HHS announces grace period for $25.5 billion in COVID-19 funding

A combined application for American Rescue Plan rural funding and Provider Relief Fund Phase 4 will open on September 29


By Kerri Hatt

Due to the challenges providers are facing as a result of recent natural disasters and the Delta variant, the U.S. Department of Health and Human Services (HHS), through the Health Resources and Services Administration (HRSA), has announced a final 60-day grace period to help providers come into compliance with Provider Relief Fund reporting requirements if they fail to meet the deadline on Sept. 30, 2021, for the first PRF Reporting Time Period. While the deadlines to use funds and the Reporting Time Period will not change, HHS will not initiate collection activities or similar enforcement actions for non-compliant providers during this grace period.

HHS is making $25.5 billion in new funding available for healthcare providers affected by the COVID-19 pandemic. This funding includes $8.5 billion in American Rescue Plan resources for providers who serve rural Medicaid, Children's Health Insurance Program or Medicare patients, and an additional $17 billion for Provider Relief Fund Phase 4 for a range of providers who can document revenue loss and expenses associated with the pandemic.

Consistent with the requirements included in the CARES Act of 2020, PRF Phase 4 payments will be based on providers' lost revenues and expenses between July 1, 2020, and March 31, 2021. According to the HHS announcement, PRF Phase 4 will reimburse smaller providers – “who tend to operate on thin margins and often serve vulnerable or isolated communities” – for their lost revenues and COVID-19 expenses at a higher rate compared to larger providers. PRF Phase 4 will also include bonus payments for providers who serve Medicaid, CHIP and/or Medicare patients.


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Similarly, HRSA will make ARP rural payments to providers based on the amount of Medicaid, CHIP and/or Medicare services they provide to patients who live in rural areas as defined by the HHS Federal Office of Rural Health Policy. ARP rural payments will also generally be based on Medicare reimbursement rates, according to the announcement.

Providers will apply for both programs in a single application to expedite and streamline the application process. HRSA will use existing Medicaid, CHIP and Medicare claims data in calculating payments. The application portal will open on Sept. 29, 2021. PRF recipients will be required to notify the HHS Secretary of any merger with or acquisition of another healthcare provider during the period in which they can use the payments.

HHS is releasing detailed information about the methodology utilized to calculate PRF Phase 3 payments. Providers who believe their PRF Phase 3 payment was not calculated correctly will be able to request a reconsideration.

For more information about eligibility requirements, the documents and information providers will need to complete their application, and the application process for PRF Phase 4 and ARP Rural payments, visit: www.hrsa.gov/provider-relief/future-payments.

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