DHHS Releases $25.5 Billion in COVID-19 Relief Funding Targeting Smaller Providers

On September 10, 2021, the Biden-Harris Administration announced that the U.S. Department of Health and Human Services (“DHHS”), through the Health Resources and Services Administration, is making $25.5 billion in new funding available for health care providers affected by the COVID-19 pandemic. This represents the first additional funding availed for these purposes in nearly 12 months. The new funding comes roughly a week after Republican Senate leaders wrote to the Biden administration calling for the swift distribution of the remaining money. The funding is intended to bolster reimbursement to providers that serve a disproportionate amount of Medicare and Medicaid patients. The September 10, 2021 announcement comes as some provider groups have advocated for DHHS to release the remainder of the $178 billion relief fund passed by Congress in 2020. The funding includes $8.5 billion in resources from the American Rescue Plan Act passed earlier this year and another $17 billion from the Provider Relief Fund (“PRF”) previously established under the CARES Act.

The new funding will be allocated based on providers’ lost revenue and higher expenses from July 1, 2020 to March 31, 2021 (the “Reporting Time Period”). DHHS is specifically targeting smaller providers for lost revenues and COVID-19 expenses incurred at a higher rate, as compared to larger providers. There will also be bonus payments for providers that serve Medicaid, Children’s Health Insurance Program and/or Medicare patients. These bonuses will be based on the generally higher Medicare rates to ensure equity for those serving low-income children, pregnant women, people with disabilities and seniors. DHHS will also make payments to rural providers based on the amount of Medicaid, CHIP and Medicare services provided to patients in rural areas.

In order to expedite and streamline the application process and minimize administrative burdens, providers will apply for both programs in a single application. DHHS will use existing Medicaid, CHIP and Medicare claims data in calculating payments. The application portal will open on September 29, 2021. To help ensure that these funds are used for patient care, PRF recipients will be required to notify the HHS Secretary of any merger with, or acquisition of, another health care provider during the period in which they can use the payments. Providers who report a merger or acquisition may be more likely to be audited to confirm their funds were used for coronavirus-related costs, consistent with an overall risk-based audit strategy. Additionally, in light of the challenges providers across the U.S. are facing due to recent natural disasters and the Delta variant, DHHS has announced a 60-day grace period to help providers come into compliance with their PRF reporting requirements if they fail to meet the deadline on September 30, 2021, for the first PRF Reporting Time Period. While the deadlines to use funds and the Reporting Time Period will not change, HHS has committed to not initiate collection activities or similar enforcement actions for noncompliant providers during this grace period.

For more information about eligibility requirements, the documents and information providers will need to complete their application, and the application process for PRF Phase 4 and ARP Rural payments, visit: https://www.hrsa.gov/provider-relief/future-payments.


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