HRSA Releases Updates for Phase 4 PRF Funds & Rural Distribution

• By: Angela Westhoff
• On: 09/16/2021 10:19:15
• In: Legislative/Government Affairs

Earlier this week, the Health Resources and Services Administration (HRSA) released additional details on the Provider Relief Fund (PRF) including $17 Billion in Phase 4 and $8.5 billion in rural distribution. The portal to apply for funding will open on September 29^th. Providers are encouraged to apply early. Both the general distribution and the rural distribution will be included in a single application process.

The Administration provided additional details on the size and parameters for awards, eligibility, and use. Phase 4 will be aimed at reimbursing providers for lost revenues and expenses related to COVID-19 based on Q3-4 of 2020 and Q1 of 2021.  Phase 4 is open to all providers, including new providers – “any provider or supplier of health care, services, and support in a medical setting, at home, or in the community” is eligible to apply.  Unlike the rural portion of funds, providers will not be excluded based on geography.  A list of eligible providers is available here, and it includes assisted living facilities, nursing homes and skilled nursing facilities, home health agencies, etc.

Methodology:

HRSA made clear that the new methodology implemented in this distribution is intended to support the Administration's broader goals around health equity:

• More generous for smaller providers – the new methodology is intended to better support smaller providers. Specifically, HHS indicates its goals for the distribution is “reimbursing smaller providers….at a higher rate compared to larger providers.” HRSA is defining “small, medium and large” providers by the volume of Medicaid and Medicare patients served during the performance period.  Additional details on these delineations will be provided by HRSA next week. 
• Bonus payments based on services to Medicaid/Medicare payments – the methodology is also intended to reward those providers serving Medicare and Medicaid patients at a higher rate (vs. commercially insured).

HRSA also views Phase 4 as two allocations and Phase 4 awards will be calculated based on two different methodologies:

• 75% calculated based on revenue losses and COVID-related expenses ($12.75 billion).
• 25% put towards bonus payments that are based on the amount and type of service provided to Medicaid, CHIP, and Medicare patients ($4.25 billion).

What Can Providers Do to Prepare for the Upcoming Application Process?

• Providers should search the Rural Health Grants Eligibility Analyzer to see what areas qualify for “rural” for the ARPA rural payments.
• HRSA advises provides to gather supporting documentation like most recent tax documents and financial statements for the second half of calendar year 2020 and the first quarter of 2021.

Timeline:

• The application portal will open on September 29. The portal will remain open for four weeks, or until November 20.
• HRSA anticipates releasing Rural Distribution awards by mid-November and Phase 4 distribution awards by mid-December.

Phase 3 Reconsiderations:

To promote transparency in the PRF program, HHS has released detailed information about the methodology utilized to calculate Phase 3 payments. Providers who believe their Phase 3 payment was not calculated correctly according to this methodology will now have an opportunity to request a reconsideration. Further details on this Phase 3 reconsideration process are forthcoming.

For more information contact Angela Westhoff at awesthoff@mehca.org