Significant Provider Relief Fund Updates: Expanded Eligibility and a Reporting Update

As has often been the case throughout this pandemic, the Department of Health and Human Services has continued to work behind the scenes to implement the Provider Relief Fund (PRF) and its many requirements. After a period of relative quiet since the introduction of phase 2 funding, there are now some significant updates to share.

The largest developments relate to the “fix” of the unintended exclusion of certain Medicaid/ Children’s Health Insurance Program (CHIP) heavy providers from eligibility for phase 2 funding as well as some movement and expected future announcements regarding the reporting requirements of the PRF.

Solution for the Medicaid/CHIP Provider Eligibility Issue

On June 9, 2020, HHS announced that it was allocating $15 billion of the $175 billion PRF to Medicaid and CHIP providers who have been affected by the COVID-19 pandemic and did not receive prior funding from the PRF. Although this was good news for many pharmacies, the terms of participation in the phase 2 round of funding created an unintended exclusion for pharmacies that primarily serve Medicaid/CHIP patients.

Pursuant to the terms and conditions then in place, if a pharmacy received a small Medicare relief payment in the phase 1 PRF distribution, that pharmacy was barred from applying for phase 2 funding. At the time, it was believed that HHS would fix this issue by amending the terms and conditions of the phase 2 funding. After a series of seemingly contradictory announcements regarding its plan to fix this issue, HHS has announced its solution.

On August 10, 2020, HHS announced via a series of FAQs and a change to the phase 2 terms and conditions, that health care providers who received prior PRF funds are no longer barred from applying for phase 2 funding.¹ A selection of the relevant and important published FAQs that address many of the questions from providers follows:

Who is eligible for Phase 2 — General Distribution? (Modified 9/1/2020)

To be eligible to apply, the applicant must meet all of the following requirements:

Providers who have received a payment under Phase 1 of the General Distribution are no longer prohibited from submitting an application under Phase 2 of the General Distribution. Providers who received a previous Phase 1 — General Distribution payment are eligible to apply and, if they have not yet received a payment that is approximately 2% of annual revenue from patient care, may receive additional funds.

For providers who are now eligible for the Phase 2 - General Distribution that had received a payment in the Phase 1 - General Distribution, which eligibility, application requirements and portal should applicants use? (Added 8/10/2020)

Providers who received a Phase 1 - General Distribution payment that was less than 2% of revenue from patient care must meet the revised eligibility requirements for the Phase 2 - General Distribution and follow the application instructions available for the distribution. Applicants should use the Provider Relief Fund Application and Attestation Portal to apply for funds.

Is a health care provider that did not deposit a check from the Phase 1 — General Distribution that was subsequently voided after 90 days, eligible to apply for the Phase 2 – General Distribution? (Added 8/10/2020)

Yes. The health care provider is eligible to apply for a Phase 2 — General Distribution payment if it otherwise meets the eligibility criteria and has not yet received a General Distribution payment of approximately 2% of annual revenue from patient care.

Can a healthcare provider that has not billed Medicaid/CHIP during the eligibility window (January 1, 2018 to December 31, 2019), but was enrolled as a Medicaid/CHIP provider prior to 2020, apply for a Phase 2 — General Distribution payment? (Modified 8/10/2020)

Providers who are enrolled in Medicaid and did not receive a Phase 1 — General Distribution payment may apply for a payment through the Provider Relief Fund Application and Attestation Portal as long as they provided diagnoses, testing, or care for individuals with possible or actual cases of COVID-19 after January 31, 2020. HHS broadly views every patient as a possible case of COVID-19. Providers must meet all five eligibility criteria listed in the application guidance in order to be considered for a payment.

Can a healthcare provider that has a primarily Medicaid-focused practice that received a small initial General Distribution payment, but forewent applying for an additional General Distribution payment, now apply for the Phase 2 — General Distribution? (Modified 8/10/2020)

If a healthcare provider was eligible for Phase 1 — General Distribution payment, it is now eligible for a Phase 2 – General Distribution payment if the provider has not yet received a payment that equals approximately 2% of revenue from patient care.

If I rejected my Phase 1 — General Distribution payment, can I apply for a Phase 2 – General Distribution payment? (Modified 8/10/2020)

Yes, if you were eligible for the Phase 1 — General Distribution and rejected the payment, you are now eligible to apply for Phase 2 – General Distribution payment that is approximately 2% of revenue from patient care.

