January 4, 2021

HHS updated its Provider Relief Fund (PRF) FAQs at the end of 2020 regarding how the payment was calculated for the Phase 3 General Distribution. HHS also addressed questions related to some states’ Medicaid or CHIP agencies directing providers to use PRF dollars before applying Medicaid or CHIP reimbursement.  

Additionally, as previously reported, Congress has allocated additional monies for this fund ($3 billion) in the most recent relief package passed in December 2020. The same bill also requires that 85 percent of currently unobligated funds in the PRF be allocated equitably via applications that consider financial losses and changes in operating expenses, and allows additional flexibility for providers by clarifying that eligible health-care providers may transfer all or any portion of PRF monies among the subsidiary eligible health-care providers of the parent organization. See APMA’s full summary of this package and the previous CARES Act.

Phase 3 General Distribution Calculation and Distribution

Providers will be paid up to 88 percent of their reported losses and net change in their operating expenses from patient care from the first half of 2020. Some applicants will not receive an additional payment either because they experienced no change in revenues or net expenses attributable to COVID-19, or because they have already received funds that equal or exceed reimbursement of 88 percent of reported losses. Providers that have not yet received and kept a payment that is approximately 2 percent of annual revenue from patient care as part of the General Distribution will receive at least that amount as part of their Phase 3 payment.

HHS began issuing Phase 3–General Distribution payments in mid-December 2020, and will continue making payments through the first months of 2021.

State Medicaid and CHIP Reimbursement

HHS has stated it is not permissible for a state Medicaid or CHIP agency to require a provider to use PRF as reimbursement before applying Medicaid or CHIP reimbursement. As related to expenses, providers identify their health-care-related expenses, and then apply any amounts received through other sources (e.g., direct patient billing, commercial insurance, Medicare/Medicaid/CHIP, reimbursement from the Provider Relief Fund COVID-19 Claims Reimbursement to Health Care Providers and Facilities for Testing, Treatment, and Vaccine Administration for the Uninsured, or funds received from FEMA or SBA/Department of Treasury’s Paycheck Protection Program) that offset the health care-related expenses.

PRF payments may be applied to the remaining expenses or cost, after netting the other funds received or obligated to be received which offset those expenses.

To see all of APMA’s PRF resources, visit www.apma.org/ProviderRelief, and see HHS’ resources and guides.

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