HRSA announced Friday morning that new funding is available to providers affected by COVID-19. Applications for funding open on September 29, 2021, but HRSA has not provided a deadline yet. More information will likely be released in the coming weeks.
Additionally, HRSA has provided a grace period for Period 1 Reporting and additional information about their methodology for determining Phase 3 distributions. Providers now have until November 30, 2021 to submit Period 1 reporting without facing recoupment or enforcement action, although technically HHS will deem these providers out of compliance.
Advis continues to monitor all COVID-19 funding updates. We provide a summary of the latest Provider Relief and ARP updates below:
- $25.5 billion in new funding:
- $8.5 billion in American Rescue Plan (ARP) funding for rural providers;
- $17 billion in Phase 4 for a broad range of providers.
- Applicants will use a single application to apply for both ARP and Phase 4 funds.
- HRSA will use existing Medicaid/CHIP and Medicare Claims data in calculating distributions.
- Application dates and deadlines:
- Opens: September 29, 2021.
- HRSA states that providers applying for Phase 4 funds also going through mergers and acquisitions during the same time period will be subject to audit scrutiny.
Phase 4 Provider Relief Funding:
- The funding is based on providers’ lost revenues and expenses from July 1, 2020 to March 31, 2021.
- Smaller providers will be reimbursed a higher percentage of lost revenues and expenses compared to larger providers.
- Bonus payments will be provided based on the number of services a provider provides to Medicaid, CHIP and Medicaid.
- 75% of the Phase 4 allocation will be calculated based on revenue losses and COVID-related expenses.
- Large providers will receive a minimum payment amount that is based on a percentage of their lost revenues and COVID-related expenses.
- Medium and small providers will receive a base payment plus a supplement;
- Small providers will receive the highest supplement.
- Base payment and supplement amounts will be determined after HRSA analyzes data from all applications received.
- No provider will receive a Phase 4 payment that exceeds 100% of their losses and expenses.
- 25% of the Phase 4 allocation will go toward bonus payments that are based on the amount and type of services provided to Medicaid, CHIP, and Medicare patients.
- HRSA will price Medicaid and CHIP claims data at Medicare rates, with some limited exceptions for some services provided predominantly in Medicaid and CHIP.
- Rural providers who meet the eligibility criteria, will receive a minimum payment.
American Rescue Plan Rural Payments:
- Will be based on the number of services Providers furnished to Medicaid/CHIP and Medicare beneficiaries in rural areas.
- Payments will be disbursed at the generally higher Medicare rate for CHIP patients.
- Rural providers will simultaneously be considered for both Phase 4 and ARP Rural payments.
- Payments will be based on the amount and type of Medicare, Medicaid, and CHIP services provided to rural patients.
- HRSA will price Medicaid and CHIP claims data at Medicare rates, with some limited exceptions for some services provided predominantly via Medicaid and CHIP.
- A minimum payment goes to Providers who serve any patients living in Federal Office of Rural Health Policy-defined rural areas, with Medicaid, CHIP, or Medicare coverage, and who otherwise meet the eligibility criteria.
- Rural providers who meet the eligibility criteria will receive a minimum payment.
- HRSA has provided a Rural Grants Eligibility Analyzer to help providers determine whether the communities they serve qualify for the ARP Rural Payments.
Phase 3 Funding and Reporting Period 1
Phase 3 Payment Methodology:
- 80% of payments were distributed in 2020.
- HRSA used the following criteria in calculating Phase 3 distributions. Detailed calculations, ratios, and formulas are provided in the attached document:
- Calculating 2 percent of Annual Patient Care Revenue;
- Calculating initial Loss Ratio and Provider-Type Loss Ratios;
- Capping Loss Ratios and other pre-payment value adjustments;
- Calculating 88 percent of Adjusted Losses;
- Selecting the greater of calculated A or D;
- Deducting all prior PRF payments from result of E; and
- Flagging and conducting manual review of flagged potential payments.
- HRSA is still developing a process to review and reconsider applications and payment determinations.
- Advis is in process of building a tool kit to assist in validating Phase 3 payments and is available to do so for providers upon request.
Period 1 Reporting Grace Period:
- For providers that do not submit their report for period 1 will not be subject to recoupment or other enforcement actions for a 60-day grace period, beginning October 1, 2021 and ending November 30, 2021. Providers will technically be deemed out of compliance.
- This does not apply to other reporting periods.
Advis is available to answer any questions and assist in the Provider Relief funding and reporting processes. Contact our experts online or call (708) 478-7030.
Published: September 13, 2021