Provider Relief Fund Reporting and Funding Clawbacks
The Federal Provider Relief Fund (PRF), authorized under the CARES Act, awarded billions of dollars of support to health care providers designed to offset the impact of the COVID-19 pandemic. These funds were not to be repaid, but awards were conditioned on reporting from each provider. Several waves of PRF funding have been distributed, most having been deposited directly in provider accounts. Notices of reporting requirements were mostly sent to provider email addresses, and some were reported to be lost in spam folders.
The legislation that authorizes the PRF requires that funds be used for COVID-related revenue loss and expenses. “Providers must report on how they used their funds to demonstrate they complied with the law and the terms and conditions of their payment,” HRSA said in a statement. That requirement “has been in place since the beginning of the program.”
Funding recipients had to agree to HRSA’s terms and conditions:
which say that providers need to “submit reports as the Secretary determines are needed to ensure compliance with conditions that are imposed on this Payment.” It should be noted that providers could still get PRF funds without signing off on the terms and conditions, since the HHS said it deemed them to have accepted the terms if they kept it.
For the first round of PRF award recipients, if more than $10,000 were received, they were required to report how the funds were spent by Sept. 30, 2021:
Significant numbers of first round award recipients did not report appropriately. After requests from a number of provider associations, DHHS created a process by which providers could request an extension of the reporting deadlines. There was a narrow window for these requests, which ended on April 22, 2022. Reasons for reporting deadline extension were also limited.
DHHS has initiated efforts to reclaim awards from providers who failed to report.
It is estimated that $100 million in ‘clawbacks’ are possible. Providers at risk received notices of noncompliance in March, and had until April 10 to comply or repay their awards, subject to approved requests for extension. It should be noted that:
“HHS reserves the right to administer penalties for non-compliance. Providers subject to enforcement actions whose organizations do not come into compliance by returning funds will be excluded from receiving and/or retaining future PRF payments – including any applicable Phase 4 payments.”
Similar clawbacks are possible in the future for providers who received funds in later funding rounds and fail to comply with reporting requirements.
There is little or no data available about which providers may be out of compliance in their PRF reporting. Similarly, we haven’t been able to secure a list of providers who have been notified about funding clawbacks. It is also uncertain which providers, funded in subsequent PRF rounds, might be out of compliance with future reporting requirements. It is likely that a significant number of rural providers may be affected.
SORHs might consider a quick survey of CAHs, SHIP hospital, RHC and key other rural providers to assess the impact of this enforcement on the rural health system in their states. It should be noted that HRSA has been active in working with RHCs and FQHCs to ensure that they meet all reporting requirements. It is unclear to me how much effort was extended to CAHs and rural hospitals.