Most healthcare providers received Provider Relief Fund (PRF) payments (as described in greater detail in a previous McGuireWoods client alert) from the Health Resources and Services Administration (HRSA) earlier in the pandemic. Yet, the PRF payments were provided in various phases over the past three years. Recipients who received one or more General and Targeted Distributions and/or American Rescue Plan (ARP) Rural Distribution payments exceeding $10,000 in the aggregate during an outlined payment received period (discussed below) are required to report during a specified reporting time period. A previous McGuireWoods client alert provides more detailed information on reporting time periods 1 through 7. These periods continue for such reporting based on the date funds were received.
Since the program’s inception, HRSA’s guidance on the appropriate use of funds and reporting requirements has evolved and continues to evolve. On April 7, 2023, HRSA published updated guidance on PRF Distributions and ARP Rural Distribution Post-Payment Notice of Reporting Requirements. Among the various modifications to the reporting guidance, the most notable include the addition of reporting periods 8 and 9 — including the applicable payment received period (after July 1, 2023) and period of availability dates — and new guidance concerning the impact of the sunsetting of the public health emergency (PHE) on the appropriate use of PRF and ARP Rural payments, particularly distinguishing between lost revenues and eligible expenses.
This guidance makes clear, as further described below, that providers can continue to spend PRF payments after May 11, 2023, at least in circumstances consistent with this updated guidance.
End of the COVID-19 Public Health Emergency
The COVID-19 public health emergency ends May 11, 2023. PRF and ARP Rural recipients may continue to use the payments for either: (i) appropriate healthcare-related expenses; or (ii) lost revenues attributable to COVID-19.
While previous guidance did not distinguish between the two uses in determining the appropriate spending time frame, the end of the COVID-19 PHE complicates how HRSA is viewing providers spending such PRF payments. In fact, the prior guidance was ambiguous on whether funds could be used at all after the sunsetting of the PHE. To avoid confusion, HRSA’s updated guidance clarifies that PRF and ARP Rural recipients may use payments for lost revenues attributable to COVID-19 incurred within the period of availability (the beginning of which is January 1, 2020, for all periods), but only until June 30, 2023 (the end of the quarter in which the COVID-19 PHE ends). By contrast, eligible expenses can be expended through Dec. 31, 2024, or June 30, 2025, based on date of receipt (as further detailed below).
Practically, this guidance provides two significant clarifications on the use of PRF payments after the COVID-19 PHE ends. First, for providers using the PRF payments for appropriate healthcare-related expenses, the spending time frame is not altered by the end of the PHE and providers may follow the guidance provided in McGuireWoods’ previous client alerts on the deadline to spend such funds. Consistent with HRSA’s previous guidance, the spending of PRF payments for healthcare-related expenses will be permitted through the applicable period’s period of availability, which provides for a time frame of at least 18 months after receipt. Thus, providers who have funds remaining during the applicable period may continue to spend that money during the appropriate Periods of Availability (which, as seen below, differ depending on the period). Notably, future payment received periods will persist after the end of the PHE and still will require providers to report their use of the PRF payments they received. Thus, providers must continue to track the use of the PRF funds and report such use during the applicable reporting time period.
Second, for providers using the PRF payments for lost revenue purposes, the spending time frame is significantly altered by the sunsetting of the PHE. Based on this new guidance, providers may continue to use the funds for lost revenue only until June 30, 2023. Effectively, HRSA will allow providers to use their remaining funds for lost revenue purposes after the sunsetting of the PHE on May 11, 2023, but only until the end of the second calendar quarter, which is June 30, 2023. Despite these changes, the updated guidance does not change a provider’s ability to use lost revenue from earlier periods, if not already fully accounted for in earlier reporting.
Addition of Reporting Periods 8 and 9
Since McGuireWoods’ most recent client alert on Provider Relief Fund reporting guidance, HRSA has added two new reporting periods 8 and 9.
The relevant periods with outstanding deadlines (5, 6, 7, 8 and 9) are outlined below. For more detailed information and a full history of the payment received periods and applicable periods of availability and reporting time periods, see the HRSA reporting requirements webpage. As a reminder, such reports will be due for those time periods if a provider received $10,000 or more in that period, even if the provider reported during an earlier time period.
Period 5
- Payment Received Period: Jan. 1 to June 30, 2022
- Period of Availability: Jan. 1, 2020, to June 30, 2023
- Reporting Time Period: July 1 to Sept. 30, 2023
Period 6
- Payment Received Period: July 1 to Dec. 31, 2022
- Period of Availability: Jan. 1, 2020, to Dec. 31, 2023
- Reporting Time Period: Jan. 1 to March 31, 2024
Period 7
- Payment Received Period: Jan. 1 to June 30, 2023
- Period of Availability: Jan. 1, 2020, to June 30, 2024
- Reporting Time Period: July 1 to Sept. 30, 2024
Period 8
- Payment Received Period: July 1 to Dec. 31, 2023
- Period of Availability: Jan. 1, 2020, to Dec. 31, 2024
- Reporting Time Period: Jan. 1 to March 31, 2025
Period 9
- Payment Received Period: Jan. 1 to June 30, 2024
- Period of Availability: Jan. 1, 2020, to June 30, 2025
- Reporting Time Period: July 1 to Sept. 30, 2025
With two additional reporting periods now defined based on funds received after July 1, 2023, HRSA may be suggesting that additional PRF payments may still be made. If so, HRSA would make such payments after the PHE ends and COVID-19 pandemic impacts likely will no longer be perceived as affecting most providers. Therefore, HRSA likely would make such payments, if any, based on COVID-19 impacts from earlier stages of the PHE. That said, HRSA has not committed to such additional funding. McGuireWoods will continue to monitor for availability of any additional funding, as well as additional updates to PRF reporting.
McGuireWoods has published additional thought leadership analyzing how companies across industries can address crucial business and legal issues related to COVID-19.