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New HHS Provider Relief Fund guidance: What to know and do

November 24, 2020 / 1 min read

The new HHS Provider Relief Funds (PRF) FAQ covers capital purchases and changes in net patient service revenue that were due to third-party payor settlements. Here’s what you need to know. 

On Nov. 18, 2020, the U.S. Department of Health and Human (HHS) issued three new Frequently Asked Questions (FAQ). These clarified previous guidance related to the treatment of capital expenditures and changes in net patient service revenue that were due to third-party payor settlements.

What does this mean for your healthcare organization?

In previous FAQs, HHS indicated that healthcare providers could claim only the relevant depreciation amount for capital equipment purchased during the pandemic. Due to this not being a popular position, many healthcare providers submitted questions to HHS related to fully expensing capital purchases. In response, HHS has expanded the FAQ guidance on capital equipment and inventory and capital facility projects. The new guidance states that expenditures for capital equipment and inventory and facilities directly related to preventing, preparing, and responding to coronavirus may be fully expensed.

With the FAQ document, HHS provided the following examples of the types of expenditures that could be fully expensed:

The previous guidance also had healthcare providers questioning how to account for third-party payor settlements within net patient service revenue when calculating the difference between their 2019 and 2020 actual patient care revenue. Within the new guidance, HHS clarified that healthcare providers, when comparing lost revenue year-to-year, shall exclude from reporting of net patient revenue payments received or payments made to third parties relating to care not provided in 2019 or 2020.

What action should you take?

As you navigate the complexities of PRF funding, we’re here to help. Don’t hesitate to reach out. 

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