The United States Department of Health and Human Services (“HHS”) released updated Provider Relief Fund (“PRF”) Reporting Guidelines on June 11 and announced that PRF reporting will begin July 1, 2021. The latest updates follow a relatively quiet two-month period for the PRF but signal that the current administration is ready to move forward with PRF reporting despite the fact that over $24 billion has still not been distributed.

In addition to updating the PRF Reporting Guidelines and announcing the new multi-staged reporting structure, HHS added 6 new PRF FAQs and modified 14 existing PRF FAQs.

As discussed in more detail below, however, the updates may raise more questions than answers, especially when deciding how to calculate lost revenue for purposes of retaining PRF payments.


  • HHS is pivoting away from a single reporting structure to a multi-stage reporting structure based on the dates specific PRF payments were received.
  • Reporting for funds received between April 1, 2020 and June 30, 2020 begins July 1, 2021.
  • HHS is also extending the time period for “using” funds. Instead of using a June 30, 2021 deadline for all distributions, it will use a staggered “use” deadline based on the date received with at least 12 months allowed for “use.”
  • Additional technical guidance for reporting will be available on or before July 1, 2021.
  • The guidance is not clear about what time period recipients should use when calculating lost revenue and whether lost revenue in excess of PRF received in one period can be carried forward to future periods.
  • The reporting requirements are now applicable to recipients of the Skilled Nursing Facility and Nursing Home Infection Control Distribution in addition to General and other Targeted Distributions.

As with prior PRF updates, the summaries and analysis below are subject to change and clarification as HHS continues to revise its FAQs and other sub-regulatory PRF guidance.

New Staggered Reporting Structure and Deadlines for Using PRF Payments

The updates include a new staggered schedule for using PRF distributions and reporting on the use of PRF distributions. The new reporting and use schedule also extends the reporting time period from 30 days to 90 days with the first report not due until September 30, 2021.

A summary of the new reporting and use deadlines is included in the below table, as well as on the HHS Provider Relief Fund Reporting and Auditing webpage here. As outlined in the table, HHS created four periods based on when specific PRF payments were received (“Payment Received Period”). Each Payment Received Period has a unique deadline for recipients to use the applicable payments and a unique reporting period. HHS also introduced a new term, the “Period of Availability.” Despite using the term throughout the Reporting Guidelines and website, HHS did not provide a precise definition, though it is presumably the time period beginning with the first date of a Payment Received Period and extending to the end of the corresponding use of funds deadline date.

Payment Received Period (Payments Exceeding $10,000 in Aggregate Received) Deadline to Use Funds Reporting Time Period
Period 1 From April 10, 2020 to June 30, 2020 June 30, 2021 July 1 to September 30, 2021
Period 2 From July 1, 2020 to December 31, 2020 December 31, 2021 January 1 to March 31, 2022
Period 3 From January 1, 2021 to June 30, 2021 June 30, 2022 July 1 to September 30, 2022
Period 4 From July 1, 2021 to December 31, 2021 December 31, 2022 January 1 to March 31, 2023

This extension of the June 30, 2021 deadline for using or “spending” PRF dollars for any payments received after June 30, 2020 represents a partial win for the industry which had been asking for an extension tied to the continuation of the official Public Health Emergency. Unfortunately, recipients that received a bulk of their PRF payments during the first Payment Received Period are still subject to the June 30, 2021 deadline for using funds. This disproportionately impacts smaller organizations, including independent rural hospitals, that were already challenged to demonstrate sufficient lost revenue and expenses necessary to retain the money they received.

Recipients are required to report in each period in which they received one or more payments exceeding, in the aggregate, $10,000. The new approach presumably requires most recipients to submit multiple reports rather than a single comprehensive report since most recipients received PRF distributions during multiple Payment Received Periods, making an already complicated reporting process even more challenging. For most health systems and hospitals, that will require reporting during at least the first three periods and very likely all four if HHS makes additional distributions. Requiring multiple reports based on when funds were received will only add to the accounting and record-keeping burden for recipients related to PRF compliance.

Lost Revenue Calculation Uncertainty

The new schedule also raises serious questions about how recipients calculate lost revenue and whether losses from one Period of Availability can be carried forward to other periods. The lost revenue calculation is critical for most recipients when determining whether the organization can keep the PRF payments received because, in most cases, COVID-19-related lost revenue is substantially larger than COVID-19-related expenses.

The updated Reporting Guidelines maintain the three options for calculating lost revenue included in prior PRF guidance: (1) the difference between actual patient care revenues; (2) the difference between budgeted (if the budget was approved prior to March 27, 2020) and actual patient care revenues; or (3) any reasonable method of estimating lost revenues.

