new HHS guidance or changes to reporting requirements.

If you have questions about PRF payments and reporting or would like guidance for other COVID-19 matters, visit PYA’s COVID-19 hub, or contact a PYA executive below at (800) 270-9629.

Executive Contacts

Interested in Learning More?

Sign Up for Our Insights, Including COVID-19 Bulletins!



    Select Your Subscriptions