One More Audit - $10,000 or More in Provider Relief Fund Payments | Engage Health Solutions

One More Audit – $10,000 or More in Provider Relief Fund Payments

Earlier this week, the U.S. Department of Health and Human Services (HHS), through the Health Resources and Services Administration (HRSA), announced the distribution of approximately $9 billion in Provider Relief Fund (PRF) Phase 4 payments, from a pool of $17 billion, to health care providers who have experienced revenue losses and expenses related to the COVID-19 pandemic. (Provider Relief Fund Payments ) Phase 4 funding is being distributed based on expenses and decreased revenues from July 1, 2020, to March 31, 2021. The average payment for small providers is $58,000, for medium providers is $289,000, and for large providers is $1.7 million. HRSA is reimbursing a higher percentage of losses and expenses for smaller providers, who typically care for vulnerable populations and historically operate on smaller financial margins.

Pursuant to updated Phase 4 terms and conditions, which recipients are required to sign and acknowledge if they receive PRF payments, HHS is taking steps to ensure relief funds are being used to address the financial impact of COVID-19. According to HHS, examples of appropriate use of funds include recruiting and retaining staff, purchasing masks and other supplies, and modernizing facilities among other COVID-related activities.

If your organization is one of the 69,000 plus providers or suppliers that has or will receive payments from Phase 4 of the Provider Relief Fund, and those payments are for $10,000 or more, you are at increased risk for audit. Specifically, recipients whose payment(s) exceed $10,000 are required to notify HHS of a merger with or acquisition of any other healthcare provider. HHS has indicated that providers who report a merger or acquisition may be more likely to be audited to ensure compliant use of funds. In fact, these providers may be required to submit to audits to ensure their relief funds were used for COVID-19 costs and patient care. This update comes following a New York Times article (Covid Aid to Buy Competitors) published earlier this year, which opined that large hospital chains who received Provider Relief Funds were buying up competitors and doctors’ practices.

HHS has not disclosed how the audit would be conducted or what the ramifications would be if a provider or supplier was determined to have not utilized the PRF payments as anticipated by HHS. At the very least, one can imagine that the payment would need to be returned. What we do not know is whether any fines or other penalties will be assessed, or whether HHS would consider the taking and inappropriate use of the money as a false claim. Only time will tell.

One thing is for sure – if you were part of a merger, were acquired or made an acquisition and received more than $10,000 in PRF payments, be prepared to explain to HHS how those provider relief funds were used.