Healthcare Alert: HRSA Calls for Repayment of Provider Relief Funds and Alters Reporting Requirements

The U.S. Department of Health and Human Services (“HHS”) recently announced a clawback of funds disbursed by Health Resources and Services Administration (“HRSA”) under the Coronavirus Aid, Relief and Economic Security (“CARES”) Act. Funds dispersed through the HRSA Provider Relief Fund (“PRF”) are subject to certain requirements, including post-payment reporting. While HRSA does not generally require repayment of PRF, providers are obligated to attest to specified Terms and Conditions to retain such funds. HRSA however, has recently published a Returning Funds Fact Sheet[1] targeted towards recipients of PRF payments who did not comply with such reporting requirements under the Terms and Conditions.[2] HRSA set forth specific circumstances under which certain recipients will be obligated to return funds obtained from the PRF. More specifically, those required to return funds include providers who rejected a payment in the PRF application and attestation portal; and providers with remaining unused funds that cannot be expended on allowable expenses or lost revenues attributable to coronavirus by the upcoming application deadlines, specific to the distribution in which they received a payment. The clawback is estimated to recoup approximately $100 million in COVID-19 aid funds.

The PRF was implemented to allocate payments to eligible providers to support those on the front lines and protect patients’ access to health care. The CARES Act provided for a $2.2 trillion economic stimulus bill. Immediately following the CARES Act, HHS instituted PRF phases, that progressively expanded funding to eligible providers. In addition to the PRF General Distribution funding, HHS allocated targeted distribution funding to providers to address added COVID-19 challenges, including high-need and vulnerable populations, such as nursing homes and providers serving individuals in rural areas.

The new PRF compliance guidelines state that if a provider fails to return funds as required, HRSA will pursue enforcement actions including repayment and/or debt collection for any unreturned PRF payments. Participating providers should be aware of their status and reporting obligation to avoid potential exposure and enforcement actions. Often, HRSA reminder notices are overlooked resulting in unintentional default. HRSA has previously issued grace periods for reporting and now provides a portal to request an extension on reporting due to extenuating circumstances. It is important that PRF recipients follow the new reporting guidelines to avoid unnecessary action or noncompliance associated with the PRF funds.

How Frier Levitt Can Help

Frier Levitt attorneys work closely with a variety of healthcare providers, medical practices, hospitals and care centers. Our attorneys have extensive experience with navigating HRSA guidelines, as they specifically relate to COVID-19 targeted programs. We will continue to monitor developments relating to issues surrounding the CARES Act and PRF funding. We are available to guide and assist with the reporting process and extension requests. Please contact us for more information.