The new table and other changes, however, may change the time period recipients are required to use when calculating lost revenue and raise questions about whether losses and expenses incurred during one Period of Availability can be carried forward to other periods.

Prior HHS guidance required recipients to report lost revenue over a full calendar year, even if the financial impact of COVID-19 was limited to a shorter time period. This was affirmed in the following FAQ added in January 2021:

If an entity incurred enough lost revenue in April and May 2020 to justify its use of the Provider Relief Fund payments received, can it only report those two months? (Modified 1/28/2021)

No. Recipients have multiple options to calculate lost revenue as outlined in the Post-Payment Notice of Reporting Requirements. However, for each of these options, the Reporting Entity must report revenue for the full calendar year 2020. If funds were not expended in full by December 31, 2020, then a second and final report will be required on use of funds for the period January 1, 2021 – June 30, 2021, which is due no later than July 31, 2021.

This limitation was not included in any of the applicable legislation and the public policy behind this approach was always questionable since a full calendar year comparison (whether comparing actual revenue to budget or 2019 actual revenue to 2020 actual revenue) likely does not reflect the actual financial impact of COVID-19 for many systems. The pandemic had minimal, if any, financial impact on hospitals in January and February 2020, for example. There also could be many factors that caused revenue variations with no causal connection to COVID-19.

Notably, this FAQ is no longer on the current list of PRF FAQs. Similarly, the new Reporting Guidelines descriptions for calculating lost revenue using an actual patient care revenues approach or difference between budgeted and actual patient care revenues no longer include references to a full calendar year. For example, when describing the actual-to-actual patient care revenues approach, the prior version of the Reporting Guidelines state that recipients care calculates lost revenue based on “the difference between 2019 and 2020 actual patient care revenue.” The updated Reporting Guidelines, however, simply state that recipients can calculate lost review based on “the difference between actual patient care revenues.” There is no longer a reference to 2019 or 2020 calendar year.

This change would be beneficial to many recipients, assuming that expenses and losses can be carried forward to other periods. The multi-million dollar question is whether recipients will be permitted to carry losses forward or carry back in some cases.

If expenses and losses cannot be carried forward, the new multi-time period approach could have a devastating impact on the ability of recipients to retain PRF payments. Many systems incurred substantial financial losses during April, May and June of 2020, when state and local shut-down orders were most prevalent. These systems, therefore, had substantial lost revenues during the first Period of Availability.

In some cases, system and hospital revenue stabilized during the second half or fourth quarter of 2020, even if they did not return to full pre-COVID levels. These systems and hospitals would not have much, if any, lost revenue during the second Period of Availability (July 1, 2020 through December 31, 2021). Though, these same systems would have received considerable distributions during the second Payment Received Period.

If HHS requires recipients to demonstrate lost revenue and expenses during the Period of Availability in which the recipient received a distribution without carrying-forward losses and expenses from the prior Period of Availability, recipients would be facing the prospect of refunding millions of PRF dollars despite still having substantial amounts of lost revenues unreimbursed.

This is almost certainly not consistent with the Congressional intent and hopefully will be resolved in future HHS guidance. In the meantime, recipients should be aware of the potential impact of the new reporting structure and work closely with the organization’s internal and external accounting, finance and legal advisers to ensure their organization is prepared for the upcoming reporting obligations.

Documentation Reminder

A new FAQ about how recipients should determine whether an expense is eligible for reimbursement from the PRF reinforces the need to maintain detailed documentation on the receipt and use of PRF payments. In response to the question, HHS notes that the “burden of proof is on the Reporting Entity to ensure that adequate documentation is maintained.” Another modified FAQ unambiguously reminds recipients that HHS will audit the use of PRF payments and recoup payments if necessary, including if expenses are not supported by adequate documentation. The full FAQ response states:

“HHS reserves the right to audit Provider Relief Fund recipients now or in the future and is authorized to collect any Provider Relief Fund amounts that have not been supported by documented expenses or losses attributable to coronavirus or not used in a manner consistent with program requirements or applicable law.”

Technical Assistance

HHS reiterated that it will hold webinars for recipients and other interested stakeholders, which will include opportunities for questions and answers. HHS stated it will also continue to update and issue additional FAQs and a detailed PRF Reporting Portal User Guide to provide greater clarity about the reporting process.

Future Distributions

There is still no word from HHS on how it intends to distribute the approximately $24 billion remaining in the PRF, including the $8.5 billion appropriated by the American Rescue Plan Act of 2021 for rural providers. The Phase 4 distribution period included in the new reporting and use table includes payments between July 1, 2021 and December 31, 2021, suggesting that additional payments are anticipated.