Here are some steps providers can take now to prepare for Reporting Period 3 and beyond:

• Make sure you understand which payments received were from the Provider Relief Fund (vs. Paycheck Protection Payments or Medicare advanced payments or state grants) and if they were general or targeted distributions.  Knowing this information will ensure that your report includes all the PRF payments received. Some providers misunderstood what payments they received were for and failed to include them on their report. This error will require a provider to return the funds that were not reported upon.  This overview explains each distribution and identifies when various payments were sent.
• Discuss who in the organization will be submitting the reports. Some providers inadvertently missed the Reporting Period 1 deadline because they failed to communicate internally about who was responsible for submitting the report. Sometimes this was within a department. Other times the parent organization/corporate headquarters and its subsidiaries/affiliates didn’t discuss which entity was going to report on which PRF payments. The result was they were deemed out of compliance. Now is a great time to discuss who in your organization will report on the general distributions (e.g. Phase 2 or Phase 3) you received and for nursing homes, discuss who is responsible for submitting reports on the Nursing Home Infection Control Quality Incentive Payments received in January and February of 2021. Make sure the responsible person will not be on vacation when the reports are due (Reporting Period 3 submission deadline).
• Assess whether you have enough expenses and lost revenues to offset PRF received in the first half of 2021. Coronavirus expenses providers incur now through June 30, 2021 can be reported against the funds received in the first half of 2021. To determine if there is an opportunity to incur expenses now to help with your Reporting Period 3 (RP3) report, add up your PRF general distributions (e.g. Phase 2 or Phase 3) received between January 1 – June 30, 2021 and compare to the coronavirus expenses you have not yet reported and the lost revenues that will be carried forward from the last report plus any lost revenues incurred so far in 2022. If the amount of payments received exceed your organization’s expenses and lost revenues, the difference will have to be returned. Nursing homes that received Nursing Home Infection Control Quality Incentive Payments in January and February 2021, should total these dollars received and compare them to the non-reported infection control expenses they have incurred since January 2020. Providers who do not have enough expenses to offset their PRF payments received for this time period still have time to make purchases of personal protective equipment (PPE), testing supplies, to issue staff bonuses or to purchase and install air purification systems, as well as other infection control expenses.  These expenses must be incurred or projects completed by June 30, 2022 to be applied to RP3. Remember you can only report an expense that is coronavirus related and hasn’t been reimbursed by another source. RP3 will kick off July 1, 2022, and must be completed by September 30.
• Review Terms and Conditions for the Funds Received. Providers who have received Phase 4 general distribution payments or targeted American Rescue Plan (ARP) Rural payments should make sure they review the Terms and Conditions associated with these payments. While they are largely similar to the terms and conditions for prior distributions, HHS added a few new provisions requiring providers:

1. To place their PRF funds received into an interest-bearing account;
2. To notify HHS if they are involved in a merger or acquisition of another health care provider during the Payment Received Period.

For the interest earned requirements, providers will be required to report on the interest earned for each separate PRF distribution. Providers should consider how they will track this information by payment as they deposit these funds. There are some exceptions to the interest-bearing account requirement for non-federal entities.  The non-Federal entity must maintain advance payments of Federal awards in interest-bearing accounts, unless the following apply:

• the non-federal entity receives less than $120,000 in federal awards annually;
• the “best reasonably available” account would not be expected to earn more than $500 in interest each year; or
• the required minimum or average balance requirements are so high that it is not feasible.

ARP Rural Funds have an additional provision that prohibits providers from transferring or allocating these funds to another entity including a parent organization. ARP Rural funds must be retained by the Tax Identification Number that qualified for them.

A little planning now can save you from being required to return funds later.

More information on PRF reporting including what expenses are eligible can be found on the PRF website here.