Use our timeline to determine your deadline
On Friday, June 11, the U.S. Department of Health and Human Services (HHS) released an update to the reporting requirements for recipients of the Provider Relief Fund (PRF).
This update comes almost five months after the last significant communication from HHS. The new update provides recipients with new deadlines on when they will need to use their funds, their reporting time period window and required information that will need to be reported.
The new deadlines for both the use of the funds and the reporting time period are now based on when the recipient received the funds from the HHS. Use the following table below to determine the appropriate deadlines for your practice:
Most CWA clients received their HHS funds during Period 2. For those practices, this is great news since you now have an additional 6 months to finish using the funds.
This change further delays the reporting timetable. The reporting on the use of funds will not begin until January of 2022. Each recipient will have 90 days to report.
The other benefit to this for clients in Period 2 is we will be able to observe what the reporting looks like and what information is needed prior to completing the reporting in early 2022. Please stay current with our future blog posts on this information.
As a quick refresher, the reporting requirement will involve reporting on three main topics:
- Other Assistance Received – the practice will need to report other stimulus or insurance claims paid because of the COVID pandemic. These amounts include the following:
- Paycheck Protection Program (PPP) loans
- HHS Funds
- Local or state governmental grants
- Business insurance claims
2. Use of the Funds – The use of funds is split broadly into two categories for recipients that received less than $500,000:
- General & Administrative Expense Types
- Insurance (property, malpractice, business insurance)
- Personnel (workforce training, staffing, contractors and overhead employees)
- Fringe Benefits – hazard pay
- Utilities – lighting, cooling and cleaning
- Health-Care Related Expenses
- Supplies – patient care devices, cleaning supplies and office supplies
- Equipment – ventilators and refrigeration system
- Information Technology – telehealth infrastructure, increased bandwidth or teleworking to support remote workforce
- Facilities – leasing or purchasing additional facilities or retrofitting current facilities
3. Lost Revenue – This will apply to funds that are not fully spent on the eligible expenses noted above. The recipient may use a lost revenue calculation. The calculation can be completed based on the actual difference between patient revenue by a quarter during the reporting period.
Based on the HHS guidance to date, CWA does not see any issues with clients being able to use all their HHS funds by the deadline. In limited cases where the client does not have enough qualified expenses, they will be able to fall back on the lost revenue option to justify the entire funded amount.
We believe most clients will have sufficient expenses outside of their PPP covered period for reporting purposes. Additionally, due to the delay in reporting until for Q1 2021 and the ability to use the HHS Funds for most CWA clients until December 31, 2021, we currently see no issues in reporting.
With limited HHS guidance, your CWA financial planning team is here to help you along the way with questions. Stay up to date with the last updates at cainwatters.com/digitalblogs.