December 14, 2021

Long-awaited Phase 4 PRF Payments Arriving Dec. 16

BY Nicole Fallon

The methodology for calculating the amounts of the Phase 4 distributions differs from prior general distributions. Of the $17 billion available for Phase 4, about 75% or $12.75 billion is set aside for the base payment and the remaining 25% ($4.25 billion) will be distributed as bonus payments. The Phase 4 payments are made up of these two components:

  • A base payment that reflects a % of a provider’s reported lost revenues and eligible expenses between July 1, 2020 and March 31, 2021. The percentage a provider received is based upon whether a provider was considered small, medium or large based upon their annual net patient care revenue. The definitions are as follows:
  • Small providers are those with as less than or equal to $10 million in annual net patient care revenues. Their base payment was 45% of their reported lost revenues and expenses. 
  • Medium providers had revenues between $10 -100 million and received 25% of reported lost revenues and expenses. 
  • Large providers have $100 million or more in annual net patient care revenues and received 20% of their reported lost revenues and expenses. 
  • A bonus payment was also available based upon the volume of Medicare, Medicaid and CHIP services provided between January 1, 2019 and September 30, 2020. For this calculation, Medicaid and CHIP claims were priced at Medicare rates for this calculation.

In total, the average payments that will be going out on December 16 are: $58,000 for small providers, $289,000 for medium providers and $1.7 million for large providers. The percentages of a provider’s lost revenues and expenses due to coronavirus are disappointingly low given the tremendous needs of providers and the fact that these payments are based upon lost revenues and expenses between July 1, 2020 and March 31, 2021. The losses continue to mount for most providers. The percentages were determined after HRSA reviewed the applications assessing reported provider needs compared to the available PRF dollars.  Translation, substantially more relief will be needed to help providers cover the mounting expenses and lost revenues resulting from the pandemic. 

It should also be noted that HRSA ensured that providers who had not received any prior PRF payments received 2% of their annual net patient revenues or their calculated base payment, whichever was greater. In another move toward equity, HRSA will deduct any previous PRF payments a provider may have received that were not deducted in Phase 3 before finalizing the base payment. “This will allow providers that have not recently benefitted from the Provider Relief Fund to receive greater financial support,” according to HRSA. 

HRSA has provided a state-by-state breakdown of the Phase 4 December payment distributions and number of providers in the state receiving those funds. A detailed listing of providers receiving Phase 4 payments will not be available until providers attest to the payments. As always, providers will have 90 days to attest to receipt of the payments and the corresponding Phase 4 terms and conditions.