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Category: CARES


Reminder: Register here to participate in Toyon’s open CARES PRF webinar Wednesday 9/15 at 10 AM PDT





New $25.5 billion in PRF

Re-Determination for PRF Phase 3 Eligibility

Grace Period through November 30 for PRF Period 1 Reporting

1. New $25.5 billion in PRF
Last Friday, HHS announced $25.5 billion in PRF to eligible healthcare providers. The $25.5 billion is split between $17 billion in Phase 4 payments and $8.5 billion in payments to Rural Medicaid providers. The application portal will open on September 29, 2021.   
HHS established a Future Payments Webpage with further information on the application and payment methodologies. Providers will apply for both Phase 4 and Rural payments in a single application. HHS recommends providers gather supporting documentation, such as most recent tax documents and financial statements for the second half of calendar year (CY) 2020 and the first quarter of CY 2021 in preparation to file the application for this funding.
Phase 4 $17 billion: Approximately $12.75 billion (75%) is based on revenue losses and COVID-related expenses. HHS will determine the exact amount after analyzing all applications. No provider will receive a Phase 4 payment that exceeds 100% of their losses and expenses. This funding will:
  • Be based on lost revenues and expenditures between July 1, 2020, and March 31, 2021.  
  • Reimburse large providers a minimum payment based on a percentage of their lost revenues and COVID-related expenses.
  • Fund medium and small providers with a base payment plus a supplement, with small providers receiving the highest supplement.
The remaining ~$4.25 billion (25%) will be allocated as bonus payments based on the amount and type of services provided to Medicaid, CHIP, and Medicare patients. Providers who meet the eligibility (application) criteria will be reimbursed:
  • Based on an HHS calculation pricing Medicaid and CHIP claims data at Medicare rates [1].
  • A minimum payment for providers serving any patients living in Federal Office of Rural Health Policy-defined rural areas with Medicaid, CHIP, or Medicare coverage. HRSA’s tool at Rural Health Grants Eligibility Analyzer provides insight into qualifying rural areas. 
Rural PRF $8.5 billion: HHS is also preparing to disperse $8.5 billion in payments to rural providers from the American Rescue Plan (ARP). Rural payments will be based on the amount of Medicaid/CHIP and Medicare services provided to patients living rural areas as defined in HRSA’s tool – Rural Health Grants Eligibility Analyzer. HRSA will price payments at Medicare rates for Medicaid/CHIP patients. Eligible rural providers may be considered for both Phase 4 and ARP Rural payments.
2. Re-Determination for PRF Phase 3 Eligibility
Providers who believe their PRF Phase 3 payment eligibility was erroneously determined will have a forthcoming opportunity to request a reconsideration. HHS provided a detailed methodology for providers to evaluate and further assess whether initial Phase 3 payments were correctly determined. HHS advises providers to email if it is believed Phase 3 payment was calculated incorrectly, or to be notified when more information becomes available on the Phase 3 reconsiderations process.
HHS’s detailed Phase 3 methodology includes seven steps:
A. Calculating 2 percent of Annual Patient Care Revenue
B. Calculating initial Loss Ratio and Provider-Type Loss Ratios
C. Capping Loss Ratios and other pre-payment value adjustments
D. Calculating 88 percent of Adjusted Losses
E. Selecting the greater of calculated A or D
F. Deducting all prior PRF payments from result of E
G. Flagging and conducting manual review of flagged potential payments
3. Grace Period Through Nov. 30 for PRF Period 1 Reporting
Mentioning COVID surges and natural disasters around the country, HHS posted on the PRF website a 60-day grace period for Period 1 reporting. Providers unable to meet the September 30 deadline for Period 1, are allowed to “come into compliance” with PRF Period 1 submissions through November 30. HHS strongly encourages providers to complete their Period 1 report in the PRF Reporting Portal by September 30, 2021. HHS will not recoup or apply other enforcement actions during the 60-day grace period (October 1 – November 30, 2021).
Toyon’s Take
HHS’s commitment to over $25 billion in PRF is much needed to the provider industry and exhausts a great deal of the remaining balance of CARES funding. Phase 4 may have some semblance of Phase 3 in perhaps measuring operating margins (as HHS recommends providers gather supporting documentation, such as most recent tax documents and financial statements for the second half of CY 2020 and the first quarter of CY 2021). Operating margins comparing the latter half of CY 2020 vs. latter half of CY 2019, as well as a measurement of the first quarter of 2021 vs. the first quarter of 2019 [2] may be evaluated as part of Phase 4. In this round however, HHS is further prioritizing funding based on hospital size [3] and payer mix (e.g., pricing eligible providers’ Medicaid and CHIP claims at Medicare rates). Other funding (e.g., base-funding amounts for large, medium and small providers) may be based on a pro-rata formula, similar to other calculations applied throughout the PRF. 
The redetermination of Phase 3 eligibility is great news for many providers looking for reconsideration of these payments. Toyon is in the process of updating a model to assist with Phase 3 redeterminations and will be sharing it with our clients over the coming weeks.
Lastly, the 60-day grace period is certainly welcome for many providers. However, uncertainty remains concerning the impact of being “out of compliance” as well as PRF portal availability from October 1 through November 30. Toyon will share any additional information on these concerns if it becomes available.
Please feel free to contact Fred Fisher at with any questions. Thank you. 
[1] HHS notes there will be some limited exceptions for some services provided predominantly in Medicaid and CHIP.
[2] Consolidated Appropriations Act, 2021 (H. R. 133—740) “any funds recovered from health care providers after the date of enactment of this Act, shall be for any successor to the Phase 3 General Distribution allocation to make payments to eligible health care providers based on applications that consider financial losses and changes in operating expenses occurring in the third or fourth quarter of calendar year 2020, or the first quarter of calendar year 2021, that are attributable to coronavirus…”
[3] Details (e.g., beds, discharges, visits, NPSR, etc.) related to the measurements used to determine small, medium and large providers are still to be determined.  
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September 15 Open Webinar on CARES PRF Portal

Please join Toyon’s 1.5-hour open webinar on the CARES Provider Relief Fund (PRF) Reporting on September 15 at 10 AM PDT.  
This forum, facilitated by Toyon, will allow providers to exchange ideas, ask questions, and share both challenges and reporting approaches related to the September 30 PRF “Period 1” Deadline.

