HHS Issues Reporting Requirements for CARES ACT Funds

HHS just issued new reporting requirements to inform CARES Act Provider Relief Fund (PRF) recipients who received one or more payments exceeding $10,000 in the aggregate of the data elements that they will be required to report as part of the post-payment reporting process. This is a supporting document to the July 20, 2020 Post Payment Notice of Reporting Requirements.

The notice informs recipients of the categories of data elements that recipients must submit for calendar years 2019 and 2020 as part of the reporting process. HRSA plans to offer Question & Answer Sessions via webinar in advance of the reporting deadline, and as needed, HRSA will also issue Frequently Asked Questions to aid in the reporting process.

Reporting Guidelines on Use of Funds

Recipients will report their use of PRF payments by submitting the following information:

1. Healthcare-related expenses attributable to coronavirus that another source has not reimbursed and is not obligated to reimburse, which may include General and Administrative (G&A) or healthcare-related operating expenses (further defined via HHS website).
2. PRF payment amounts not fully expended on healthcare-related expenses attributable to coronavirus are then applied to lost revenues, represented as a negative change in year-over-year net patient care operating income (i.e., patient care revenue less patient care-related expenses for the Reporting Entity, defined below, that received funding), net of the healthcare-related expenses attributable to Coronavirus 2 calculated under step 1. (Please refer to the HHS website for a more detailed explanation of this convoluted calculation)

Recipients may apply PRF payments toward lost revenue, up to the amount of their 2019 net gain from healthcare-related sources. Recipients that reported negative net operating income from patient care in 2019 may apply PRF amounts to lost revenues up to a net zero gain/loss in 2020. If recipients do not expend PRF funds in full by the end of the calendar year 2020, they will have an additional six months in which to use remaining amounts toward expenses attributable to coronavirus but not reimbursed by other sources or to apply toward lost revenues in an amount not to exceed the 2019 net gain. For example, the reporting period January – June 2021 will be compared to the same period in 2019.

Timing

HHS has updated its website to state the reporting portal won’t be available until early 2021 (delayed from October 1, 2020, in its July 2020 notice). However, CMS doesn’t appear to have delayed the reporting deadline, so reports for 2020 expenditures and lost revenue related to COVID-19 are still due 45 days from December 31, 2020.

In addition, recipients who don’t expend PRF funds in full by the end of calendar-year 2020 will have an additional six months to use remaining amounts toward the expenses or lost revenues defined above.

Single Audit Status

Reporting Entities that expended $750,000 or more in aggregated federal financial assistance in 2020 (including PRF payments and other federal financial assistance) are subject to Single Audit requirements, as set forth in the regulations at 45 CFR 75.501. Recipients must indicate if they are subject to Single Audit requirements in 2020, and if yes, whether the auditors selected PRF payments to be within the scope of the Single Audit (if known at the time the Reporting Entity submits report).