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HHS announces new eligibility for providers seeking Provider Relief Fund distributions

The new deadline applies to newly eligible providers as well as the eligible Medicaid, Medicaid managed care, CHIP and dental providers.

Mallory Hackett, Associate Editor

Certain eligible providers that missed the first phase of additional Provider Relief Fund payments may begin submitting their applications for possible funds by August 28.

The providers which are now eligible include those that underwent a change in ownership in 2019 or 2020 under Medicare Part A and did not have Medicare fee-for-service revenue in 2019; those that missed the June 3 deadline to submit revenue information but received payment in Phase One; those that did not receive Phase One payments equal to approximately 2% of their annual patient revenue; and those that previously received Phase One payments but rejected and returned the funds.

All eligible providers will receive funding of up to 2% of their reported revenue from patient care, according to the Department of Health and Human Services. Providers that already received and kept payments from the first phase will have that amount taken into consideration when determining the Phase Two payment.

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The August 28 deadline applies to both newly eligible providers and the Medicaid, Medicaid managed care, CHIP and dental providers that are also eligible for Phase Two payments.

WHY THIS MATTERS

There are $175 billion worth of Provider Relief Funds: $100 billion from the Coronavirus Aid, Relief, and Economic Security Act and another $75 billion in the Paycheck Protection Program and Healthcare Enhancement Act.

The federal government allocated these funds to go towards hospital expenses, lost revenue due to the COVID-19 pandemic and to provide treatment and testing to uninsured Americans.

In the first phase of Medicare general distribution, HHS distributed $50 billion worth of funds to nearly 335,000 providers. Now, in Phase Two, an additional $15 billion has been made available to reach the remaining providers.

Despite these funds, hospitals and health systems are still facing tremendous financial strain. Operating EBITDA margins fell to -19% in April. They fell 174%, or 2,791 basis points, compared to the same period last year, and 118% compared to March, according to a Kaufman Hall report looking at April hospital financial performance.

THE LARGER TREND

Last week, HHS announced that it was extending the deadline to apply for funds to August 28.

Following Phase One, HHS announced the opening of Phase Two in June, with an initial deadline for submissions of July 20. That deadline was subsequently pushed back to August 3, due to provider feedback expressing that the deadline was too close to the announcement, and that more time was needed to complete applications.

Through conversations with provider organizations and congressional, state and local leaders, HHS came to the conclusion that this second deadline extension would be beneficial to possible recipients.

By allocating an additional $15 million, HHS hopes to reach the remaining providers that didn't receive funds during the first phase.

With the deadline extension, the department said it is hopeful it has provided as much flexibility as possible, while recognizing the constraints on smaller practices already operating on thin margins with limited administrative staff.

In addition to these allocations, HHS has distributed over $110 billion to hospitals, including $22 billion to providers in high-impact locations; $11 billion to rural areas; $4.9 billion to skilled nursing facilities; $500 million to tribal hospitals, clinics and urban health centers; and $13 billion to safety-net hospitals.

Twitter: @HackettMallory
Email the writer: mhackett@himss.org