Wachler & Associates Health Law BlogHHS Increases Phase 3 of Provider Relief Fund and Will Begin Distribution
On December 16, 2020, the Department of Health and Human Services (“HHS”) announced that it would begin Phase 3 of general distributions under the Provider Relief Fund (“PRF”) and that Phase 3 would be larger than initially planned. The PRF is a $175 billion fund created Congress through the CARES Act and administered by HHS to provide financial relief to healthcare providers during the COVID-19 pandemic. The PRF is administered by HHS through the Health Resource Services Administration (“HRSA”). HHS has subdivided the PRF into various general and targeted distributions.
Earlier in 2020, HHS had made two general distributions under the PRF. The Phase 1 general distribution consisted of $50 billion in financial payments, released in two successive tranches of $30 billion and $20 billion, to healthcare providers based to providers who billed Medicare. The Phase 2 general distribution consisted of an additional $18 billion in financial payments to providers that billed Medicaid, dentists, assisted living facilities, and providers that were not eligible under the terms of Phase 1 due to a change in ownership.
On October 1, 2020, HHS announced the Phase 3 general distribution. The Phase 3 general distribution was initially planned to consist of $20 billion on financial payments to providers who were either excluded from the initial two phases, or who were eligible under the first two phases but required additional funding to cover ongoing financial losses accrued during the pandemic. 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 practicing January 1, 2020 through March 31, 2020. All providers who receive payments must attest to receiving the payment and accept the associated Terms and Conditions.
Providers were required to apply for a payment under the Phase 3 general distribution and report significant amounts of information regarding their revenue and expenses. However, after reviewing these applications, it became clear to HHS that the needs of healthcare providers outstripped the planned $20 billion. In response, HHS increased the size of Phase 3 to $24.5 billion dollars, a move which HHS reports will meet approximately 88% of each applicant’s reported lost revenues and net change in expenses caused by the coronavirus pandemic in the first half of 2020.
According to HHS, Phase 3 payments began on December 16, 2020 and will continue into January 2021. HHS reports that over 70,000 applicants will receive funds under Phase 3. However, a remaining 35,000 applicants will not receive an additional payment either because they experienced no change in revenues or net expenses attributable to COVID-19, or because they have already received funds that equal or exceed reimbursement of 88 percent of reported losses.
For over 35 years, Wachler & Associates has represented healthcare providers and suppliers nationwide in a variety of health law matters. If you or your healthcare entity has any questions pertaining to the Provider Relief Fund or healthcare compliance, please contact an experienced healthcare attorney at 248-544-0888 or wapc@wachler.com.