The Department of Health and Human Services (HHS) has announced plans to distribute $25.5 billion in funding under Phase 4 of the Provider Relief Fund program. The upcoming phase is divided into two portions with $8.5 billion allocated towards rural providers with the remaining portion, $17 billion, broadly available to providers who can document revenue loss and expenses associated with the pandemic.
Beginning September 29th, providers may apply for the Phase 4 distribution. HHS will use a single application for both the rural and general allocations of the Phase as well as existing Medicaid/CHIP and Medicare claims data in calculating portions of the payments.
More information on applying for this phase is expected to be announced in the upcoming weeks. ADVOCATE will continue to monitor this and will publish additional details as they become available. In the meantime, more information on this upcoming distribution is expected to be available on the PRF website here: https://www.hrsa.gov/provider-relief
General Phase 4 payments will be based on lost revenues and increased expenditures between July 1, 2020, and March 31, 2021. HHS has also stated that this phase will include new calculation elements to reimburse smaller providers for lost revenues at a higher rate compared to larger providers. Bonus payments based on the volume of services furnished to Medicare/Medicaid/CHIP beneficiaries will also be awarded. The $17 billion dollars will be divided in the following way:
- 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, with small providers receiving the highest supplement.
- HHS did not include the definition of ‘small’, ‘medium’, or ‘large’ providers with their announcement.
- HHS will determine the exact amount of the base payments and supplements after analyzing data from all the 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 be put towards bonus payments that are based on the amount and type of services provided to Medicaid, CHIP, and Medicare patients.
- HHS will price Medicaid and CHIP claims data at Medicare rates, with some limited exceptions for some services provided predominantly in Medicaid and CHIP.
- 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, will receive a minimum payment.
Rural Phase 4 payments, also known as ARP Rural payments, will be allocated to providers who serve Medicaid, CHIP, and Medicare patients who live in qualifying rural communities. These payments will be based on the number of services provided to Medicare/Medicaid/CHIP beneficiaries. Eligibility can be checked using the Rural Health Grants Eligibility Analyzer here: https://data.hrsa.gov/tools/rural-health?tab=Address
As a reminder, recipients of Provider Relief Funds are required to report on the use of funds as part of the terms and conditions of retaining the payment. The first deadline to complete reporting on the first phase of PRF distributions is upcoming on September 30th. More details on PRF reporting and a grace period for providers facing Covid surges and natural disasters are available here: https://www.hrsa.gov/provider-relief/reporting-auditing
As always, ADVOCATE will continue to keep you informed on the issues impacting medical groups as they develop.
Kayley Jaquet
Manager, Regulatory Affairs