ARP Rural Provider Relief Payments Sent to Providers

Regulation | November 23, 2021 | by Nicole Fallon

Contrary to what was reported last week, the Health Resources and Services Administration(HRSA) began distributing American Rescue Plan (ARP) Rural provider relief payments to providers on Tuesday, Nov. 23. Payments were determined using Medicare and Medicaid claims data from January 1, 2019 through September 30, 2020 to assess the volume and type of services provided to individuals who reside in rural areas. Roughly 96% of the payments have been sent out. 

Providers should receive both an email as well as a paper letter that outlines details of the funding received including a breakdown of amounts by any subsidiary Tax Identification Number, for which the provider applied for funds. It is important to note that unlike other PRF distributions ARP rural funds cannot be transferred to a parent organization or other subsidiary and must only be used by the eligible recipient of the funds. Providers have 90 days from receipt of the funds to attest to receipt of the payment and the associated terms and conditions, which can be found here. Three key provisions of the terms and conditions that differ from prior terms and conditions are:

  1. The Recipient certifies that it provides or has provided services to Medicare, Medicaid and/or Children’s Health Insurance Program (CHIP) beneficiaries who are residents of rural areas, as defined by as defined by HRSA’s Federal Office of Rural Health Policy (https://www.hrsa.gov/rural-health/about-us/definition/index.html); this includes Medicaid and CHIP managed care arrangements;
  2. The Recipient certifies that it will retain the payment with the provider(s) associated with the applicable subsidiary or billing TIN and will not transfer or allocate the Payment to another entity not associated with the subsidiary or billing TIN. Control and use of the Payment must be delegated to the Recipient that was eligible for and received the Payment; and
  3. If the Recipient’s ARP Rural payment(s) exceeds $10,000, the Recipient agrees to notify HHS of a merger with or acquisition of any other healthcare provider during the Payment Received Period within the Reporting Time Period (as defined in the PRF Post Payment Notice of Reporting Requirements). Providers who report a merger/acquisition may be more likely to be audited, consistent with an overall risk-based audit strategy. Should a recipient choose to reject the funds, they must also complete the attestation to indicate this and return the funds within 15 calendar days.

Some members upon receipt of these payments were concerned these were Phase 4 payments and were disappointed because they were so small. It is important to keep in mind that these payments vary widely from as little as $500 up to more than $40 million for some health systems. Urban providers may see smaller amounts because they serve few Medicare and Medicaid beneficiaries who reside in rural areas, while providers in rural areas but should be larger. In addition, a total of $8.5 billion is being distributed under the ARP Rural. 

Providers who have not yet received funds will be notified by HRSA of a final payment determination, as soon as HRSA completes the review and processing of the remaining applications. For more information on how payments are calculated, please consult HRSA's PRF payment methodology webpage.  The U.S. Department of Health and Human Services (HHS) has published a list of each recipient of the ARP Rural funds and a state-by-state breakdown of the total number of providers per state who received the funds and the aggregate amount of ARP Rural funds received by providers in the state. These data will likely be updated as the final applications are processed.