Lessons Learned and Looking Forward

The Provider Relief Fund (“PRF”) was created to assist healthcare providers during the COVID-19 pandemic. Through the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act, the Department of Health and Human Services (“HHS”) distributed funds to qualified providers for healthcare related expenses and lost revenues due to COVID-19 and to reimburse for testing and treating uninsured individuals with COVID-19. Over $134 billion in funds have been distributed through various phases of general, targeted and American Rescue Plan (“ARP”) rural distributions. 

Reporting Requirements

On October 27, 2022, HRSA issued an updated Post-Payment Notice of Reporting Requirements.

Below is a summary of the payment received period and the period of availability for the use of the funds.

PeriodPayment Received PeriodPeriod of Availability
1April 10, 2020, to June 30, 2020January 1, 2020, to June 30, 2021
2July 1, 2020, to December 31, 2020January 1, 2020, to December 31, 2021
3January 1, 2021, to June 30, 2021January 1, 2020, to June 30, 2022
4July 1, 2021, to December 31, 2021January 1, 2020, to December 31, 2022
5January 1, 2022, to June 30, 2022January 1, 2020, to June 30, 2023
6July 1, 2022, to December 31, 2022January 1, 2020, to December 31, 2023
7January 1, 2023, to June 30, 2023January 1, 2020, to June 30, 2024

Most providers have been through at least one reporting period. Below is a summary of the reporting time periods.

PeriodPayment Received Period
(Payments Exceeding $10,000 in Aggregate Received)		Reporting Time Period
1April 10, 2020, to June 30, 2020July 1, 2021, to September 30, 2021
2July 1, 2020, to December 31, 2020January 1, 2022, to March 31, 2022
3January 1, 2021, to June 30, 2021July 1, 2022, to September 30, 2022
4July 1, 2021, to December 31, 2021January 1, 2023, to March 31, 2023
5January 1, 2022, to June 30, 2022July 1, 2023, to September 30, 2023
6July 1, 2022, to December 31, 2022January 1, 2024, to March 31, 2024
7January 1, 2023, to June 30, 2023July 1, 2024, to September 30, 2024

In the October Post-Payment Notice of Reporting Requirements, HHS also provided guidance to providers on the reporting of the ARP rural distributions in the HRSA PRF portal, as these are new for Period 4. Per the guidance, the tax identification number (“TIN”) that qualified for and received the ARP rural distribution payment must use the payment for allowable expenses and/or lost revenues. HRSA does not permit parent entities to use these payments. Parent entities will be required to attest that payments were allocated in accordance with the information provided in the payment letter received in conjunction with the ARP rural distribution.

Period 4 HRSA PRF reporting opens on January 1, 2023. Below are some lessons learned from previous reporting periods that providers should be aware of as they begin to report Period 4:

  1. Start early – Reporting for Period 4 is through March 31, 2023, but don’t wait until the last minute to start. If there are issues with the portal or you have questions, there can be long wait times or delays when contacting HRSA.
  2. Alternative Reasonable Methodology – In previous periods, many providers were hesitant to use the alternative reasonable methodology to report lost revenues for fear of greater scrutiny by HRSA. This methodology has proven to provide the most flexibility to providers to capture changes in operations or other factors. The lost revenue methodology can be changed from the previous reporting period. The key when using the Alternative Reasonable Methodology is ensuring the narrative submitted agrees to the calculation submitted and that the narrative explains why the methodology is reasonable for the circumstances and how the lost revenues were attributable to COVID (as opposed to a loss caused by another source).
  3. Consistency between reporting periods – While you can change your lost revenue methodology, if you do, you are required to go back to the beginning of the period of availability and calculate lost revenues under the new methodology. Ensuring your revenue, expense and metric information is consistently reported each period is important.
  4. Documentation is key – Ensure all records are kept that support what was reported in the HRSA PRF portal. Audits occur well after the reporting was performed so make sure you maintain your records with this information. Many organizations have experienced turnover in the position responsible for reporting, so ensure the information is saved and accessible by others in the organization. Documentation must be retained for a period of three years after the date of submission of the final expenditure report.
  5. Review your submission – Have someone outside of the person doing the submission review the information for accuracy and consistency.

Audit Requirements

Providers who received over $750,000 PRF are also subject to a compliance audit. Commercial organizations have two options in fulfilling the audit requirement: 1) an audit in conformance with the requirements of 45 CFR 75 Subpart F (single audit), or 2) a financial audit of the award or awards in accordance with Government Auditing Standards.

Amounts reported on the schedule in the PRF audit (regardless of the option chosen as described above) will align with the PRF period of availability and what is reported in the PRF Reporting Portal. For calendar year-ends, total expenditures and lost revenues from both Period 1 and Period 2 report submissions to the Health Resources and Services Administration (“HRSA”) PRF reporting portal would have been included on the 12/31/21 schedule in the PRF audit. This would include PRF funding received from April 10, 2020, to December 31, 2020. Audits for calendar year-ends of December 31, 2022 will include Period 3 and Period 4 payments.

In addition to PRF amounts, the schedule should also include any other HHS awards received during 2021 including 93.461, COVID 19 Claims Reimbursement for the Uninsured Program and the COVID-19 Coverage Assistance Funds (Assistance Listing 93.461), COVID-19 Testing and Mitigation for Rural Health Clinics (assistance listing 93.697), and other HHS awards such as NIH Research and Development grants.

The compliance audits are due the earlier of 30 days after the receipt of the audit or nine months after fiscal year end.

The Office of Management and Budget (“OMB”) granted a six-month extension for recipients in Puerto Rico, Alaska, Florida, South Carolina, and North Carolina with Single Audits due between September 18 and December 31, 2022.

Many organizations have been through their first compliance audit for the HHS awards. Below are some common compliance audit issues identified in these audits:

  1. Missing or incorrect information – Auditors are required to agree certain line items of the HRSA PRF portal submission to the underlying detail. In certain instances, providers were unable to provide supporting detail, or the supporting detail provided did not agree to what was reported in the submission.
  2. Expense reporting – Expenses reported in the HRSA PRF portal submission as “Other PRF Expenses” should only include the PRF expenses for that reporting period. These should not be cumulative.
  3. Alternative Reasonable Methodology narrative – The narrative included for the lost revenue calculation did not support the calculation or did not include an explanation of why the methodology was reasonable for the circumstances and how the lost revenues were attributable to COVID.

As providers prepare for the next round of compliance audits, below is information to keep in mind:

  1. Ensure all HHS award information is readily available and supports amounts reported in the HRSA PRF portal.
  2. Ensure policies and procedures surrounding the funding are documented and accurately depict the use of the funds and the controls in place over the funds.
  3. Review the related compliance requirements. The OMB releases a compliance supplement which details the compliance requirements for the funds. Providers should review these to gain a better understanding of the testing to be performed as part of the compliance audit.

Other Resources

HHS continues to release updated frequently asked questions to assist providers in reporting and understanding the audit requirements for the awards. Providers are urged to continue to monitor the HHS website for updates.

LBMC has a dedicated PRF team available to assist organizations with reporting and compliance audits. If you have questions, please reach out to our team.

Content provided by LBMC’s Courtney Bach and Laura McGregor.