By Stephen Skok, CPA, MST – Shareholder

In April 2020, The Department of Health and Human Services (HHS) began distributing nearly $26 billion of its Coronavirus Aid, Relief and Economic Security (CARES) Act Provider Relief Fund (PRF) to health care facilities and providers receiving Medicaid reimbursements to help with the impact of the COVID-19 pandemic. Today, more than 90% of these funds have been paid out to health care practices who experienced revenue losses and expenses related to the pandemic.

Qualified Use of Funds

Funds should only be used to reimburse health care practices for COVID-19 related expenses and for lost revenue. Health care practices must keep track of eligible expenses and owners are required to certify to their adherence to the regulations related to the funds and cannot claim expenses otherwise covered by the Paycheck Protection Program or Economic Injury Disaster Loan.

Examples of qualified health care related expenses include:

  • Supplies or equipment used to provide services to possible or actual COVID-19 patients
  • COVID-19 related workforce training
  • Reporting of COVID-19 test results to governmental authorities
  • Building of temporary structures to help care for COVID-19 patients
  • Additional resources to expand or preserve care delivery
  • Employee wages and health care benefits
  • Equipment lease payments
  • Rent or mortgage payments

Determining Lost Revenue

If PRF funds aren’t fully utilized through expenses, providers will need to report lost revenues on a quarter-by-quarter basis. There are three methods available to report lost revenues, including:

  1. Actual to actual – The difference between actual patient care revenue using a year-over-year quarterly comparison.
  2. Budget to actual – The difference between budgeted (prior to March 27, 2020) and actual patient care revenue.
  3. Alternate Reasonable Methodology – The use of any reasonable method for estimating lost revenues with a narrative explaining the method and attestation explaining how lost revenues were attributed directly to COVID-19.

Unused Funds

During any period, if a health care practice doesn’t have allowable expenses and lost revenues to demonstrate full utilization of the funds, the unused amount should be returned. This can be initiated through the Return Unused PRF Funds Portal. Recipients then have 30 days after the end of each reporting period to return unused funds.

Reporting Timing

Any health care providers that received at least $10,000 in aggregate during any given payment period are required to report on the use of those funds related to eligible expenses and lost revenue via the Provider Relief Funding Portal.

Reporting time periods were established depending on the receipt date of PRF payments, as outlined below:

Period Funding Period Deadline to Use Funds Reporting Period
1 April 10 to June 30, 2020 June 30, 2021 July 1 to  Nov. 30, 2021
2 July 1 to Dec. 31, 2020 Dec. 31, 2021 Jan. 1 to March 31, 2022
3 Jan. 1 to June 30, 2021 June 30, 2022 July 1 to Sept. 30, 2022
4 July 1 to Dec. 31, 2021 Dec. 31, 2022 Jan. 1 to March 31, 2023

Leverage guidance from the HHS on how to use the reporting portal.

Need Assistance?

Doeren Mayhew’s dental CPAs are here to help. Contact us today for assistance understanding your PRF distributions, financial impacts and reporting requirements.