Yesterday (October 1, 2020), the U.S. Department of Health and Human Services (HHS) announced a new Phase 3 General Distribution of $20 billion for health care providers from the Provider Relief Fund (PRF). Providers will have from October 5, 2020, through November 6, 2020, to apply for the additional funding.

Who Is Eligible?

Eligibility for Phase 3 distributions is being broadened by HHS to encompass a large number of health care providers, including the following:

• Providers who previously received, rejected, or accepted a General Distribution PRF payment, even if they have already received payments of approximately 2% of annual revenue from patient care
  • Remember, frequently asked questions previously made available by HHS have advised that this is calculated as 2% of a provider’s annual gross revenue for the most recently completed federal income tax year.

• Behavioral health providers, including those that previously received funding and new providers

• Health care providers that began practicing January 1, 2020, through March 31, 2020, including Medicare, Medicaid, CHIP, dentists, assisted living facilities, and behavioral health providers

How Are Payments Calculated?

• Provider submissions will be reviewed to confirm that they have received a PRF payment equal to approximately 2% of patient care revenue from prior general distributions. 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 of the $20 billion budget, equitable add-on payments will be calculated that consider the following:
  • 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 PRF distributions

HHS is urging early application, and it is warning providers not to wait until the last day or week of the application period. HHS advised, “Applying early will help to expedite HHS’ review process and payment calculations, and ultimately accelerate the distribution of all payments.”

All Phase 3 payment recipients will be required to attest to receiving payment and accept associated Terms and Conditions. HHS recently released detailed reporting requirements for PRF payments, which will no doubt apply to Phase 3 payments as well.

HHS will continue to host webinars to assist providers through the application process, and our team will continue to help provide clarity and guidance for our clients.