HHS Begins Phase 4 Provider Relief Fund Distribution, Updates Reporting Requirements for Mergers

The Department of Health & Human Services (HHS) recently announced the distribution of approximately $9 billion in CARES Act Provider Relief Fund (PRF) Phase 4 payments to Medicare, Medicaid, and CHIP providers. The average payment for small providers from this distribution is $58,000, for medium providers is $289,000, and for large providers is $1.7 million. HHS has already started facilitating payments and will continue to do so in 2022.

As part of the announcement, HHS also indicated a new reporting requirement for providers involved in recent mergers or acquisitions that have received Phase 4 or American Rescue Plan (ARPA) Rural payment program funds. Specifically:

  • If the Recipient’s Phase 4/ARP Rural payment(s) exceeds $10,000, the Recipient agrees to notify HHS of a merger with or acquisition of any other healthcare provider during the Payment Received Period within the Reporting Time Period (as defined in the PRF Post Payment Notice of Reporting Requirements). Providers who report a merger/acquisition may be more likely to be audited, consistent with an overall risk-based audit strategy.”

HRSA (the HHS agency implementing the PRF program) considers changes in ownership, mergers/acquisitions, and consolidations to be reportable events under this new requirement. If a provider that received a Phase 4/ARP payment indicates when they report on the use of funds that they have undergone a merger or acquisition during the applicable Payment Received Period, this information will be a component that is factored into whether an entity is audited.

The PRF Frequently Asked Questions (FAQs) were also supplemented in conjunction with the Phase 4 distribution. The newly added items cover a wide range of topics, including mergers and acquisitions, tax credits, guidance for providers that file bankruptcy petitions, and more.

NAHC encourages our members who have received PRF or ARP Rural funds to review the FAQs and other related reporting guidance, to ensure timely and accurate compliance with all criteria. We will continue to monitor and analyze PRF modifications as they develop.