A subsidiary of ours received payments from the Phase 1 — General Distribution, but another subsidiary of ours did not and is a Medicaid provider – can I apply for this Phase 2 – General Distribution? (Modified 8/10/2020)

Yes, if a provider is on the State-provided list of eligible Medicaid and CHIP providers or HHS-created list of dental providers, then they are eligible to apply. Medicaid or CHIP providers who are not on the State-provided list or dental providers who are not on the HHS-created list will undergo additional validation by HHS.

If a provider received a Phase 1 — General Distribution payment and submitted financial information in the Provider Relief Fund Payment Portal, but has not yet received a payment that is approximately 2% of patient care revenue, does the provider need to resubmit its financial information in the Provider Relief Fund Application and Attestation Portal? (Added 8/10/2020)

Yes. The applicant must resubmit its financial information and fill out a new application in the Provider Relief Fund Application and Attestation Portal. Information submitted in the previous Payment Portal will not carry over into the new portal. Additionally, applications will not be considered until all applications submitted for a Phase 1 — General Distribution payment in the Provider Relief Fund Payment Portal have been adjudicated, either by receiving an additional payment or being determined ineligible for a Phase 1 payment.

If a health care provider received a Phase 1 — General Distribution payment, but did not submit its Terms information as required by the Terms and Conditions, which portal should the provider use to now submit its Terms documents? (Added 8/10/2020)

Providers should use the Provider Relief Fund Application and Attestation Portal to submit the required Terms information. Providers will be considered for additional payment if they have not yet received funds that are approximately 2% of revenue from patient care. If a provider does not want additional funds, it may return the funds and reject the attestation within 90 days of receipt. The Application and Attestation Portal will guide providers through the attestation process to reject the funds.

An organization has prescription sales as part of its revenue. Can these sales be captured in the data submitted as a part of revenue from patient care? (Added 9/3/2020)

Generally no. Only patient care revenues from providing health care, services, and supports, as provided in a medical setting, at home, or in the community may be included. Patient care revenues do include savings obtained by providers through enrollment in the 340B Program. HHS is still reviewing potential exceptions to the rule as related to providers who provide unreported health care services as a part of the furnishings of pharmaceuticals.

Provider Relief Fund Reporting Requirements

On July 20, 2020, HHS issued guidance updating the reporting requirements for those who received PRF payments.² Although detailed reporting information is not yet available, a brief summary of key elements from this guidance follows:

• All recipients who received more than $10,000 will be required to submit reports.
• The reporting portal will open October 1, 2020.
• Detailed information regarding the required reports will be issued by HHS on August 17, 2020.
• All recipients will be required to report within 45 days of the end of 2020 (or February 15, 2020).
• Recipients who have used all funds received by December 31, 2020, will be able to submit a single final report detailing use of funds.
• Recipients with unused funds at year end must submit a second and final report by July 31, 2021.

Although the above guidelines provide pharmacies with some expectations on timing, little else is available. Importantly, on August 17, 2020, when additional reporting guidance was expected, HHS posted an update that simply promised that requirements would be posted soon. As of the date this article was written, no guidance has been released.

We also note that the reporting threshold appears to have been changed from the CARES Act amount of $150,000 down to $10,000. At this time, we cannot ascertain whether this was a deliberate change, a typo, or whether there will be different reporting requirements based on amounts received ($10,000 vs. $150,000). Pharmacies can begin to prepare now by ensuring that use of funds received from PPP and PRF is well documented.

References

• HHS.gov. 2020. General Distribution Faqs. [online] Available at: https://www.hhs.gov/coronavirus/cares-act-provider-relief-fund/faqs/general-distribution/index.html#phase2. Accessed 11 September 2020.
• HHS.gov. 2020. [online] Available at: https://www.hhs.gov/sites/default/files/provider-post-payment-notice-of-reporting-requirements.pdf?language=en. Accessed 11 September 2020.

About the Authors

Jeffrey S. Baird, JD, is Chairman of the Health Care Group at Brown & Fortunato, PC, a law firm with a national health care practice based in Texas. He represents pharmacies, infusion companies, HME companies and other health care providers throughout the United States. Mr. Baird is Board Certified in Health Law by the Texas Board of Legal Specialization, and can be reached at (806) 345-6320 or jbaird@bf-law.com.

Kelly T. Custer, JD, is an attorney with the Health Care Group at Brown & Fortunato, PC, a law firm with a national health care practice based in Texas. He represents pharmacies, infusion companies, HME companies and other health care providers throughout the United States. Mr. Custer can be reached at (806) 345-6343 or kcuster@bf-law.com.