November 26, 2020

Volume X, Number 331

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COVID-19: Provider Relief Fund General Distribution – Phase 3

On October 1, 2020, the Department of Health and Human Services (HHS) announced a new $20 billion Phase 3 of the Provider Relief Fund (PRF) General Distribution. Much like the Phase 2 funding, Phase 3 funding will be made available following the submission of an application by providers. Providers can begin applying for funds on Monday, October 5, 2020 and have until November 6, 2020 to complete their applications, though HHS is encouraging providers to apply early.

Phase 3 expands the eligibility for the PRF General Fund to behavioral health providers, including those who have not previously received funding. In addition, providers who previously received PRF General Distribution funds, and providers who began practicing between January and March 2020 can apply for additional funding. Applicants that have not yet received PRF payments of 2% of patient revenue will receive a payment that, when combined with prior payments (if any), equals 2%  of patient care revenue. With the remaining balance, HRSA will calculate an equitable add-on payment, in excess of the 2%. In doing so, HRSA will consider:

  • A provider’s change in operating revenues from patient care
  • A provider’s change in operating expenses from patient care, including expenses incurred related to coronavirus
  • Payments already received through prior Provider Relief Fund distributions.

The exact formula for determining the add-on payments is not yet known, and HRSA has cautioned the payments will not be made until it can review applications from all providers.. With respect to entities that were waiting for their TINS to be validated for the receipt of Phase 2 funding, applications not submitted by October 4, 2020 will be voided and the applicants will need to begin a new application under Phase 3.

This announcement comes on the heels of last week’s release of the long-awaited guidance establishing reporting requirements for health care providers that received PRF payments.  That reporting guidance continues to create confusion, as it modified prior guidance on how to calculate both health care expenses and lost revenues attributable to COVID-19. As calendar year 2020 moves into the fourth quarter, many providers continue to weigh whether or not they are able to retain PRF payments received. Additional guidance is expected.

© 2020 Foley & Lardner LLPNational Law Review, Volume X, Number 279
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About this Author

Alexis Bortniker, Health Care Attorney, Foley Lardner Law Firm
Partner

Alexis Bortniker is a senior counsel and health care lawyer with Foley & Lardner LLP. Her practice focuses on transactional and regulatory matters with an emphasis on counseling health systems, hospitals, and other providers in managed care and physician contracting. Ms. Bortniker is a member of the firm’s Health Care Industry Team.

Previously, Ms. Bortniker was an associate with Choate Hall & Stewart LLP where she gained experience working directly with health care organizations on regulatory and corporate compliance issues, including...

617.226.3177
Monica Chmielewski, Health Care Attorney, Foley and Lardner Law
Partner

Monica R. Chmielewski is a senior counsel and health care lawyer with Foley & Lardner LLP. She focuses her practice solely in representing health care providers and pharmaceutical and medical device companies in the area of health care, health care transactional work, clinical research and food and drug law. Ms. Chmielewski is co-chair of the firm’s Life Sciences Industry Team. She is also vice chair of the firm's Health Care Industry Team.

312-832-4556
Thuong Nguyen Health Care Attorney Foley & Lardner Los Angeles, CA
Associate

Thuong (Amy) Nguyen is an associate with Foley & Lardner LLP. She is a member of the firm’s Health Care Practice.

Amy served as a summer associate at Foley’s Los Angeles office. Prior to Foley, she was a research assistant at UCLA School of Law.

Industry Teams 

  • Health Care

Practice Areas

  • Corporate
213-972-4502
Anil Shankar, Foley Lardner, Health Care Lawyer, Attorney, Legislation
Senior Counsel

Anil Shankar is an associate with Foley & Lardner LLP. He focuses his practice on complex regulatory and reimbursement matters, with a particular focus on the Medicaid program and issues affecting safety net providers. He has conducted extensive research and advised clients with regard to the implementation and development of Medicaid demonstration projects, and has analyzed opportunities for, and helped to implement, Medicaid supplemental payments. Mr. Shankar routinely advises clients on new developments in the Medicaid program, including issues related to Medicaid...

213-972-4584
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