Register Here.  We look forward to talking with you.

Topics include:

  • The “order of operations” reporting expenses and lost revenue to the PRF portal
  • PRF “Period of Availability” and concept of “holding” PRF expenses to report in a subsequent reporting period and/or for FEMA reimbursement
  • Carry forward of lost revenue from reporting period 1 into subsequent reporting periods
  • Accounting for other patient care revenue, like Medicare’s 20% DRG add-on, against PRF
  • Transferring Targeted Payments from subsidiaries to parent entities
  • Reporting hybrid of “budget to actual” revenue and “actual to actual” revenue under PRF “other – option iii” for reporting COVID-19 revenue loss.  
Please feel free to reach out to Fred Fisher at with any issues you would like addressed for PRF reporting or other questions. 
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CARES PRF Reporting Update

1. HRSA to Hold Two Stakeholder Calls Tomorrow 8/26 / HRSA Website Change
2. OMB Releases Updated PRF Audience Guidance
3. Toyon’s Workbook for CARES PRF Reporting
4. Toyon’s Article on Complexities with CARES PRF Reporting
1. HRSA to Hold Two Stakeholder Calls Tomorrow 8/26 / HRSA Website Change
Tomorrow HRSA is holding two calls on PRF reporting for reporting period one covering PRF received from April 10, 2020 to June 30, 2020 (due September 30th). Register here for the call at 11 AM ET | 8 AM PT. Register here for the call at 3 PM ET | 12 PM PT.  
The HRSA CARES PRF Website has also recently changed, including links to resources and FAQsHSRA’s updated website includes new guides on lost revenue and reporting period one.  The lost revenue guide includes examples of reporting under each option (quarterly actual, quarterly actual vs. budget, or other).  HHS recommends providers consider revenue reporting options based on the following:
2. OMB Releases Updated PRF Audience Guidance

The Office of Management and Budget (OMB) recently released its July 2021 Compliance Supplement with additional audit instruction on CARES PRF[1].   Listed below are highlights under Department of Health and Human Services, Assistance Listing 93.498:
  • Auditors should consider delaying the commencement of the compliance audit of the PRF program until recipients have completed the PRF report.
  • Listed under “Alternate Method of Calculating Lost Revenues Attributable to Coronavirus” OMB notes the auditor is not responsible for determining the reasonableness of the alternative method described in the provider’s narrative.
  • OMB provides an audit objective to determine whether a provider billed out-of-network patients with a presumptive or actual case of COVID-19, for out-of-pocket expenses in an amount greater than what the patient would have otherwise been required to pay if the care had been provided by an in-network provider. The audit review may include:
    • A review of the recipient’s billing and collection policies and procedures applicable to patient out-of-pocket expenses for patients with a presumptive or actual case of COVID-19.
    • A test a sample of out-of-network patients with a presumptive or actual case of COVID-19 to determine whether the patient was assessed an out-of-pocket charge for services and ascertain if the charge was in compliance with terms and conditions of the award.
  • OMB states “as a best practice, the recipients may wish to include a footnote disclosure on the Schedule of Expenditures for Federal Rewards (SEFA) to identify which providers by TIN are included in the audit”.
  • OMB aligns HRSA PRF reporting requirements with Schedule of SEFA reporting in the following table:

Further on SEFA reporting, OMB states:
  • For a FYE of June 30, 2021, and through FYEs of December 30, 2021, recipients should report in the SEFA, the expenditures and lost revenues from the Period 1 PRF report.
  • For a FYE of December 31, 2021 and through FYEs of June 29, 2022, recipients should report in the SEFA, the expenditures and lost revenues from both the Period 1 and Period 2 PRF reports.
  • For FYEs on or before June 29, 2021, no PRF expenditures or lost revenues should be reported by recipients on the SEFA until the specified timeframe described in the reporting requirements summarized in the table above.
[1] HHS only provides audit guidance through the OMB Compliance Supplement. 
3.    Toyon’s Workbook for CARES PRF Reporting
Toyon is pleased to provide our clients and industry colleagues an optional complimentary workbook designed to evaluate and support COVID-19 expenses and lost revenues applied against CARES Provider Relief Fund (PRF) payments. This workbook reflects Toyon’s best understanding of the HHS PRF Guidance released June 11, 2021 and subsequent FAQs.
For access to this workbook, please register and download on our website here. It is recommended users of the workbook schedule a brief meeting with Fred Fisher,
Fred can be reached at Users of the Workbook are highly encouraged to ensure the results are consistent with internal amounts, expectations, etc.
4.    Toyon’s Article on Complexities with CARES PRF Reporting
Toyon is also happy to share an article highlighting the complexities of CARES PRF reporting here. This article addresses three specific categories of CARES PRF reporting concerns:
  • Vulnerability of CARES funding due to potential variation in audit determinations
  • Complexities in hospital reimbursement determining patient care revenue
  • Use and reporting of “Targeted” PRF payments between parent companies and subsidiaries
Please feel free to share and comment on this article with other concerns with PRF reporting. Toyon is happy to update this article inclusive of other significant industry issues. We hope this article gains traction and promotes further clarity in PRF reporting.
Please feel free to contact Fred Fisher at with any questions. 
Thank you.  


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