HHS Announces $20 Billion Phase 3 of Provider Relief Funds

On October 1, 2020, the U.S. HHS announced a $20 billion Phase 3 of the Provider Relief Funds.

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On October 1, 2020, the U.S. HHS announced a $20 billion Phase 3 of the Provider Relief Funds.

On October 1, 2020, the U.S. Department of Health and Human Services (HHS) announced a $20 billion Phase 3 of the Provider Relief Funds (PRF).  For skilled nursing facilities that are continuing to spend significant amounts to manage current cases and/or prevent the coronavirus from entering their facility, this was welcome news.

Key Differences Between Phase 3 and the Previous Rounds of PRF Funding

  • HHS will not be auto-distributing Phase 3 payments to providers. Providers must apply for payments via the HHS website.
  • The distributions will follow a two-tier process. Priority will be given to providers that did not, to date, receive PRF payments totaling 2 percent of patient care revenue.  Such providers who apply are eligible to increase their cumulative grant payments to that 2 percent level.
  • Once such amounts have been subtracted from the indicated $20 billion, providers who apply will be eligible for an “add-on” payment based on the following three criteria (per HHS website):
    • 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 Provider Relief Fund distributions.
  • The application period runs from Monday October 5 to Friday November 6, 2020.
  • Based on the applications received, HHS will then calculate the Phase 3 distribution amount for each provider. HHS is encouraging early applications so they can perform their calculation as soon as possible. They have not indicated the quantity of applications they need to receive in order to begin the calculation process.

Similar to the Phase 1 distributions to providers in Spring 2020, the Phase 3 amounts can be utilized for health care related expenses or lost revenues that are attributable to coronavirus.  Phase 3, consistent with previous PRF distributions, also does not allow coverage for expenses or lost revenues (as defined in the September 10, 2020 notice of reporting requirements) that have been or will be covered by another source.

Consistent with prior general distributions, the deadline for the use of Phase 3 PRF amounts is June 30, 2021 with final reporting due by July 31, 2021.

If you have any questions or would like further information please contact us on our website or reach out to your blum team member.

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