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Net of Reimbursed Sources: PRF Week 2 Update

Provider Relief Fund (PRF) Update

This week we investigate a critical phrase used by HHS repeatedly in the 11/2/20 Post Payment Notice and FAQs. In addition, we will review what the definitions of “net of reimbursed sources” and how this functions in determining what amount of Provider Relief Fund payments your organization will be able to keep after reporting.

Based on our review of the FAQs we believe “other reimbursed sources” can be broken down into two broad categories:

  1. Patient payments received from treating COVID patients
  2. Federal, State and local assistance funded primarily, but not exclusively, by the CARES Act and other legislation.

Friday, December 4th, HHS released new FAQ’s and updates to previous FAQs. The majority of these updates offer clarification on past FAQs and on past Phase 2 and Phase 3 distributions. However, there were 2 important updates.

  1. The first, HHS indicated recipients can contact the Office of Management and Budget (OMB) to request an extension of 2019 audit year reports due to the public health emergency and guidance issued on June 18, 2020.
  2. Second, in the final FAQ HHS clarified that incentive payments made under either pool of the Nursing Home Infection Control Distribution have the same required use of funds and that the recently released quality incentive payments must be attributable to the same types of expense.
WEEKLY INSIGHTS

Reimbursed Sources (patient payments) received from treating COVID patients

After accumulating COVID expenses, PRF recipients will be required to reduce those expenses by reimbursement from other sources and the FAQs reference payments made to COVID patients. There is not a lot of guidance but one FAQ in particular addresses this with 2 very simplistic examples of an office visit and PPE purchases, found in the PDF resource linked below. While these take different viewpoints in handling reimbursement, they agree in that HHS expects payments received to treat COVID patients should be used to reduce COVID expenses.

In another FAQ we’ve included, HHS singles out Critical Access Hospitals (CAHs) and say that any cost-based reimbursement already received for COVID expenses needs to be used to reduce overall COVID expenses. While the technical details have not yet been released for capturing the assistance from Medicare for CAHs, this FAQ and others indicate any revenue received from COVID patients needs to be accumulated and will be used to reduce initial COVID expenses.

Federal, State, and Local Assistance

Regarding non-patient payments from Federal, State and local assistance, PRF recipients need to go back to March 2020 and begin to accumulate any funding received as this will also be used to reduce your COVID expenses. While the majority of these payments came from legislation in the CARES Act, there may be other awards made to PRF recipients outside of the legislation.

Here’s our growing list of payments you may have received and need to report on:

  • SBA and Treasury’s Paycheck Protection Program (PPP) payments
  • FEMA
  • Interest earned on holding PRF payments
  • State Hospital Associations passthrough grants from CARES act
  • State and Local payments received through CARES act grants specific to COVID treatment
  • HRSA rural health and telecommunications grants

While this list is not exhaustive, we strongly encourage you to do a retroactive review of non-patient payments received during 2020 to determine if they should be treated as an “other reimbursed source” for treating, planning and preparing for COVID patients. States, counties, cities and local health departments received CARES act funds and may have transferred those funds to your organization. Essentially, HHS has is saying that they will be the payer of last resort for unreimbursed COVID expense.

Finally, we do want to point out that the HHS/HRSA-administered Testing, Treatment, and Vaccine Administration for the Uninsured payment program is referenced to be reported as Federal assistance from HHS FAQs. It’s likely your organization would have this reported in patient revenue and have a specific payer set up so please ensure you don’t report the revenue from this program twice when compiling other reimbursed sources.

For a downloadable version of this post on net of reimbursed sources, click here.

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