Healthcare providers will be required to account for how they spent COVID-19 relief grants by February 2021, HHS quietly announced on Monday.
When lawmakers established the $175 billion Provider Relief Fund, one of the stipulations was that healthcare providers receiving large grants would have to submit quarterly reports to HHS and to an oversight commission on their spending, starting on July 10. But HHS delayed that reporting deadline last month and said providers wouldn't have to submit quarterly reports.
Instead, healthcare providers that received more than $10,000 from the Provider Relief Fund will have to account for all the grant funds they spent in 2020 by February 15, 2021, according to a new HHS notice document.
The $10,000 reporting threshold is a notable change from the statutory requirement in the Coronavirus Aid, Relief, and Economic Security Act, which required detailed reporting disclosures from any entity that had received more than $150,000 in total funds from any COVID-19 relief legislation.
"We think many organizations who received less than $150,000 will be surprised by the announcement that they will now be required to report to HHS," said RSM US healthcare partner Rick Kes.
HHS said it will release detailed instructions about the reporting requirements by August 17.
The reporting system is set to open on October 1. The Health Resources and Services Administration will hold question and answer sessions via webinar before the submission deadline.
"HHS has a significant task ahead of themselves to educate the provider community about these requirements between now and the deadline," said McDermottPlus Consulting Vice President Mara McDermott.
If healthcare providers don't spend all the grant funds by the end of 2020, they will be required to submit a final report on the remaining funds by July 31, 2021.
More payments could be coming later in 2020, as Congress is weighing adding more money to the Provider Relief Fund in the next COVID-19 relief package. House Democrats proposed a $100 billion refill with more strings attached, and the American Hospital Association, American Medical Association and American Nurses Association also called for $100 billion on Wednesday.
Senate Appropriations health subcommittee Chair Roy Blunt (R-Mo.), who has been involved in negotiating Senate Republicans' forthcoming package, said that Republicans are considering adding new funding to the Provider Relief Fund, though he declined to name a dollar amount.
"Part of our discussion this week has been the importance of getting the current provider money out to providers right now, and adding money to that," Blunt said.
A healthcare analyst said that some industry observers are nervous that HCA Healthcare's blockbuster second quarter earnings report — the system reported $1.1 billion in profit — could hurt hospitals' argument on the Hill that they deserve more relief funding.
Legal experts have said that a failure to comply with the terms and conditions attached to the grants, which include reporting requirements, could result in potential False Claims Act liability.
Reps. Bill Pascrell (D-N.J.) and Katie Porter (D-Calif.) criticized HHS' decision to exempt providers receiving large grants from quarterly reporting requirements, citing a Modern Healthcare report. HHS did not make a formal announcement of the delay, beyond updating a frequently asked questions document on its website.
"There has been no substantive justification for delaying or waiving reporting
requirements for all or any group of providers. We insist HHS enforce the statutory reporting requirements tied to the PRF to ensure that American taxpayer dollars are spent appropriately," Porter and Pascrell wrote to HHS Secretary Alex Azar on June 23.