Provider Relief Funds issued by the federal government during COVID-19 have done much to alleviate some of the financial strain placed on hospice providers. To fully realize the benefits, organizations must ensure they understand the eligibility requirements and procedures for reporting lost revenue. With a deadline approaching and confusion proliferating about allowable expenses, hospices are looking for answers as federal guidelines continue to evolve.
The CARES Act, enacted on March 27, 2020, earmarked funds $175 billion in Provider Relief Funds (PRF) for health care providers weathering financial storms brought on by the pandemic. Several rounds of funding have been distributed since to more than 70,000 providers across the health care continuum. The portion of these funds allocated to hospices remains unclear as many continue to take on financial hits from COVID-19’s turbulent waves.
Hospice providers are working to untangle the uncertainties lingering around federal guidelines as ongoing updates continue. Questions center around the reimbursable expenses that the funds cover, as well as what portion of the funds providers may have to pay back to the government.
“What’s interesting is that very early going, it was said that these distributions do not need to be repaid to the U.S. government,” said Mark Sharp, partner at BKD, LLP, during a recent National Hospice & Palliative Care Organization (NHPCO) webinar. BKD is an Illinois-based tax, audit and consulting firm. “They said no strings attached before they started coming out with some of the attestation and other requirements — but there were strings attached.”
Hospice providers will not need to repay PRF distributions to the U.S. government, assuming they comply with the terms and conditions of the payments. The U.S. Health & Human Services Department (HHS) has been rolling out ongoing guidance with reporting requirements for the payments. Understanding these requirements is a key element for hospice providers to manage the funds they received.
According to a recent report, providers who received in excess of $10,000 in PRF distributions will be required to report on these funds as part of the post-payment process. Hospices can compare the differences between 2019 and 2020 actual patient care revenue as one method of reporting, while comparing differences between budgeted and actual patient care revenue is another. Providers can also calculate losses attributable to the pandemic by “any reasonable method of estimating revenue” through an alternative method, according to the report.
Including an approved budget in required reporting will be key in helping to determine what constitutes as lost revenue attributable to COVID-19, according to Sharp. One stipulation is that the budget must have been approved by the organization’s leadership prior to March 27, 2020, when the CARES ACT was enacted.
With each phase of distributed government funds tied to its own set of terms, unwrapping the reporting requirements has left many hospices in the dark about is considered a loss attributable to the pandemic. Hospice providers and advocates are calling for clarification around allowable expenses.
The HHS clarified in December that hospices may consider dips in fundraising and philanthropic dollars as lost revenue in their PRF applications. As many hospices use this revenue to finance programs such as palliative care services, complementary therapies, hospice houses and services for individuals experiencing homelessness.
Along with revenue dips, higher expenditures for hospices stemmed from rising personal protective equipment (PPE) costs, along with increased paid leave for staff due to child care needs and quarantine periods after becoming or falling ill to COVID-19 themselves. Additionally, rising technology costs related to rising demand for telehealth and telemedicine services has added to the list of financial hardships pummeling hospice operations during the pandemic.
Amid uncertainty of attributable losses comes unknowns around a looming reporting window ahead. Originally due Feb. 15, HHS delayed the first reporting deadline for the PRF payments. Even without a known deadline or deciphering exactly how they’ll allocate the funds, hospices should still complete their PRF portal registration, according to Sharp.
“The registration basically puts on notice who’s going to be doing the reporting, and it’s going to allow that person or that organization registered to get ongoing updates directly on the reporting requirements,” said Sharp.
Hospice providers who received more than $10,000 must register in the Provider Relief Fund Reporting Portal. While not open for reporting yet, the portal is open for registration. Currently, no deadline for completing the portal registration has been announced. According to HHS, those registered will receive notifications about the fund reporting deadlines. Providers can additionally refer to the HHS’ reporting requirements and auditing frequently asked questions site for guidance.
One of the updates in updated federal guidance provides a window into what hospices can do with unused portions of the PRF funds they received.
“There’s more clarification on lost revenue that if you didn’t use all your Provider Relief Funds in the calendar year 2020, then you do have the first six months,” said Sharp. “As of this point, to use those funds in 2021 through June 30.”