The Department of Health and Human Services (“HHS”) announced a new round of Provider Relief Funds on October 1, 2020. This new Phase 3 of Provider Relief Funding will distribute a total of $20 billion to eligible providers. Eligible providers for this new Phase 3 include providers that have already received Provider Relief Fund payments as well as select groups of providers that were previously ineligible, such as those who began practicing in 2020. Eligible providers are invited to apply for the additional funding from October 5 – November 6, 2020. The announcement urges all eligible providers to apply early, indicating that the program may be administered on a first come first serve basis. The application will request financial data from providers that takes into account their current financial position. HHS will then decide whether the provider qualifies for an “equitable add-on payment.” Eligible providers should begin compiling the relevant financial data and be prepared to submit their applications as soon as practicable. The announcement’s specific eligibility requirements and payment methodology are included below.

Eligibility

HHS is making a large number of providers eligible for Phase 3 General Distribution funding, including:

1. Providers who previously received, rejected or accepted a General Distribution Provider Relief Fund payment. Providers that have already received payments of approximately 2% of annual revenue from patient care may submit more information to become eligible for an additional payment.
    
2. Behavioral Health providers, including those that previously received funding and new providers.
    
3. Healthcare providers that began practicing January 1, 2020 through March 31, 2020. This includes Medicare, Medicaid, CHIP, dentists, assisted living facilities and behavioral health providers.

Payment Methodology

All eligible providers will be considered for payment against the below criteria.

1. All provider submissions will be reviewed to confirm they have received a Provider Relief Fund payment equal to approximately 2 percent of patient care revenue from prior general distributions. Applicants that have not yet received Relief Fund payments of 2 percent of patient revenue will receive a payment that, when combined with prior payments (if any), equals 2 percent of patient care revenue.
    
2. With the remaining balance of the $20 billion budget, HRSA will then calculate an equitable add-on payment that considers the following:
   1. A provider’s change in operating revenues from patient care
   2. A provider’s change in operating expenses from patient care, including expenses incurred related to coronavirus
   3. Payments already received through prior Provider Relief Fund distributions.
       
3. Recipients of this funding will be required to sign an attestation and accept the Terms and Conditions.

HHS is expected to release additional information on the program in the coming days. Eligible providers should begin gathering the necessary information to apply for this additional funding. Nelson Mullins will be monitoring this development closely. If you have any questions or would like assistance in understanding how this new phase of Provider Relief Funding affects you, please contact Will Richmond or Hannah Cross, who contributed to the drafting of this Alert.