HHS Announces $25.5 Billion in COVID-19 Relief Funding for Providers

Today, the U.S. Department of Health and Human Services (HHS) announced it will make available $25.5 billion in additional COVID-19 relief funding. The application portal for the additional funding will open on Sept. 29. Additionally, the agency also announced a 60-day grace period for Reporting Period 1 and provided initial details on the Phase 3 General Distribution reconsideration process.

On Sept. 15 at 1:30 p.m. (PT), HHS will hold a stakeholder briefing about today’s announcement; a summary of the additional funding and distribution follows..

New Distributions

The $25.5 billion consists of $17 billion from the Provider Relief Fund (PRF) through a “Phase 4 General Distribution” and $8.5 billion from the American Rescue Plan (ARP) Rural Relief Fund.

  • Phase 4 General Distribution – $17 billion: Phase 4 payments will be based on providers’ lost revenues and increased expenditures between July 1, 2020, and March 31, 2021. The majority of the allocation — 75% — is calculated based on revenue losses and COVID-19-related expenses. No provider will receive a Phase 4 payment that exceeds 100% of their losses and expenses. Large providers will receive a minimum payment amount that is based on a percentage of their lost revenues and expenses. Medium and small providers will receive a base payment plus a supplement. To ensure an equitable distribution of payments, HHS will determine the amount of base and supplemental payments after reviewing all applications. The remaining 25% of this allocation will be used for bonus payments to providers based on the amount and type of services delivered to Medicaid, Children’s Health Insurance Program (CHIP), and Medicare patients. Providers who serve any patients living in Federal Office of Rural Health Policy (FORHP)-defined rural areas and who meet the eligibility criteria will receive a minimum payment.
  • ARP Rural Distribution $8.5 billion: Providers who serve Medicaid, CHIP, and Medicare patients who live in rural communities, as defined by FORHP, are eligible for this distribution.  Payments will be based on the amount and type of services provided to rural patients.

Application Process

The Health Resources and Services Administration (HRSA) will use a single application for both the Phase 4 General and ARP Rural Distributions. Existing Medicaid, CHIP, and Medicare claims data will be used to calculate the relevant portions of each payment. HRSA encourages providers to prepare for the upcoming application process by:

  • Using the Rural Health Grants Eligibility Analyzer to see what areas qualify as “rural” for the ARP Rural Distribution
  • Collecting tax documents and financial statements for calendar quarters three and four of 2020 and the first quarter of 2021  

Reporting Period 1 Grace Period

In response to the current COVID-19 surge and ongoing natural disasters, HHS is providing a 60-day grace period for Reporting Period 1. While providers who do not meet the Sept. 30, 2021, deadline will not be considered in compliance with requirements, enforcement actions such as recoupment will not be initiated during the grace period (Oct. 1–Nov. 30, 2021). HHS clarifies that, even though it is providing a grace period for reporting, the June 30, 2021, deadline to use the funds covered in Reporting Period 1 has not changed.

Phase 3 General Distribution Reconsideration Process

HHS has also released the methodology it used to determine Phase 3 General Distribution payments. The announcement instructs providers to contact [email protected] if they believe, after reviewing the methodology, that their Phase 3 General Distribution payment was calculated incorrectly. The announcement states that further details about the reconsideration process are forthcoming.

CHA will provide additional information about the application process, the Reporting Period 1 grace period, and the Phase 3 Distribution reconsideration process as it becomes available.