HHS Provides More Details on Phase 4 and Rural Provider Relief Fund Distribution

As previously reported by the AAA, the Department of Health and Human Services (HHS) has announced that it will open on September 29, Phase 4 of the Provider Relief Fund (PRF) to allocate $17 billion dollars for COVID-19 relief. In addition, it will provide $8.5 billion specifically for rural providers. On September 15, HHS held a stakeholder call on the PRF in which the agency provided more details on the distribution.

The application process will remain open for 4 weeks. Providers will be able to use the funding through December 31, 2022.  The Administration’s goal is to release the rural funds before Thanksgiving and the Phase four funds by mid-December 2021. The agency indicated it has additional funding it is holding back to reimburse for the uncompensated care fund for which providers and suppliers can still apply.

The AAA has been advocating relentlessly for the Administration to open a fourth phase of funding and support rural providers and suppliers.  As described below, these phases of funding will rely upon data from Medicare, Medicaid, and the State Children’s Health Insurance Program (CHIP).  It is important that all AAA members who qualify not only submit applications, but also make sure that you have appropriately submitted claims to these programs, including when allowed, claims under the ground ambulance treatment in place waiver. We strongly recommend that all AAA members apply for funding.

Phase 4 Funding

The Phase 4 PRF methodology and application will primarily follow the same rules set forth for Phase 3.  It will apply for Q2 2020 through Q1 2021.  The funding will be available for the same broad set of providers and suppliers that were eligible under Phase 3.

Phase 4 will have two components.  The Acting Administrator of HRSA has explained that 75 percent of the funding for Phase 4 will be determined based on a provider’s lost revenues and expenses that the provider submits through the application process.  HRSA will calculate the amount awarded based on the number of applications received.  However, it will establish a base for all providers and then adjust that base up for medium and small providers who have lower volumes over which to spread their costs.  The determination of provider size will be based on patient revenues.

The second component of Phase 4 funding will allocate 25 percent for bonus payments to providers serving Medicare, Medicaid, and CHIP patients.  The final amounts awarded will be determined based on the volume of services provided to these patient populations.

The Acting Administrator also noted that once again providers who have higher values compared to their peer group will be flagged and may have the amount they receive capped or may not receive any funding.  There will be a reconsideration process for these providers as well.

Rural Funding

In addition to Phase 4, HRSA will provide rural-specific relief to providers and suppliers serving rural patients.  The determination of whether a provider qualifies will be based on the patient’s location, not that of the providers.  HRSA will use Medicare, Medicaid, and CHIP data to calculate the payment, so the application process will be simplified and providers required to submit less information.  The amounts will be determine based on the number of patients served and the number of applicants.

Additional Relief

The Acting Administrator also indicated that HRSA will provide a 60-day grace period for those providers who received funds already and are required to report if they cannot meet the current reporting deadline.  She also noted that HRSA is establishing a reconsideration process for Phase 3 as well.  Details will be available on the HRSA website.

Additional Information

HRSA will be posting information on its website.  It will also host two webinars on September 30 and October 5 to provide more information about how providers can apply to these programs.

COVID-19, Department of Health and Human Services (HHS), Medicaid, Medicare, Provider Relief Fund