Provider Relief Funds (PRF) were provided to healthcare providers to address issues with lost revenues and increased expenses related to the COVID-19 pandemic. By providing these funds, the government attempted to foster and maintain the national health system so that it could appropriately respond to needs during the pandemic. American Rescue Plan (ARP) funds also provided targeted assistance to rural healthcare providers.
While these plans are not new, certain reporting and other requirements are changing as healthcare facilities start planning for 2023. As a healthcare provider, you need to stay on top of these reporting requirements to maintain compliance. Part of the agreement to receive the funds was to comply with reporting periods associated with each of these funds’ sources.
Upcoming Reporting Periods
On October 27, 2022, the Health Resources and Services Administration (HRSA) posted an update to its reporting requirements, the Provider Relief Fund (PRF) Distributions and American Rescue Plan (ARP) Rural Distribution Post-Payment Notice of Reporting Requirements. The new notice provides the following reporting period opening dates:
- Period 4: January 1, 2023
- Period 5: July 1, 2023
- Period 6: January 1, 2024
- Period 7: July 1, 2024
Period 3 just ended in September 2022. Period 4 reporting covers the time period from July 1, 2021, and December 31, 2021. The dollars for Period 4 need to be utilized by December 1, 2022. Then, reporting for Period 4 must be completed between January 1, 2023, and March 31, 2023.
Late Reporting Requests
Entities that have experienced extenuating circumstances might qualify to file a late report if they were unable to provide their Period 3 PRF Report by the deadline. This one-time option is available from November 14 to December 2, 2022 to submit a late Period 3 report. You must be approved to file a late report before simply filing the report. Further, providers must also return unused funds within 30 days of submitting their report.
Opportunities to complete reporting for Periods 1 and 2 have passed. If providers had extenuating circumstances for those periods, they could have submitted late reports, but those windows have closed at this point as well.
Distinguishing PRF and ARP Funds
As reporting for Period 4 looms, it is essential to remember that there is a difference between PRF and ARP Rural funds. While they are similar, they have some critical differences that will matter for reporting purposes. Perhaps the most significant distinction is the interplay between reporting requirements for parent and subsidiary companies.
ARP Rural funds cannot be transferred between parent and subsidiary companies, apart from a parent TIN providing those funds to the qualifying TIN (tax identification number). The rationale behind this restriction is because ARP Rural funds are based on historical data.
The ARP Rural monies were attached to specific patient claims, and those claims must be associated with a particular TIN. Therefore, if the parent TIN delivered the services, those funds must be received by the entity with the same TIN. If a parent entity received funds for a subsidiary, it must provide those funds to that subsidiary.
The HRSA requires that parent entities report on its subsidiaries’ use of ARP Rural money. The parent cannot use the funds if the subsidiary is the entity that qualified for the funds. If there is a merger or acquisition among entities that received a Targeted Distribution, they are more likely to be audited by HRSA.
Reporting Practices for 2023
The HRSA also recently announced that it has created a new reporting portal for commercial, for-profit providers. Hopefully, this new portal will make reporting easier and more streamlined for commercial providers. Not-for-profit entities must still submit their audit information to the Federal Audit Clearinghouse.
Experience from Past Audits: Quick Compliance Tips
The HRSA has completed several audits at this point. As a result, some providers are starting to report common “trouble areas” within the audits. Below are a few compliance tips that providers might want to consider as they continue submitting reports into 2023.
- Be sure you know the Terms and Conditions for each source of funds (ARP Rural and PRF do not have identical terms and conditions)
- Keep reporting documents in the same place, so it is easy to find them in the event of an audit
- Be sure you have supporting documents for each expense and ensure that you have not “doubled” an expense by mistake
- Ensure that you are treating all COVID-19 patients (including presumptive or action) as “in-network” patients
You should also be aware that audits might stem from more than just the HRSA. You might also see audits from the:
- Health & Human Services Office of the Inspector General (OIG)
- Federal Government Accountability Office (GAO)
- Department of Justice (DOJ)
These programs have provided upwards of $178 billion in funding, so each of these entities has an interest in ensuring that the monies are used properly.
If you are facing an audit, you may want to consider involving legal counsel or an accounting professional to help you work through this process. The auditing procedure can be extremely time-consuming and daunting, and having outside help can be very beneficial.
If you have any questions or would like additional information, please contact DMJPS.
Karen Gray, CPA, MST
Karen S. Gray is a Senior Manager in Tax Services at DMJPS PLLC. Karen has over 20 years of public accounting experience. At DMJPS, she provides tax compliance, consulting, and preparation services to corporations, partnerships, nonprofits, and high net worth individuals.