The Department of Health and Human Services (HHS), through its Health Resources and Services Administration (HRSA) office, is taking action to recoup CARES Act funding from health care providers who received relief funding but did not meet the reporting requirements set by HRSA.

To receive COVID-19 relief funding from HRSA pursuant to the CARES Act, providers had to attest to compliance with the terms and conditions promulgated by HRSA. Recipients of the funds must agree to the terms and conditions specific to the Phase in which they received funding distribution. Those terms and conditions evolved over time, with different reporting periods for each wave of funding. Under all waves, failure to report to HRSA regarding the use or allocation of received funds constitutes noncompliance with HRSA’s terms and conditions and requires repayment of the funds.

Providers who completed reporting, but reported unused funds, will have 30 days from the end of their specific reporting deadline to return all unused funds.

Period 1 Clawbacks

According to reports from Bloomberg Law, (subscription required) HRSA is asking over 10,000 recipients of COVID-19 Provider Relief Funds (PRF) to return unused and unreported funds. According to Health Policy, (subscription required) more than 98% of providers met the reporting deadline.

The health care providers that are being asked to return funding are the ones who: (1) received more than $10,000 in funding in the first period of funding; and (2) did not comply with their required reporting deadline. These providers were initially required to report how they used their first wave of provider relief funds by September 30, 2021, but due to uncertainty over how to report and the impact of the pandemic on provider operations at the end of the year, HRSA allowed multiple extensions until December 20, 2021.

Following HRSA’s announcement of its intent to seek recoupment of funds from providers who did not meet the terms and conditions, including failure to report their use, some funding recipients claimed that the reporting requirements were not clear when the first wave of funds were issued to providers and accepted. Others claimed that they did not receive reminders regarding reporting because the notices either went to junk mail or were sent to employees who are no longer employed by the providers. According to HRSA, however, the requirement to report was clear and providers were reminded of their reporting requirements through various media including email, mail, social media, and other national outreach efforts.

Providers who did not complete the required reporting are being asked to return all funds received during the applicable period of relief funding within 30 days of a final notice by HRSA. The final notices for the first wave of funding were sent on March 10, 2022, which means that some providers will be required to return all received funds by April 9, 2022. This return is not optional and HRSA has stated that it will pursue recovery against providers who do not return the requested funds by April 9, 2022.

On March 31, over thirty provider organizations, including the American Medical Association, penned a letter to HRSA asking it to reopen the Period 1 reporting window for at least an additional 60 days for providers who have not met reporting requirements. Although HRSA has not officially responded to the request, guidance on its reporting requirements website indicates that “HRSA will provide an opportunity for non-compliant providers to complete a report as a result of specific extenuating circumstances.”

Providers who do not return the funds also will be excluded from any future payments by the provider relief program. Given the uncertainty surrounding the continued impact of the COVID-19 pandemic, this may present a risk to the continued operations of affected providers.

Periods 2 through 4 Reporting

The reporting portal for period 2 funding began on January 1, 2022 and closed on March 31, 2022. Although the HRSA portal indicates that the reporting period for period 2 is now closed, reporting guidance indicates, as we noted above, that HRSA intends to reopen the portal for providers who missed the initial deadline due to extenuating circumstances. There is no guidance yet on how to request that extension or what constitutes extenuating circumstances, and HRSA plans to provide additional information shortly. Unless there are additional delays, the reporting for period 3 funding is set to open on July 1, 2022.

Providers can register their provider relief fund reporting portal accounts here. Providers who received any wave of these funds should review the reporting requirements and understand the deadlines applicable to their funds.

Below is information from HRSA that explains the various periods of funding and the initial reporting deadlines for each funding period:

Period 1:

  • Payments Exceeding $10K in Aggregate Received from April 10, 2020 through June 30, 2020
  • Deadline to Use Funds was June 30, 2021
  • Reporting Time Period was July 1, 2021 through September 30, 2021

Period 2:

  • Payments Exceeding $10K in Aggregate Received from July 1, 2020 through December 31, 2020
  • Deadline to Use Funds was December 31, 2021
  • Reporting Time Period was January 1, 2021 through March 31, 2021

Period 3:

  • Payments Exceeding $10K in Aggregate Received from January 1, 2021 through June 30, 2021
  • Deadline to Use Funds is June 30, 2022
  • Reporting Time Period is July 1, 2022 through September 30, 2022

Period 4:

  • Payments Exceeding $10K in Aggregate Received from July 1, 2021 through December 31, 2021
  • Deadline to Use Funds is December 31, 2022
  • Reporting Time Period is January 1, 2023 through March 31, 2023