HEALTHCARE AT HOME:
THE  ROWAN TECHNOLOGY REPORT

Serving the home health, home care and hospice industry since 1999.

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by Darcey Trescone

On September 19, HHS issued its overdue reporting requirements guidance to healthcare providers that received CARES Act Designated Provider Relief Fund (PRF) payments last Spring. Originally due to be released by August 17, the guidance includes some surprising last-minute changes, including several new definitions related to allowable uses of the PRF payments.

This new notice to PRF recipients may leave some healthcare providers surprised to find they owe some, if not all, of their payments back to HHS.

The PRF payments have always been designated for additional healthcare-related expenses and lost revenues attributable to the coronavirus. At first blush, the definitions of such items in the new reporting guidance come with some unexpected changes. First, attributable healthcare-related expenses are defined as COVID-related expenses that another source has not reimbursed or is not obligated to repay.

According to BKD Partner Mark Sharp, "This means you can only count expenses incurred over and above what has been reimbursed by other sources, which, by the new definition, includes all patient revenues. The netting out of the reimbursement by other sources was known to contain other COVID-related funding sources like the Paycheck Protection Program loan, as one example, but not routine patient revenues."

In effect, a provider will not get to count any COVID-related expenses to the extent it has net operating income.

Second, lost revenues attributable to the coronavirus are defined as a negative change in year-over-year (2019 versus 2020) net patient care operating income. Net patient care operating income is further defined as patient care revenue, less patient care related expenses, which is basically your net profit for the business.

What does all this mean?

A health care provider cannot use the PRF payments to create an operating profit larger than any operating profit in 2019. When you combine the new definitions for both the attributable expense and lost revenue, many providers may owe a substantial amount of their PRF payments back to HHS. Any who built a repayment schedule based on the previous rule interpretation may not have been planning for that type of repayment.

Another surprise in the September 19 notice was the reporting requirement for all PRF recipients with total PRF payment amounts of $10,000 or above. Prior guidance suggested that formal reporting would only be required for recipients of $150,000 or above.

There is one positive note. The new guidance grants healthcare organizations six additional months after 2020 to use the PRF payments under the latest definitions.

All health care providers will need access to quality data from both their accounting and EMR solutions to provide accurate reporting to HHS for the PRF payments. In addition to revenue and expense information required in HHS reporting, providers are encouraged to submit other meaningful metrics to support their expenses and lost revenues attributable to the coronavirus. Such metrics could include indicators related to personnel, patients, and facilities. All data is requested to be provided on a quarterly level of detail.

Further details on the September 19 guidance can be found here.

Webinars and FAQs are to be issued by HHS in the coming months.

 

Darcey Trescone

Darcey Trescone is a Healthcare IS and Business Development Consultant in the Post-Acute Healthcare Market with a strong background working with both providers and vendors specific to Home Care and Hospice. She has worked as a home health nurse and held senior operational, product management and business development positions with various post-acute software firms, where her responsibilities included new and existing market penetration, customer retention and oversight of teams across the U.S., Canada and Australia. She can be reached at darcey@tresconeconsulting.com.

 

©2020 by Rowan Consulting Associates, Inc., Colorado Springs, CO. All rights reserved. This article originally appeared in Home Care Technology: The Rowan Report. homecaretechreport.com One copy may be printed for personal use; further reproduction by permission only. editor@homecaretechreport.com