HHS Retracts Limits on use of PRF for Lost Revenues

Regulation | October 22, 2020 | by Nicole Fallon

On October 22, the U.S. Department of Health and Human Services (HHS) issued an explanatory statement along with a revised version of its reporting requirements that reversed its prior position which would have limited providers’ use of Provider Relief Funds (PRF) as it relates to lost revenues. This initial version of the document entitled, “General and Targeted Distribution Post-Payment Notice of Reporting Requirements”  was issued September 19 and caused much consternation among providers. This change represents an advocacy victory, as LeadingAge raised these concerns with HHS on multiple occasions.

HHS indicated that its change in position was in direct response to pressure from stakeholders and Members of Congress who were not supportive of the Sept. 19 requirements. When the initial reporting guidance was issued in September, HHS proposed using an entirely new way of calculating lost revenues than had been used to date under the PRF. The requirements at that time also placed limitations on the use of the PRF funds for lost revenues. At the time, HHS indicated that the goal of these changes was to prevent a provider from being more profitable in 2020 than they were in 2019 and to ensure funds were going where they were most needed.

The now revised version issued Oct. 22 reverts back to calculating lost revenue by calculating the difference between a provider’s 2019 and 2020 actual patient care revenue and eliminates the prior limitation on how much of PRF payments can be applied to that lost revenue. It retains much of the original guidance including the expectation that PRF dollars should first be used for eligible expenses and then lost revenues. In its explanation of the change, HHS said, “There is consensus among stakeholders and Members of Congress who have reached out to HHS that the PRF should allow a provider to apply PRF payments against all lost revenues without limitation.”