Long-Awaited Release of $25.5B in Remaining Provider Relief Funds Announced
Posted on 15th Sep 2021
The Health Resources and Services Administration (HRSA) announced it will open a Phase 4 application process on September 29 for providers to access $25.5 billion in remaining Provider Relief Funds (PRF). The $25.5 billion includes the $8.5 billion for rural provider relief that Congress appropriated as part of the American Rescue Plan. LeadingAge is pleased to see that these funds are finally being made available after months of advocating to the Administration and Congress about the acute need of aging service providers to fill the gaping holes caused by lost revenues and mounting expenses to respond to COVID.
Eligibility: Providers who were previously eligible for PRF are eligible in this phase if they had lost revenues and/or expenses due to COVID-19 between July 1, 2020 and March 31, 2021.
Available funds: $17B will be distributed among all applicants; $8.5B will be available only to providers serving Medicaid, CHIP and Medicare patients living in rural communities. The Rural Health Grants Eligibility Analyzer tool can be used to see what areas qualify as “rural” for the purposes of these payments. The analyzer seems to imply that the provider needs to be located in a “rural” geography vs. the patient being served residing in a rural community. LeadingAge will seek clarification on this point.
Payments: Providers will receive a distribution that takes into account a provider’s: 1) July 1, 2020 – March 31, 2021 lost revenues and expenses related to COVID; 2) the size of their organization, with smaller organizations receiving a distribution that covers a higher percentage of their losses and expenses; and 3) Medicaid and CHIP claims. 75% of the Phase 4 payment will be based off of a provider’s lost revenues and expenses from the relevant time period and 25% will be a “bonus” payment calculated off of the amount of services providers deliver to Medicaid, CHIP and Medicare patients. HRSA implies it will apply Medicare rates to Medicaid and CHIP claims data in some way to determine this portion of the payment. Provider payments will not exceed 100% of their lost revenues and expenses for the applicable timeframe.
Unique to Phase 4: HRSA indicates it has made some changes to focus on equity. One element is they will reimburse smaller providers for their lost revenues and COVID-19 expenses at a higher rate than larger providers. This is based upon an assumption that smaller providers’ margins are thinner. There are no details yet on how small, medium nor large will be determined or defined. In addition, HRSA will include what they call “bonus” payments to those providers who serve individuals in Medicaid, CHIP and Medicare. Therefore, it appears those who exclusively take private pay will not be eligible for these “bonuses”.
Application: HRSA will open the Application and Attestation portal on Sept 29 for providers to submit their applications. It is not clear yet when the deadline to apply will be. However, HRSA has indicated they will wait to calculate all distributions until it receives all applications. This approach is to ensure that it stays within the prescribed fund limits established for this phase. Providers who qualify for both the general and the rural distributions can apply using a single application.
By: Nicole Fallon