fbpx

< Back to Thought Leadership

Healthcare Related Expenses: PRF Week 3 Update

Provider Relief Fund (PRF) Update

In this weeks Provider Relief Fund payments update, we are focusing on what constitutes as healthcare related expenses attributable to coronavirus.

WEEKLY INSIGHTS

The expenses need to meet two broad primary characteristics:

  1. Must relate to costs to prevent, prepare for, or respond to coronavirus.
  2. Specifically from recent FAQs, the costs should be “unreimbursed from other sources”.

KEY TAKEAWAY: Costs need to be related to preventing/preparing for/responding to the coronavirus.

A few things to keep in mind when gathering the data:

  • Nearly every provider has encountered a staffing crisis due to the pandemic. Focus first on accumulating labor costs to prepare for and treat COVID patients.
  • Engage senior leadership and department heads to review CY 2020 operations and expenditures with a focus on identifying costs that were used to prepare for and treat COVID patients.
  • Eligible costs for salaries are capped at 197,300 annually per individual, regardless of position type.
  • The full costs of capital items may be claimed towards the grant. Earlier guidance suggested that only 1 or 1.5 years of deprecation would be allowed, but HHS has backtracked and is now allowing the full costs of capital items to be claimed as eligible expenses.

To assist in the gathering of this data, the linked worksheet can be utilized to help gather the cost information.

KEY TAKEAWAY: Grant eligible costs include additional salaries/sign on bonus’/overtime/contracted staffing, full cost of capital items to be claimed.

“What can we spent money on that we haven’t otherwise?”

  • Hazard pay is specifically mentioned in the guidance as an acceptable expense, so consideration of a bonus to retain/recruit new staff would be acceptable.
  • Capital items as long as they are used to prevent, prepare for, or respond to coronavirus. If the equipment/property could be repurposed that would also be a good thing to consider.
  • Take into account vaccine administration and distribution and what costs will be incurred to dispense to patients including staffing, freezers and refrigeration, and management of the entire process.

KEY TAKEAWAY: Think about what costs you have incurred due to COVID-19 and determine other ways capital items can be used post-COVID-19.

The Office of Management and Budget (OMB)

  1. Expected to release a compliance supplement giving auditors guidance on how to audit funds to verify if they are in compliance.
  2. HHS has communicated that the portal to report on eligible expenses, other reimbursed sources, and lost revenue calculations will open on January 15, 2021, with a 30 day window for providing information.

In addition, OMB and the AICPA communicated on 12/10/20 that anyone who received provider relief funds with a fiscal year end before 12/31/20 will not be required from reporting the expenditures on the schedule of federal awards until the following fiscal year. This could absolve the majority of providers from having to perform a single audit with fiscal year ends prior to 12/31/20.

KEY TAKEAWAY: We encourage clients to start gathering this information now, as there could be a significant time commitment to gather all of the data.

For a downloadable version of this post on healthcare related expenses click here. For the downloadable FAQ resource, click here.

 

single audit threshold

The Evolution and Impact of the Single Audit Threshold in 2024

By Claudia Valarezo Guerrero, MAccy, Senior Accountant at Blue & Co. As organizations navigate evolving financial regulations, staying informed about changes is crucial for compliance and operational efficiency. A Single […]

Learn More

IRS 501(r) Compliance: Financial Assistance Policy and Amounts Generally Billed Calculation

Non-profit hospital organizations as defined by Section 501(c)(3) must meet requirements imposed by Section 501(r) on a facility-by-facility basis to be treated as a tax-exempt organization. According to the Internal Revenue […]

Learn More

Hospital Price Transparency: What’s New in 2024 and Beyond

The Centers for Medicare & Medicaid Services (CMS) has introduced significant changes to the requirements for hospital price transparency. The aim is to enhance pricing transparency and ensure compliance with […]

Learn More