It is important to understand that HRSA has outlined three options that providers can use to calculate lost revenue for the required reports on the provider’s use of the PRF. Here is a summary of the three options:

• Option 1 requires providers to report their 2019, 2020 and first half of 2021 revenues and the reporting portal calculates lost revenues by comparing year-over-year actual revenues.
• Option 2 is available to providers whose organizational budget was approved by March 27, 2020. It compares budgeted to actual revenues during the period of availability, which is January 1, 2020 – June 30, 2021 for the first report due Sept, 30, 2021.
• Option 3 allows a provider to calculate lost revenue using an alternate method that they describe through a narrative. In this scenario, providers calculate and report their lost revenues based upon their proposed methodology. HRSA will determine if the proposed methodology is reasonable and if not, the provider will be notified that they have 30 days to resubmit their lost revenue information via Option 1 or 2. HRSA notes that providers who utilize option 3 may be at higher risk of an audit.

Additional detail on the options and what data must be reported for each can be found in the June 11 PRF reporting guidance and PRF Reporting Portal User’s Guide – Reporting. 

Here are five other things you should know about lost revenues:

1. Providers can choose to use PRF payments only for their lost revenues. HRSA confirmed this information via email to LeadingAge  in response to a question we posed about whether providers are required to report their expenses related to coronavirus. While the reporting portal will ask providers to report their unreimbursed expenses related to coronavirus first in the overall use of funds calculations, a provider can enter “0”. This makes the PRF payments available to be applied solely to lost revenues. As PRF is likely the only source of reimbursement for lost revenues, providers may want to consider this approach. It should be noted that PRF payments can also be applied to lost revenues after they are applied to coronavirus related expenses. Nonetheless, PRF remains the payer of last resort and so expenses, and where applicable, lost revenues should be applied to other assistance received first before applying PRF payments.
2. Lost revenues are calculated per quarter as a standalone calculation. This means you can apply PRF payments to lost revenue in any given quarter during the period of availability. Previous guidance had indicated that lost revenues would be calculated on an annual basis, which may not have allowed providers to use PRF if they came out even by yearend. This is how it works. If you are using option 1 or 2 for calculating lost revenues, a provider will report revenue for each quarter during the Period of Availability (for the first reporting period this is Jan 1, 2020 – June 30, 2021). The reporting portal will calculate the provider’s lost revenues for each quarter based upon the data entered. It will add up all quarters with lost revenues for an annual total, which will be compared to the remaining PRF payments. More information can be found on this on page 24 of the July 1, 2021 PRF FAQs and in the PRF Reporting Portal User’s Guide on reporting.
3. For those using option 3 –an alternate method of calculating lost revenues, providers will calculate and report their own lost revenues. In quarters where there is an increase in revenue, you will enter “0”. What this means is, if a provider has a quarter of positive growth, this will not offset the lost revenue from a prior quarter. Just the quarterly lost revenues will be totaled. Specifically, you can apply PRF payments to quarters where you lost money to backfill even if you had other quarters that were revenue positive or neutral. More information on this topic can be found in the PRF Reporting Portal User Guide on p. 47 and is discussed in HRSA’s July 8^th webinar (recording available) on PRF reporting.
4. Unreimbursed lost revenues due to coronavirus from one reporting period can be carried forward to a future reporting period. If you get to the end of all of these calculations and your lost revenues exceed what you received for PRF in a given reporting period, you can apply the balance to PRF funds from future reporting periods. For example, if you only received $100,000 in April 2020 General Distribution payments, but your PPE costs and lost revenues during the period of availability were $2 million, then you will carryforward $1.9 million to the next reporting period which will cover payments received between July 1 – December 31, 2020.
5. Other assistance received related to coronavirus will not be used in calculation of lost revenues. Under the PRF Terms and Conditions you attested that you “will not use the Payment to reimburse expenses or losses that have been reimbursed from other sources or that other sources are obligated to reimburse.” Therefore, it is expected that you will apply expenses and losses to other assistance first and if any eligible expenses remain, you will then use PRF. More information on this topic can be found on page 29 of the PRF Reporting Portal User Guide.

Let LeadingAge know if you have questions about PRF Reporting. HRSA materials on reporting can be found here. Also, sign up now for the LeadingAge July 27th webinar, “Complying with New Provider Relief Fund Reporting Requirements, “where you can hear firsthand advice from accountants and advisors with CLA on how they are approaching the reporting requirements with their clients. The webinar will have ample time to answer your questions.