Major Expansion of the use of HHS Phase 3 Stimulus Funds With a Fast Approaching Deadline!

Major Expansion of the use of HHS Phase 3 Stimulus Funds With a Fast Approaching Deadline!

As we reported several weeks ago, the US Department of Health and Human Services (“HHS”) made available an additional $20 billion in stimulus funds to healthcare providers on the frontlines of the coronavirus pandemic.  While it is still not clear how these funds will be distributed to applicants, it is clear that any eligible provider that missed the first two phases and didn’t receive the 2% allotment of their 2019 revenue will be first on line to receive Phase 3 funds.  The application for Phase 3 is more “streamlined” than the Phase 2 application, which is good as providers only have Until November 6th (11:59 EST) to get their Phase 3 application in.  As HHS is committed to providing resources to the diverse healthcare community, the Phase 3 funding will be open to the health care provider community, regardless of whether they accept Medicare or Medicaid payments.  This is a significant change from earlier rounds of funding.

HHS, under Phase 3, has opened up the pool of eligible applicants to include:

  • Behavioral Health Providers
  • Allopathic and Osteopathic Physicians
  • Dental Providers
  • Assisted Living Facilities
  • Chiropractors
  • Nursing Services and Related Providers
  • Hospice Providers
  • Respiratory, Developmental, Rehabilitative and Restorative Service Providers
  • Hospital Units
  • Residential Treatment Facilities
  • Laboratories
  • Ambulatory Healthcare Facilities
  • Eye and Vision Service Providers
  • Physician Assistants & Advanced Practice Nursing Providers
  • Nursing & Custodial Care Facilities
  • Podiatric Medicine & Surgery Service Providers

This updated listing of eligible providers and broad opening for all providers, regardless of prior or current Medicare or Medicaid acceptance, is new as outlined in a press release from the HHS on October 22, 2020, located here.  The HHS website, terms and conditions, and FAQs have still yet to be updated for this change.

In addition to the Phase 3 eligibility changes, in response to concerns raised, HHS changed how the relief payment for lost revenue will be calculated.  The original calculation looked at the negative change in year-over-year net patient care operating revenue (income less expenses) compared to the same quarter in the prior year.  HHS is amending the reporting instructions to define lost revenue as a negative change in year-over-year actual revenue from patient care related sources.  While the definition of lost revenue has become more beneficial for providers, the order of use has not changed.  Any HHS funds must be used as follows:

The HHS has also made clear that other funds, such as SBA Paycheck Protection Program Loans (PPP) will not prohibit a provider from obtaining these relief funds.  However, the HHS does indicate that no “double-dipping” is allowed, meaning these HHS Stimulus payments must cover costs that these programs did not reimburse.

If providers have any questions, they should feel free to reach out to us.

Adam Brigandi, CPA, MBA

Adam Brigandi, CPA, MBA

Senior Accountant

Adam is a staff auditor who works with both nonprofit and special education clients. His auditing experience allows him to assist in vital audit functions such as systems testing and analysis.