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HHS Releases Long-Awaited CARES Act Provider Relief Fund Reporting Requirements: What it Means for Recipients

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HHS has finalized the CARES Act provider reporting and recoupment rules and they are different from those put forth in the proposed form. Providers should take careful note — the new requirements are significant and detailed.

On September 19, 2020, the US Department of Health and Human Services (HHS) issued General and Targeted Distribution Post-Payment Notice of Reporting Requirements, which included long-awaited reporting requirements for Provider Relief Fund (PRF) recipients who received one or more payments exceeding $10,000 in the aggregate.

In addition to informing recipients of the categories of data elements that recipients must submit for calendar years 2019 and 2020, notably the notice set forth (i) how PRF payments may be allocated to expenses and lost revenues and (ii) how lost revenues must be calculated. Provider Relief Fund recipients who fail to meet reporting requirements or whose lost revenue and increased expenses do not exceed the amount of Provider Relief funding received, may be subject to recoupment of funds by HHS. Summarized below are relevant guidance regarding the current reporting requirements, HHS’s right to recoup PRF payments, and the current lost revenue calculation, which represents a shift from prior guidance.

Requirement to Report and HHS’s Right to Recoup

HHS issued the notice: General and Targeted Distribution Post-Payment Notice of Reporting Requirements, dated September 19, 2020 (the “HHS September Notice”) as a supporting document to the July 20, 2020 Post-Payment Notice of Reporting Requirements, which was further revised on August 14, 2020 (all, the “PRF Notices”). Beyond the PRF Notices and language contained in any application forms, the sole guidance HHS has provided with respect to the calculation of lost revenue and the appropriate use of PRF funds is in the form of published responses to FAQs.

Whether or not a provider recipient of distributions from the Provider Relief Fund may have those distributions recouped by HHS will depend on the provider’s completion of reporting/audit requirements and use of PRF amounts. All providers who retained PRF payments were required to attest to and accept the Terms and Conditions associated with each payment distribution.

Relevant Terms and Conditions Associated with Use of PRF Distributions

HHS previously noted its intention to issue additional reporting requirements. By attesting to the Terms of Conditions, providers agreed to adhere to those reporting requirements once issued, and should note the additional detail contained in the HHS September Notice. Terms and Conditions associated with use of the funds state that noncompliance with the Terms and Conditions is considered grounds for the HHS Secretary to recoup some or all of the funds.

The funds may only be used to (i) prevent, prepare for, and respond to coronavirus, and (ii) reimburse the recipient for any health care related expenses or lost revenues that are attributable to coronavirus. The recipient must submit reports as the Secretary determines are needed to ensure compliance. In addition, the recipient must maintain appropriate records and cost documentation as set forth in the Terms and Conditions and submit copies of such records upon request. No later than 10 days after the end of each calendar quarter, any recipient must submit to the Secretary and the Pandemic Response Accountability Committee a report, including, among other figures, the total amount of funds received from HHS and amount of funds received that were expended or obligated for each project or activity.

Current Reporting Requirements

The required reported data points as set forth in the HHS September Notice include:

  • General Demographic Information
  • Expenses Attributable to Coronavirus Not Reimbursed by Other Sources (2020 Only)
  • Lost Revenues Attributable to Coronavirus (2019 and 2020)
  • Additional Non-financial Data, such as personnel, patient, and facility metrics (per quarter)

For expenses attributable to coronavirus, reporting entities that received between $10,000 and $499,999 in aggregated PRF payments must report expenses in two aggregated categories: (1) general and administrative expenses, and (2) other health care-related expenses. Reporting entities that received $500,000 or more in PRF payments must report expenses in the same categories, but must also provide more detail in sub-categories of expenses including, but not limited to, costs for mortgage/rent, personnel, and supplies.

Lost Revenue Calculation

The HHS September Notice provides a more stringent framework for the calculation of lost revenue and the application of PRF payments to the lost revenue calculation. Prior HHS guidance did not provide detailed guidance regarding the calculation. Rather, HHS issued a FAQ response stating that lost revenue may be calculated using “any reasonable method.” Further, a June 19, 2020 CARES Act Provider Relief Fund FAQ stated that lost revenue estimates should be based on budget-to-actual or year-over-year calculations and should include revenue from all sources that may be attributed to COVID-19.

Pursuant to the HHS September Notice, PRF payment amounts may be applied to healthcare-related expenses that are attributable to coronavirus (the “COVID Health Expenses”) or lost revenue. PRF payment amounts are first applied to COVID Health Expenses. If funds remain after covering COVID Health Expenses, the remaining PRF payment amounts may be applied to lost revenue. Lost revenue is specifically defined in the notice as a negative change in year-over-year net patient care operating income. In addition, HHS caps the application of PRF payments toward lost revenues up to either: (i) the amount of a provider’s 2019 net gain from healthcare related sources, or (ii) up to a net zero gain/loss in 2020, provided that the provider reported negative net operating income in 2019.

Excess Provider Relief Funding

HHS does not intend to recoup funds as long as a provider’s lost revenue and increased expenses exceed the amount of Provider Relief funding a provider has received. HHS reserves the right to audit PRF recipients in the future to ensure that this requirement is met and to collect any payments that were made in error, or that exceed lost revenue or increased expenses due to COVID-19. Failure to comply with the Terms and Conditions may be grounds for recoupment. The HHS September Notice states that if providers do not expend PRF funds in full by the end of calendar year 2020, those providers will have an additional six months in which to apply the remaining amounts toward expenses attributable to coronavirus but that are not reimbursed by other sources, or to apply toward lost revenues in an amount not to exceed the 2019 net gain. Any excess funds remaining at that point would be recoupable. HHS has not, however, set forth the parameters for recoupment at this time.

What this Means for PRF Recipients

The reporting system through which PRF recipients will submit reports is expected to become available in early 2021, according to HHS. The prior target date was October 1, 2020. Providers should be aware of certain deadlines on the horizon related to the PRF reporting requirements. Once the reporting system becomes available, PRF recipients will submit an initial report indicating their use of 2020 funds. If providers do not use PRF money by December 31, 2020, thereafter they will have 6 months (until June 30, 2021) to expend excess funds. Such providers must then submit a second and final report no later than July 31, 2021, that includes patient care related revenue amounts earned January 1–June 30, 2021.

The Health Resources and Services Administration (“HRSA”) notes that it plans to offer Question & Answer Sessions via webinar in advance of the reporting deadline, and as needed, HRSA will also issue FAQs to aid in the reporting process.


Please note that the reporting requirements set forth in the HHS September Notice do not apply to the Nursing Home Infection Control distribution, Rural Health Clinic Testing distribution, or reimbursement from the HRSA Uninsured Program. Separate reporting requirements may be announced for these distributions.

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