HHS gives providers flexibility on spending COVID-19 relief funds, updates reporting requirements

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The Department of Health and Human Services released new deadlines on when providers can spend COVID-19 relief funds passed under the CARES Act, giving more time if the provider got the money after June 30, 2020. (Getty Images)

The Department of Health and Human Services (HHS) left intact a June 30 deadline for providers to use COVID-19 relief funds they accrued from April 10 through June 30 of 2020 after a major push from hospital groups asking for more time.

But the agency did give more flexibility for providers to spend funding if they got it after June 30, 2020.

The Health Resources and Services Administration (HRSA) released revised reporting requirements Friday for the Provider Relief Fund (PRF), which helped providers offset major revenue shortfalls that emerged due to the COVID-19 pandemic.

“These updated requirements reflect our focus on giving providers equitable amounts of time for use of these funds, maintaining effective safeguards for taxpayer dollars, and incorporating feedback from providers requesting more flexibility and clarity about PRF reporting,” said HRSA acting Administrator Diana Espinosa in a statement.

The agency set up new deadlines for when providers must use funding based on when they got it, rather than the June 30 deadline for all payments to be expended.

Any money a provider received from July 1 through Dec. 31, 2020, must be expended by Dec. 31, 2021.

Providers that got money from Jan. 1, 2021, through June 30, 2021, have until June 30 of next year to fully use it. Any funding received from July 1, 2021, through Dec. 31, 2021, has to be spent by Dec. 31, 2022, according to HRSA.

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The agency made several other key updates to the reporting requirements for the funding, including requiring that nursing homes now report information to HRSA on how they are using the money.

Recipients are also now required to report for each payment received period where they got one or more payments exceeding $10,000. This is a change from $10,000 cumulatively across all PRF payments, HRSA said.

The agency added that reporting requirements don’t apply to the Rural Health Clinic COVID-19 Testing Program nor the HRSA uninsured program or COVID-19 coverage assistance funds.

A reporting portal will be open to providers to submit information starting July 1.

The new reporting requirements come a few days after HHS Secretary Xavier Becerra told a congressional panel that the agency wanted more transparency and accountability in how the taxpayer dollars were used.

The PRF played a major part in stabilizing hospitals and practices that saw revenue plummet at the onset of the pandemic as doctors' offices were forced to close and hospitals shut down or postponed elective procedures.

The CARES Act included $178 billion for the relief fund, and the majority of the fund has been distributed except for roughly $24 billion. Hospital groups have warned that providers need more time to use the funding as they are still suffering the financial consequences from the pandemic, including lower patient volumes.

The American Hospital Association cheered the new guidance that will help "ensure that hospitals and health systems can continue the battle against COVID-19 as cases persist," according to a statement.

The relief fund gave out money to all types of providers but also had targeted distributions to rural and safety net providers as well as to COVID-19 hot spots.