Provider Relief Funds

Provider Relief Funds

Are you a medical provider who received Provider Relief Funds (PRF) from the Department of Health and Human Services (HHS)? Why did you receive these funds? What requirements do you need to meet to comply with Health and Human Services?

The federal government responded to COVID-19 with several laws which provided new programs to help employers, individuals, governments, and education. The one that has been all over the news has been the Paycheck Protection Program (PPP Loans). The second largest program that was created was the Provider Relief Funds. These funds were paid directly to hospitals and other healthcare providers to support health-care related expenses or lost revenue attributable to COVID-19. The PRF also included the front-line Coronavirus response and ensured that uninsured Americans could get treatment for COVID-19. The funds were distributed based on Medicare fee-for-service, CMS cost reports, Medicaid, and CHIP payments to provider in the prior year.

To find additional information on the PRF, there are several links you can access:

CARES Act Provider Relief Fund: https://www.hhs.gov/coronavirus/cares-act-provider-relief-fund/index.html

CARES Act Provider Relief Fund General Information: https://www.hhs.gov/coronavirus/cares-act-provider-relief-fund/general-information/index.html

CARES Act Provider Relief Fund: For Providers which includes copies of terms and conditions: https://www.hhs.gov/coronavirus/cares-act-provider-relief-fund/for-providers/index.html

CARES Act Provider Relief Fund FAQs: https://www.hhs.gov/coronavirus/cares-act-provider-relief-fund/faqs/index.html

CARES Act Provider Relief Fund Reporting Requirements: https://www.hhs.gov/coronavirus/cares-act-provider-relief-fund/reporting-auditing/index.html

For-profit providers who received over $750,000 in PRF from HHS will be subject to audits of those funds under Single or Program Specific Audit requirements (Single Audit), under Uniform Guidance (UG), or Generally Accepted Government Auditing Standards (GAGAS). SURPRISE!

What does this mean for providers? First, like the PPP (Payroll Protection Program) Loans, all questions have not been answered, but the remainder of this article will provide what we know to this point. There are three options:

  1. If providers only received PRFs, they are not required to undergo a financial statement audit, rather they will be able to obtain a program specific audit, which will include an evaluation of compliance requirements, described in the terms and conditions of the PRF, as well as an understanding and testing of internal controls the provider has in place over the PRF.
  2. Providers who received PRFs and additional dollars from HHS or other federal grants will need to have a financial statement audit and an audit of the schedule of expenditures and federal awards. The schedule of expenditures and federal awards would list all HHS and other federal grants expended by the for-profit. At least one award listed on the schedule will need to be selected for testing of compliance and internal controls.
  3. The third option may be the best option, but the one where we need more guidance. What we do know is that the providers may have a GAGAS financial audit. This would include an audit of the statement of costs for the PRF (including lost revenue) due to the closures caused by COVID-19.

Confused? Yes, we understand and are here to help with organizations who have received Provider Relief Funds. Please contact our Audit Partner, Susan Valdez or our Audit Manager, Anette Flores to discuss what options may work best for your organization.


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