For those healthcare providers that report eligible expenses attributable to COVID-19 that exceed the amount of Provider Relief Funds received in Period 1, or whose lost revenue exceeds such amounts, HHS made it clear that the "surplus" may carry over to future reporting periods. The Terms and Conditions do not impose any limitations on the ability of a provider to submit a claim for payment to the patient's insurance company. Updated April 7, 2020 The Department of Health and Human Services on April 10 began distributing $30 billion in funds from the new $100 billion Public Health and Social Services Emergency Fund created by the CARES Act. A provider that sold its only practice or facility must reject the Provider Relief Fund payment because it cannot attest that it was providing diagnoses, testing, or care for individuals with possible or actual cases of COVID-19 on or after January 31, 2020, as required by the Terms and Conditions. All recipients are subject to audit. Loss before income taxes (20,561 ) (15,155 ) (68,904 ) (40,012 ) Income tax expense (benefit) 57 (8,725 ) (1,766 ) . Original article 06/21/2021: On June 11, 2021, the Department of Health and Human Services (HHS) released new guidance on the Provider Relief Fund (PRF) with the most detailed explanation of the reporting and auditing requirements to date. "The payments to providers do not qualify as qualified disaster relief payments under section 139. Eligible health care entities, including those that are parent organizations must substantiate that these funds were used for health care-related expenses or lost revenue attributable to COVID-19, and that those expenses or losses were not reimbursed from other sources and other sources were not obligated to reimburse them. Providers who received over $750,000 PRF are also subject to a compliance audit. On Wednesday, HHS is launching an enhanced Provider Relief Fund Payment Portal that will allow eligible Medicaid and CHIP providers to report their annual patient revenue, which will be used as a factor in determining their Provider Relief Fund payment. Hours of operation are 7 a.m. to 10 p.m. Central Time, Monday through Friday. PRF payments received in the first half of 2022 can be used until June 30, 2023. Generally, if you're are not tax exempt. Many medical providers have taken advantage of the Provider Relief Fund, a part of the CARES Act intended to cover certain expenses and lost revenues that healthcare practitioners have incurred as a result of COVID-19 (read our eligibility guidance here). Holland & Hart, 800 W Main Street, Suite 1750, Boise, ID 83702. phone: 208-383-3913. To ensure transparency, HHS will publish the names of payment recipients and the amounts accepted and attested to by the payment recipient. Many states also used funds to help . The South Carolina General Assembly authorized the spending of the CRF in two phases: Act 142 of 2020 (Phase 1) and Act 154 of 2020 (Phase 2). If HHS identifies a payment made incorrectly, HHS will recover the amount paid incorrectly or overpaid. More information on Relief Fund payments can be found in this PYA insight. The IRS has made clear that these state and local grants to businesses are taxable income. HHS does not have plans to include additional data fields in thepublic listof providers and payments. The parent organization may allocate the Targeted Distribution to any of its subsidiaries that are eligible health care providers in accordance with the Coronavirus Response and Relief Supplemental Appropriations Act. Generally, if the applicable reporting period for the funds has not closed and the provider believes that they have returned an amount greater than what was owed, HRSA will refund the provider the erroneously returned amount. > About HHS requires that providers who receive payments over $150,000 submit quarterly reports to HHS and the Pandemic Response Accountability Committee. Currently, the AOA is working to ensure past and future HHS Provider Relief Funds are not treated as taxable income, and potential legislation to address this matter is forthcoming. The U.S. Department of Health and Human Services (HHS) has updated its Provider Relief Fund FAQ to clarify that payments from the Provider Relief Fund are taxable. The first FAQ addressed the issue of taxation for for-profit health care providers. The parent organization (an eligible health care entity) must substantiate that these funds were used for health care-related expenses or lost revenue attributable to COVID-19, and that those expenses or losses were not reimbursed from other sources and other sources were not obligated to reimburse them. Yes. HHS reserves the right to audit Provider Relief Fund recipients now or in the future, and may pursue collection activity to recover any Provider Relief Fund payment amounts that have not been supported by documentation or payments not used in a manner consistent with program requirements or applicable law. Duplication of expenses and lost revenues is not permitted. More revisions to the FAQs are possible and could further impact tax liability. The Provider Relief Fund is to be used for health care related expenses and lost revenues attributable to COVID-19. I received 3rd wave provider relief stimulus funds in Jan 2021. In addition, the address listed for the billing TIN often corresponds with the billing location (based on CMS's Provider