As stated in our previous blog post, on October 1, 2020, HHS announced it would be allocating an additional $20 billion as its Phase 3 General Distribution from the Provider Relief Fund (“PRF”) through the CARES Act. This Phase 3 General Distribution is intended for providers who were either excluded from the initial two (2) phases, or who were eligible under the first two (2) phases but require additional funding to cover ongoing financial losses incurred during the pandemic. Time is running out for health care providers to apply to HHS for these funds. The application deadline for what may be the final round of relief funds is November 6 at 11:59 pm EST. HHS urges providers to apply as soon as practicable. The applications are accepted on a rolling basis, so HHS asks that providers not apply during the final days of the application period.
The following paragraphs highlight key information regarding the Phase 3 General Distribution:
Who Can Apply?
The following providers are eligible for Phase 3 General Distribution funding: (1) providers who have previously received, rejected or accepted a General Distribution PRF payment; (2) behavioral health providers, including those that have previously received funding; and (3) healthcare providers that began providing services from January 1, 2020 through March 31, 2020.
On October 22, 2020, HHS announced that additional providers, such as residential treatment facilities, chiropractors, and eye and vision providers that have not yet received PRF distributions, are also eligible to receive funds from this last distribution.
When Will Distributions Be Made?
HHS will issue Phase 3 – General Distribution payments as soon as practicable after the November 6th application deadline. Entities that have not yet received two percent (2.0%) of annual revenue from patient care will be first to receive funds from the Phase 3 General Distribution.
The Phase 3 final payment amounts for applicants that have already received payments equaling two percent (2.0%) of annual patient care revenue will be determined once all applications have been received and reviewed.
How Will HHS Calculate 2% of Annual Revenue for Providers in Operation Less Than a Year?
Providers that began providing patient care in 2020 will be paid approximately 2% of patient care revenue based on the applicant’s reported financial information for those months in 2020 that they were in operation.
HHS has also stated that it may consider data from the same type of provider as the applicant when assessing the amount to be paid. However, no additional details have been provided regarding how that assessment of similar providers will be utilized to assess funds to be received.
How Will Distributions Over 2% of Annual Revenue Be Calculated?
The Phase 3 General Distribution will also take into account the financial impact of COVID-19 on individual providers and assess whether additional funds should be distributed to certain providers. The actual additional amount to be received will depend in part on the CARES Act funds available after the Phase 3 General Distribution to those that have not yet received an amount equivalent to 2% of annual revenue.
In assessing whether to award a provider additional funds over the two percent (2.0%) annual revenue amount, HHS will consider: (1) a provider’s change in operating revenue from patient care; (2) a provider’s change in operating expenses from patient care, including coronavirus expenses, and (3) payments received by the provider as part of previous Targeted Distributions.
Providers are encouraged to start the application process as soon as possible so as to not miss out on what may be the last general distribution of funds.
If you or your healthcare organization has any questions pertaining to Provider Relief Fund reporting, audits, or healthcare compliance, please contact George W. Bodenger at 610-212-5031 or firstname.lastname@example.org.