On September 10, 2021, the Administration announced that the U.S. Department of Health and Human Services (HHS), through the Health Resources and Services Administration (HRSA), is making $25.5 billion in new funding available for health care providers affected by the COVID-19 pandemic. This includes $17 billion for the Provider Relief Fund (PRF; Phase 4), for a broad range of providers who can document revenue loss and expenses associated with the pandemic, and an additional $8.5 billion in American Rescue Plan (ARP) resources for providers who serve rural Medicaid, Children's Health Insurance Program (CHIP), or Medicare patients
Providers can begin to apply for these funds on September 29, 2021. Providers will apply for both programs in a single application and HRSA will use existing Medicaid/CHIP and Medicare claims data in calculating portions of these payments.
General PRF Distribution (Phase 4)
Distribution of the $17 billion from the PRF will be based on providers’ lost revenues and changes in operating expenses from July 1, 2020 to March 31, 2021. HRSA will reimburse a higher percentage of lost revenues and expenses for smaller providers as compared to larger providers and provide "bonus" payments based on the amount of services provided to Medicaid, CHIP, and Medicare patients, priced at the generally higher Medicare rates.
Three quarters (75%) of the funding 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 will determine the exact amount of the base payments and supplements after analyzing data from all the applications received to ensure the agency stays within its budget and funds are distributed equitably. No provider will receive a Phase 4 payment that exceeds 100% of their losses and expenses.
One quarter (25%) of the funding 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.
ARP Distribution for Rural Providers
Distribution of the $8.5 billion from the ARP will be based on the amount of services providers furnish to Medicaid, CHIP, and Medicare beneficiaries living in federally defined rural areas. HRSA will price payments at the generally higher Medicare rates for Medicaid and CHIP beneficiaries.
This distribution is intended to help address the disproportionate impact that COVID-19 has had on rural communities and rural health care providers, so funding will be available to providers who serve patients in these communities. Eligible providers can simultaneously be considered for both the latest PRF and ARP payments, and eligible applicants can apply through the same Application and Attestation Portal. Funds for both PRF and ARP recipients will also be administered jointly.
The Rural Health Grants Eligibility Analyzer indicates which areas qualify as "rural" for these ARP payments.
Phase 3 PRF Reconsiderations
HHS has released detailed information about the methodology used to calculate Phase 3 PRF payments. Providers who believe their Phase 3 payment was not calculated correctly according to this methodology will now have an opportunity to have their request reconsidered. Further details on this process are forthcoming.
60-Day Grace Period for PRF Reporting
HHS also announced a final 60-day grace period to help providers come into compliance with their PRF reporting requirements if they fail to meet the deadline on September 30, 2021, for the first PRF Reporting Time Period. While the deadline to use funds and the Reporting Time Period will not change, HHS will not initiate collection activities or similar enforcement actions for noncompliant providers during this grace period.
Visit the future payments page on HRSA’s website for more information on applying for the latest funding from the PRF and ARP.
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