After a long delay in releasing approximately $44 billion from the Provider Relief Fund (PRF) created last year, the Department of Health and Human Services (HHS) began accepting applications for another $25.5 billion as part of PRF Phase 4, which provides relief to healthcare providers that have documented losses in revenue as a result of the COVID-19 pandemic. Providers must also submit reports on how they’ve spent previous PRF allocations. As new challenges arise, HHS and providers alike will benefit from building workflows for complex processes with comprehensive data collection and decision processes to streamline fund distribution and reporting.
HHS Lacks a Strategy for Releasing Billions in Relief Funds to Hospitals and Nursing Homes
According to a July report from the Government Accountability Office, HHS lacks a strategy for distributing unspent PRF money. The report found that HHS has not prioritized providing projected time frames for planned spending of COVID-19 relief funds due to a need to “remain flexible” in responding to emergency requests in an evolving environment. Critics view this as inaction and believe that HHS is not collecting enough comprehensive information to create these timelines. Congress relies on HHS’s ability to provide this information when making funding decisions. The amount of unspent money is also expected to grow as providers continue to return unused Phase 1 funds. Read more about it here.
Relief Funding Struggled to Reach Medically Underserved Communities
To determine PRF allocations, HHS previously relied on financial records and administrative data that prioritized net patient revenue to determine capacity, which skewed allocations in favor of hospitals in privileged areas that serve higher-income and well-insured populations. According to healthcare policy researchers, “the relationship between need and aid should be strengthened by de-emphasizing historical net patient revenue in favor of a broader set of community and hospital characteristics.” To reconcile this, Phase 4 of the Provider Relief Fund offers bonus funds based on the amount of service that hospitals provide to Medicare, Medicaid, and Children’s Health Insurance Program (CHIP) patients, but researchers believe there is more data for HHS to collect and consider. To read more about what they had to say about this, click here.
Hospital Groups are Lobbying for a Delay in PRF Reporting Until Next June
Medical providers are required to report on how they spent the first wave of PRF allocations. Experts expect that this will lead to a wave of tedious audits that create difficulty for providers while increasing tension with policymakers and administrators. Because the White House has changed the rules for how the money must be spent, hospitals are struggling to keep up. HHS has already added a 60-day Grace Period to the original reporting deadline of September 30, 2021. Mark Polston, healthcare consultant, described the frustration that many providers felt in trying to maintain compliance with PRF regulations: “Dollars went out the door and then rules were established after dollars went out.” Read more here.
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