Confusion and uncertainty are clouding the landscape as nursing properties across the country start reporting shed revenues and COVID-19 connected expenditures that would let them to preserve their share of federal Supplier Reduction Cash.
All healthcare vendors that acquired PRF help in between April 10, 2020, and June 30, 2020, should file a report through the devoted Well being Assets and Companies Administration portal by Sept. 30, 2021. Involved in that $46.02 billion Section 1 distribution was about $2.7 billion for all skilled nursing operators participating in Medicare, according to the American Overall health Treatment Affiliation.
But auditors and advocates claimed last week that a lot of providers that are now making an attempt to document how they employed that substantially-needed money infusion continue being perplexed by continuously evolving steering — and that could finally guide to audit trouble.
One particular of the biggest challenges? Federal steerage does not explicitly need suppliers to define their fees, but not carrying out so may possibly backfire even for health care vendors who experienced incredible earnings losses due to declining patient quantity.
“This is where by matters sort of go off the rails,” warned attorney Brian Lee, a senior associate with Alston & Bird’s Washington, D.C. office. “You have to go by way of the expenditure work out initial. That is not to say you simply cannot put a zero for every single quarter and just go straight to lost revenues. But I really do not assume which is one thing we’d suggest. You most likely want to clearly show a small bit of a fantastic-faith work to document the bills associated to the coronavirus right before you then go to your dropped-revenue examination.”
Costs make a difference
Lee reiterated that the Department of Health and fitness and Human Companies intends the fund to include any “expenses that were to stop, get ready for or reply to coronavirus.” That could involve items like particular protecting products, salaries and hazard pay back and other precautionary measures, even for suppliers who never really treated a COVID-positive affected individual.
“For several men and women, that ought to fall you down to zero,” Lee extra, noting that if fees never exceed the volume of the supplier reduction issued in that interval, the remaining funds can be utilized to offset shed revenues.
Lee and Frank Miceli, CPA, an audit spouse who specializes in the health care and nonprofit sectors for Marcum LLP, offered a webinar on PRF reporting challenges July 14. Miceli underscored that in current steerage, HHS has indicated it needs to see a “good religion effort” to report costs.
“Furthermore, if you have received distributions from other tranches of revenue, I would want to load it up as substantially as I could to increase my reimbursement and make there be no doubt that you have used it all,” Miceli additional.
Supplier aid dollars and other coronavirus relief applications, these as point out stimulus or funding from the Federal Unexpected emergency Administration Agency, can not be used versus the identical expenditures. In addition, providers receiving a lot more than $750,000 in federal funding on a yearly basis need to also file a single audit for compliance applications.
Provider Aid Cash issued in the very first section had to be put in by June 30, 2021. The reporting window opened the subsequent working day. Suppliers will be expected to report money dispersed in later on phases, like some segments specified specially for proficient nursing vendors, for the duration of separate reporting intervals.
How to rely your losses
In this 1st spherical, calculating losses could also journey up suppliers, Lee and Miceli claimed.
Vendors can use three different solutions to exhibit that their revenues dipped due to COVID-19. In the very first, they can look at actual revenues from 2019 to revenues from 2020. In the next, they can review real revenues to finances revenues for 2020, if that funds was accepted before March 27, 2020.
In the third, suppliers can use ‘any fair method’ to justify decreased revenues, but they ought to be prepared to defend that calculation to HHS.
“As a warning, applying that ‘any reasonable method’ solution would be a single of these flags (where) you set off added scrutiny,” Lee mentioned.
Nicole Fallon, vice president of health and fitness policy and built-in providers for LeadingAge, echoed Lee’s problem in the course of a July 15 webinar with the organization’s customers. She stated suppliers who employed their own approach would be at “higher threat for audit.”
Fallon also famous that HRSA could reject a self-produced revenue decline justification with no denying the validity of the complete report. Rather, suppliers will be provided an supplemental 30 times to finish loss accounting using one particular of the two other options.
Considering the fact that previous September, there have been far more than 20 FAQ updates to the prepared procedures for company relief reporting. But even if more clarification arrives, suppliers should really be prepared to comply this time about.
“The speed at which matters have been switching has necessary very near monitoring,” Lee claimed. “We now feel like at minimum from the standpoint of the framework, what HRSA is necessitating, with the timing, the deadlines, as significantly as we can tell, we are remaining.”
HRSA will host a recorded technical help session on PRF for recipients on July 20 at 3 p.m. ET.