More Details about Phase 4 PRF

Regulation | September 17, 2021

The Health Resources & Services Administration (HRSA) shared more details on Wednesday about the next distributions of the remaining Provider Relief Fund (PRF) dollars on a stakeholder call with Acting Administrator Diana Espinosa, and in response to a series of questions posed by LeadingAge including the timeframe to apply, when payments will be made and how payments will be calculated.

As LeadingAge reported previously, the opportunity to apply for $17 billion in general distribution funds and $8.5 billion in American Rescue Plan (ARP) rural PRF will begin September 29. HRSA clarified Sept. 15 that providers will only have 4 weeks from that date to submit their application for consideration. This is a shorter window of time than previous PRF rounds. While this short turnaround time means HRSA will be able to distribute payments sooner, it also means providers should mark their calendars now for September 29 so they don’t miss the opportunity to apply. HRSA estimates it will distribute the rural provider payments by late November likely before Thanksgiving and the bulk of the Phase 4 general distribution payments will be made to providers by mid-December. They did note that payments for “complex cases” may not be received until after these deadlines as they will require more review.


HRSA explained they are continuing their quality review of applications and as such “higher value applications will be flagged” where the amounts submitted do not appear in line with provider peers. Providers whose applications are flagged may receive no payment or have their payment capped. However, HRSA has made an improvement to this process. These providers will now be able to request reconsideration of the determination and submit additional explanation and documentation to support the anomalous amounts in their application.


Rural PRF dollars

Eligibility for the $8.5 billion in ARP PRF for rural providers will be based upon patient location not provider location. HRSA will use claims data from January 1, 2019 through September 30, 2020 to evaluate a provider’s volume of Medicare, Medicaid and CHIP patients who reside in the Federal Office of Rural Health Policy defined rural areas. Therefore, the provider’s office or service location may be located in a rural or urban area but they can apply for these funds because they serve rural patients, residents or clients. This will be most relevant for home health agencies or HCBS providers who may have an office in an urban area but deliver services to individuals who live in rural locations. Providers will complete a single application for rural funds and the general Phase 4 PRF funds. HRSA indicated that it will be as simple as checking a box for the rural funds and entering the tax identification numbers (TINs) related to the rural application. This will make it easier for multi-site provider organizations that may have both rural and urban locations and clients.


Phase 4 PRF Distribution

HRSA has set aside $17 billion for Phase 4 general distribution. LeadingAge has learned that of this amount $12.75 billion will be distributed to providers based upon their lost revenues and COVID-19 expenses for July 1, 2020 – March 31, 2021. HRSA will wait until it has all applications to determine the specific percentage of those losses and expenses it can reimburse based upon the available funds. HRSA will reimburse these losses and expenses in a graduated fashion with smaller providers receiving the highest percentage, then a smaller percentage for medium providers and the lowest percentage for the largest providers. These supplemental payments (or higher percentages) will be determined based upon a provider’s patient service revenue as reported at the TIN level. HRSA has yet to release what the breakpoints will be for small, medium and large providers but the delineations will be based upon TIN patient revenue not number of people served.


The remaining $4.25 billion of the general Phase 4 distribution will be available for bonus payments. Providers who serve Medicare, Medicaid and CHIP beneficiaries will receive a bonus payment based upon the “amount and type of services provided” to these beneficiaries. To eliminate disparities among state Medicaid and CHIP reimbursement levels, HRSA will price these services at the Medicare rates. Essentially, HRSA will apply a certain dollar amount times the volume of patients served in these categories.


Providers receiving funds in this round will have until December 31, 2022 to spend the funds distributed through this application round, and will report upon their use in the fourth reporting period (January 1 – March 31, 2023).


Webinars on application process

HRSA will be offering two webinars – Sept 30 and October 5 – to review what information providers will need to apply for this round of PRF. More details will be available on the webinars and other resources made available in the coming week or so.


Phase 3 Payments Revisited

As a reminder, providers should review the Phase 3 methodology if they have questions about the amount they received in Phase 3. Upon review, if the amount received was inaccurate, there will be a new reconsideration process that providers can follow to have their case reviewed. To receive information on this process or pose questions, providers can contact the email box.