Enrollment, Chain, and Ownership System (PECOS)), and may not align with the physical location of a health care practice site. It may attest on behalf of any or all subsidiaries that qualified for a Targeted Distribution (i.e., Skilled Nursing Facility, Safety Net Hospital, Rural, Tribal, High Impact Area) payment. accounting, Firm & workflow Specifically, the IRS was asked whether a for-profit health care provider is required to include HHS Provider Relief Fund payments in its calculation of gross income under Section 61 of the Internal Revenue Code (Code), or whether such payments were excluded from gross income as qualified disaster relief payments under Section 139 of the Code. Recipients may use payments for eligible expenses or lost revenues incurred prior to receipt of those payments (i.e., pre-award costs) so long as they are to prevent, prepare for, and respond to coronavirus. HHS and IRS guidance on this has not changed. HHS has posted apublic list of providers and their paymentsonce they attest to receiving the money and agree to the Terms and Conditions. May 5, 2020. Advocacy Blog Tax & Finance. policy, Privacy All providers retaining funds must sign an attestation and accept the Terms and Conditions associated with payment. As a result of the CARES Act, the Provider Relief Fund (PRF) was created to reimburse eligible health care providers for increased expenses or lost revenue attributable to COVID-19. According to HHS, 1099 forms will be sent to physicians who received a payment in excess of $600 during the 2020 calendar year, from either the Provider Relief . The program provides funding for testing and treatment but will stop accepting claims due to insufficient funds. The information displayed is of providers by billing TIN that have received at least one payment, which they have attested to, and the address associated with that billing TIN. TheProvider Relief Fund datarepresent providers that received one or more payments from the Provider Relief Fund and that have attested to receiving at least one payment and agreed to the associated Terms and Conditions. Provider Relief Fund payments must be used to cover healthcare related expenses American Relief Plan Act Fund No HHS has not yet developed a process for eligible providers to apply for ARPA funds. The Terms and Conditions for ARP Rural payments require that recipients that receive payments greater than $10,000 notify HHS during the applicable Reporting Time Period of any mergers with or acquisitions of any other health care provider that occurred within the Payment Received Period. We have been supplied with General Information and Frequently Asked Questions (FAQs). HHS is using Phase Four to reimburse small providers that have lower operating margins and serve vulnerable communities at higher rates, as well as bonus payments to providers serving Medicaid, CHIP, or Medicare populations with lower incomes and higher complex medical needs. Provider Relief Fund payments that were made incorrectly, or exceed lost revenues or expenses due to coronavirus, or do not otherwise meet applicable legal and program requirements must be returned to HHS, and HHS is authorized to recover these funds. HHS has yet to fix the problem, which has created a series of traps for unwary providers. To return any unused funds, use the Return Unused PRF Funds Portal. Home Is a tax-exempt health care provider subject to tax on a payment it receives from the Provider Relief Fund? The parent organization may allocate the Targeted Distribution to any of its subsidiaries that are eligible health care providers in accordance with the Coronavirus Response and Relief Supplemental Appropriations Act. Other recipients may be required to submit reports with HHS on an as-needed basis. For more information about lost revenues, please reviewHRSAs Lost Revenues Guide (PDF - 328 KB). Whats Hot on Checkpoint for Federal & State Tax Professionals? In particular, all recipients will be required to substantiate that these funds were used for health care-related expenses or lost revenues attributable to coronavirus, and that those expenses or losses were not reimbursed from other sources and other sources were not obligated to reimburse them. On July 7, 2020, the Internal Revenue Service published a series of Frequently Asked Questions that address the taxation of payments to health care providers under the HHS Provider Relief Fund. However, ARP Rural payments are administered jointly with the Provider Relief Fund, and eligible applicants can apply through the same Application (Updated 8/4/2020). Information on future distributions will be shared when publicly available. They do not qualify as disaster relief payments under Section 139. ARPA Funds for HCBS Providers ARPA Funds for . brands, Social Payment recipients must certify that the payment will only be used to prevent, prepare for, and respond to COVID-19, and that the payment shall reimburse the Recipient only for health care related expenses or lost revenues that are attributable to coronavirus not reimbursed by other sources or that other sources are obligated to reimburse. ARP Rural recipients must use payments only for eligible expenses, including services rendered and lost revenues attributable to COVID-19, incurred by the end of the Period of Availability that corresponds to the Payment Received Period. 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