Not-for-profit healthcare entities and the Provider Relief Fund: Use, reporting, and more

Your organization may have been fortunate in receiving an influx of funding from several federal stimulus sources in response to COVID-19, such as HHS Provider Relief Funds and COVID-19 Uninsured Program Portal funding. While this additional support provides a substantial benefit to helping your organization maintain capacity through any future COVID-19-related impacts to business, it also comes with terms, conditions, and other regulatory requirements that must be followed. Keep these considerations in mind as you use these additional funding sources:

1. Is your organization clear on the spending timelines and reporting requirements for the usage of funds?

The Provider Relief Fund (PRF) Reporting Portal recently opened for Reporting Period 2 (Period 2) on Jan. 1, 2022, and will remain open through Mar. 31, 2022, which is when the Period 2 submission is due. All entities that have received $10,001 or more in the aggregate (General and/or Targeted PRF payments) from Jul. 1, 2020, through Dec. 31, 2020, must report on their use of funds (COVID related expenses/Lost Revenue due to COVID-19) in the PRF Reporting Portal for Period 2. The deadline to use funds for payments received in Period 2 was Dec. 31, 2021. HHS has listed some Reporting Portal updates (What's New PRF Reporting 2 Fact Sheet) for returning reporting entities as well as updates for the returning reporting entities who are electing the Lost Revenue option (i.e. changing the methodology for calculating lost revenues, changes to previously reported patient care revenue, etc.). There are also other PRF review resources posted on the Health Resources & Services Administration’s (HRSA) website that can be helpful tools in assisting recipients prepare the PRF reporting submission for Period 2 (Review Resources - PRF Reporting Period 2).

2. Have you implemented sufficient procedures for tracking use of funds?

The use of all funding streams will need to be diligently documented so that when reporting on use of funds for Period 2, you will be able to clearly show that multiple funding streams were not being used for the same expenses – that you didn’t engage in any “double-dipping.” This will also facilitate the reporting that will ultimately have to be done for all funding streams to confirm that you have used funding aligned with the terms and conditions on usage. Expenses charged to each funding source should be clearly documented in the accounting records to stand up to audit. Providers should also be cognizant of the fact that the Period of Availability for Period 2 payments has some overlap with PRF Reporting Period 1 (Period 1). Providers will need to demonstrate that expenses and/or lost revenues utilized for Period 2 did not “double-dip” and become duplicative of the same expenses and/or lost revenues recognized in Period 1.

3. Have you strategically planned how you are going to prioritize use of various funding streams?

Each federal funding stream received in response to COVID-19 has different permissible uses and timelines that dictate how and when funds can be spent. Have you examined your operating expenses on a regular basis since the pandemic hit or projected continued impact from COVID-19 to determine how best to allocate funds? Are you prioritizing fund use from the sources that are most restrictive, and with the shortest timeframe, over those that are least restrictive, so that you can make sure you have additional support available if COVID-19 continues to impact your organization?

4. Have you considered Uniform Guidance Single Audit implications?

Provider Relief Fund General and Targeted Distribution payments (Assistance Listing Number 93.498) and COVID-19 Testing for the Uninsured reimbursement payments (Assistance Listing Number 93.461) are also federal awards and subject to Single Audit. Subparts B (General Provisions), D (Post Federal Award Requirements), and F (Audit Requirements) of the Uniform Guidance apply to Provider Relief Funds. In accordance with the provisions of 2 CFR 200, Subpart F -Audit Requirements, nonfederal entities that expend financial assistance of $750,000 or more in federal awards in a fiscal year are required to have a single or a program-specific audit conducted for that year. Provider Relief Funds are subject to certain compliance requirements as identified in the Office of Management and Budget (OMB) 2021 Compliance Supplement. Although, Subpart E (Cost Principles) do not apply to PRF, per the 2021 Compliance Supplement, “charges to the PRF must be necessary, reasonable, accorded consistent treatment and conform to limitations and exclusions of the term and conditions of the award.” Per guidance released through  PRF FAQ's,  entities will be required to include the PRF expenditures and/or lost revenues on their Schedule of Expenditures of Federal Awards (SEFA) for fiscal years ending on or after Jun. 30, 2021. Entities with fiscal year ends Dec. 31, 2021, through Jun. 29, 2022, are required to report on the SEFA the total expenditures and/or lost revenues from both Periods 1 and 2 PRF report submissions to the PRF Reporting portal.