The Health Resources and Services Administration (HRSA) recently addressed two questions perplexing recipients working to calculate lost revenues for Provider Relief Fund (PRF) reporting:
The Baseline Comparison Period is 2019
Initial reporting guidance contemplated a singular POA beginning and ending in the 2020 calendar year, thus allowing recipients to easily compare pandemic-affected revenues to corresponding quarters in 2019, the calendar year before the onset of the pandemic. When HRSA extended the use period for PRF funds beyond 2020, recipients were unsure if they should compare revenues in 2021 to the corresponding periods in 2019 or the immediate prior year. That is, should recipients compare revenue from the first quarter of 2021 to the same quarter in 2019 or 2020 when calculating lost revenue?
HRSA addressed the question directly in an FAQ added on July 1, 2021. The agency wrote:
“Quarters from 2019 will serve as the baseline period of comparison [using Option I (Comparison of Actual Lost Revenues) or Option ii (Comparison of Budgeted to Actual Lost Revenues)].”
As a result, recipients should compare revenues for each calendar quarter within the POA to the corresponding quarter in calendar year 2019 to calculate lost revenues eligible for PRF reimbursement. Answering the previous question, recipients should separately compare the revenues from the first quarters or 2020 and 2021 – both in the first period of availability – to the first quarter of 2019.
Quarters With Higher Revenue Than the Baseline Period do not Offset Quarters With Lower Revenue Than the Baseline Period
The PRF General and Targeted Distribution Post-Payment Notice of Reporting Requirements, most recently updated on June 11, 2021, spells out the types of lost revenues that recipients must report for each calendar quarter during the POA. It is, however, relatively silent as to how those elements are used to calculate the amount of lost revenues eligible for PRF relief. Recipients were unsure how to treat includable quarters with revenue increases, specifically questioning whether those quarters would offset losses calculated for other quarters.
In another FAQ added on July 1, the HRSA answered (emphasis added):
“For Option i and Option ii, lost revenues are calculated for each quarter during the period of availability, as a standalone calculation [emphasis added], with 2019 quarters serving as a baseline. For each calendar year of reporting, the applicable quarters where lost revenues are demonstrated are totaled to determine an annual lost revenues amount. The annual lost revenues are then added together.”
Ultimately, lost revenues for one or more quarters within the POA are eligible for PRF reimbursement regardless of increases in other quarters.
In a training webinar on July 20, 2021, HRSA included the following example to demonstrate comparing revenues to baseline periods to determine eligible lost revenues:
- What is the baseline comparison period for quarters ended March 31 and June 30, 2021?
- Within each period of availability (POA), do quarters with higher revenue than the baseline offset losses from quarters with lower revenue than the baseline?
The Baseline Comparison Period is 2019
Initial reporting guidance contemplated a singular POA beginning and ending in the 2020 calendar year, thus allowing recipients to easily compare pandemic-affected revenues to corresponding quarters in 2019, the calendar year before the onset of the pandemic. When HRSA extended the use period for PRF funds beyond 2020, recipients were unsure if they should compare revenues in 2021 to the corresponding periods in 2019 or the immediate prior year. That is, should recipients compare revenue from the first quarter of 2021 to the same quarter in 2019 or 2020 when calculating lost revenue?
HRSA addressed the question directly in an FAQ added on July 1, 2021. The agency wrote:
“Quarters from 2019 will serve as the baseline period of comparison [using Option I (Comparison of Actual Lost Revenues) or Option ii (Comparison of Budgeted to Actual Lost Revenues)].”
As a result, recipients should compare revenues for each calendar quarter within the POA to the corresponding quarter in calendar year 2019 to calculate lost revenues eligible for PRF reimbursement. Answering the previous question, recipients should separately compare the revenues from the first quarters or 2020 and 2021 – both in the first period of availability – to the first quarter of 2019.
Quarters With Higher Revenue Than the Baseline Period do not Offset Quarters With Lower Revenue Than the Baseline Period
The PRF General and Targeted Distribution Post-Payment Notice of Reporting Requirements, most recently updated on June 11, 2021, spells out the types of lost revenues that recipients must report for each calendar quarter during the POA. It is, however, relatively silent as to how those elements are used to calculate the amount of lost revenues eligible for PRF relief. Recipients were unsure how to treat includable quarters with revenue increases, specifically questioning whether those quarters would offset losses calculated for other quarters.
In another FAQ added on July 1, the HRSA answered (emphasis added):
“For Option i and Option ii, lost revenues are calculated for each quarter during the period of availability, as a standalone calculation [emphasis added], with 2019 quarters serving as a baseline. For each calendar year of reporting, the applicable quarters where lost revenues are demonstrated are totaled to determine an annual lost revenues amount. The annual lost revenues are then added together.”
Ultimately, lost revenues for one or more quarters within the POA are eligible for PRF reimbursement regardless of increases in other quarters.
In a training webinar on July 20, 2021, HRSA included the following example to demonstrate comparing revenues to baseline periods to determine eligible lost revenues:
Each calendar quarter during the period of availability, regardless of the calendar year in which it falls, is compared to its corresponding quarter in 2019. Those quarters with less revenue than the baseline are added together, disregarding quarters with increased revenue, to determine the lost revenues eligible for PRF reimbursement.
SOURCE LINKS
https://www.hhs.gov/sites/default/files/provider-post-payment-notice-of-reporting-requirements-june-2021.pdf
https://www.hhs.gov/coronavirus/cares-act-provider-relief-fund/faqs/provider-relief-fund-general-info/index.html#auditing-reporting-requirements
https://www.hhs.gov/sites/default/files/lost-revenues-guide.pdf
https://webex.webcasts.com/viewer/event.jsp?ei=1480779&tp_key=059854c38e
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