HHS appears poised to let hospice providers use federal relief grants to offset fundraising and thrift store revenue they lost due to COVID-19, although the agency's communication leaves room for interpretation.
HHS' Health Resources and Services Administration chief wrote in a Dec. 2 letter to a hospice trade group that lost fundraising and thrift store revenue "may qualify as reimbursable lost revenue" under the Provider Relief Fund grant program.
HRSA Administrator Thomas Engels' letter to the National Hospice and Palliative Care Organization was in response to its Nov. 17 request for clarification on whether providers could use their grant money to make up for that lost revenue. But his response still leaves a question mark for the trade group, which represents more than 4,000 hospice locations and 48 state hospice and palliative-care organizations.
"We see the 'may' as well," said Judi Lund Person, NHPCO's vice president for regulatory and compliance.
The "$64,000 question" is whether the open-ended letter is enough basis for hospice and palliative-care providers to go ahead and use the grant money to replace lost fundraising and thrift store revenue, Lund Person said. Most chief financial officers she's spoken with have said they will do so until they hear otherwise.
"We might not need more guidance," she said.
HHS has gone back and forth with respect to its instructions to providers for recognizing their Provider Relief Fund grants as revenue. Most recently, the agency in October said providers can keep the money up to the amount of their year-over-year revenue difference from 2019 to 2020. But NHPCO CEO Edo Banach pointed out in his letter that the October guidance did not address lost fundraising and thrift store revenue specifically.
HHS did not return a request for further clarification.
Engels' letter directs providers to calculate lost revenue attributable to the pandemic by reporting revenue received from Medicare, Medicaid, commercial insurance and other sources for patient care services.
"Providers should report fundraising and thrift store revenue in 2019 and 2020 as a revenue source if it was raised to fund patient care services," the letter continued.
The stipulation seems to be that hospice and palliative-care providers can only use the grant money to offset lost fundraising and thrift store revenue if that revenue goes toward patient care, Lund Person said. The vast majority is already used that way, she said. The money typically funds bereavement programs, care for uninsured patients and room and board for people who can't pay.
That's the case at East End Hospice on Long Island, New York. Its thrift store, which was closed for almost three months at the height of the pandemic, typically funds about 70% of its budget for bereavement services, CEO Mary Crosby said. And fundraising typically covers 20% of its operating budget.
East End Hospice's bereavement services are free of charge for both family members of its hospice clients and community members who are not clients. Services include equine therapy, music and art therapy and a summer camp for kids. The demand for those services is much higher lately because of COVID's toll, even as thrift store revenue has shrunk.
At the same time, East End Hospice was forced to cancel all four of its summer fundraisers, including large annual gala that typically hosts 600 people.
Using the grant money to offset those losses is "essential," Crosby said.
"It's very important to us and I think that decision was crucial in terms of where we land at the end of this fiscal year," she said. "We absolutely will claim those losses and use that money because it really has impacted our bottom line."
Hospice Austin, a not-for-profit hospice provider serving Central Texas, said it was forced to cancel this year's brunch fundraiser that typically brings in $500,000. At the same time, the number of days of care provided to patients with no insurance or other funding as grown by more than 50% from year-over-year, spokeswoman Melinda Marble wrote in an email.
"We are definitely feeling the effects of the pandemic," she said.
About 70% of the country's hospice providers are for-profit, compared with about 27% not-for-profit and 4% government owned, according to NHPCO data. For-profit providers raise money through foundations, with the proceeds going toward special programs and room and board for uninsured patients, Lund Person said.
