The Provider Relief Fund Saga Continues
By Stephen Shaver, Esq.
Wachler & Associates, PC
The week of May 9, 2022, healthcare providers began to find out if their requests to file late reports under the Provider Relief Fund (PRF) were granted. Providers whose requests were granted will have 10 days to file the required reports, while providers whose requests were denied can likely expect a repayment demand. These decisions are the latest chapter in the saga of the ever-shifting reporting requirements under the PRF.
Although initially intended to keep the nation’s healthcare providers afloat during the early days of the COVID-19 pandemic, the PRF has since descended into a bureaucratic labyrinth of compliance traps ready to snare the unsuspecting provider. The PRF is a $178 billion fund created by Congress through the CARES Act and currently administered by the Health Resources and Services Administration (HRSA) of the Department of Health and Human Services (HHS). HHS has subdivided the PRF into various general and targeted distributions. These distributions were paid to providers in several waves between April 2020 and the present. Although there are currently dozens of types of distributions under the PRF, the highest value and most widely distributed payments were paid out to providers as general distributions in Spring and Summer 2020. These early payments included the first payments under the PRF, in April 2020, which were unsolicited and were deposited directly into providers’ bank accounts without prior application or notification. Providers had to quickly decide whether to return the funds, or to keep them and agree to abide by the terms of the PRF, despite not knowing at the time precisely what those terms were. It is these early distributions that are the subject the currently reporting fiasco.
Initially, the statutes creating the PRF required providers who received more than $150,000 from any federal coronavirus relief effort to submit quarterly reports regarding their use of the relief funds. This requirement was also included in the terms and conditions associated with most distributions under the PRF. However, HHS, likely realizing that it was infeasible in mid-2020 for providers to submit these reports and for the agency to process them, directed providers to wait for HRSA to release detailed reporting requirements and a timeline for reporting for all PRF distributions.
In late 2020 and early 2021, HRSA gradually announced guidance outlining and then revising the information that PRF recipients would need to report. In general, this information includes documentation that the recipient used the funds in compliance with the terms of the PRF, as well as administrative information about the recipient itself. In many cases, this guidance came months after providers had agreed to retain the fund and abide by the terms, or after providers had already spent the funds, leaving providers scrambling to comply.
In late 2020, HRSA announced that reports would be due on February 15, 2021, with a reporting portal opening on January 15, 2021. While the reporting portal opened as scheduled and allowed providers to register, HRSA repeatedly pushed back the due date for reporting.
In June 2021, HRSA released the long-awaited reporting deadline. As the PRF by that time contained dozens of types of distributions that had been paid out over the preceding year and continued to be paid out, HHS established a reporting schedule wherein reports were due based on the date when the recipient received payment under the PRF. For example, providers who received payments between April 10, 2020 to June 30, 2020 (referred to by HHS as “Reporting Period 1”), which included most of the general distributions and the early, unsolicited distributions, were required to file their reports by September 30, 2021. HRSA later extended the deadline for Reporting Period 1 into December 2021. HHS also established deadlines for Reporting Period 2, Reporting Period 3, and Reporting Period 4.
In March 2022, HRSA began sending letters to providers who had not filed reports that were due under Reporting Period 1. These letters bluntly informed providers that they were now required to return the full amount of any PRF funds received within 30 days. These letters caused significant outcry from providers, representatives, and industry groups, and HRSA quickly backtracked. Instead of demanding repayment, HRSA allowed providers to file requests to file late reports, provided the provider attested that it met one of several extenuating circumstances to justify the late reporting. HRSA gave providers an exceptionally short window to file these requests, only 11 calendar days. All requests to file late reports under Reporting Period 1 had to be filed between April 11, 2022 and 11:59 p.m. Eastern Time on April 22, 2022. HRSA also implemented a similar process for providers to request to file late reports under Reporting Period 2.
Starting the week of May 9, 2022, providers under Reporting Period 1 who filed requests to file late reports began to receive decisions from HRSA regarding their requests. Where HRSA approves a request to file a late report, the provider generally has 10 days from the date of approval to file their PRF report. Where HRSA denies a request, it will generally demand prompt repayment. HRSA has indicated it does not intend to provide appeal rights for these decisions, but HRSA has already changed course several times in the process of defining these reporting requirements. Perhaps the larger issue is the significant audit and enforcement work that HHS has promised once it has provider’s PRF reports in hand to audit. With deadlines for the other reporting periods stretching into 2023 and potentially billions of dollars in audit findings and overpayment demands to come, the saga of the PRF is likely to continue for years to come.