HHS Clawing Back Funds from Providers Who Did Not Comply with PRF Terms

By: Emily H. Lineweaver

As reported by Bloomberg Law, the Department of Health and Human Services (HHS) is clawing back $100 million in funds from health care providers who did not comply with the reporting requirements attached to the Provider Relief Fund (PRF) payments they received to assist them in combatting the COVID-19 pandemic. According to the report, HHS sent letters to physician practices and clinics on March 10, 2022, putting them on notice that they were not in compliance with the agency’s reporting requirement and therefore had 30 days to return the funds, leaving some providers having to return “anywhere from $30,000 to $250,000.”

A fact sheet issued by the Health Resources and Services Administration (HRSA) states that providers that receive and keep PRF payments agree to the terms and conditions of the payments, which includes the requirement to report back to the agency how the funds were used if a provider received one or more payments in a “Payment Received Period” that, in the aggregate, exceeds $10,000. Providers that do not submit a report by the reporting deadline for the applicable payment period will be considered non-compliant. HRSA will then notify the provider of their non-compliant status and instructions on how to rectify it, if applicable. “All non-compliant providers subject to enforcement actions will receive an official notice indicating that HRSA is seeking repayment of all PRF payments for the applicable reporting period.” Providers will then have 30 days after receiving the “Final Notice of Reporting Non-Compliance” to return the payments in full. In addition, providers who do not come into compliance, will be excluded from Phase 4 funding.

The “Post-Payment Notice of Reporting Requirements” was released on June 11, 2021 and gave providers that received payments exceeding $10,000 during the first payment period (April 10, 2020 to June 30, 2020) until September 30, 2021 to report use of the funds. It warned that if a report was not submitted, the provider would be considered “out of compliance with payment Terms and Conditions and may be subject to recoupment.”

In a statement to Bloomberg Law, HRSA said, “The legislation that authorizes the PRF requires that funds be used for COVID-related revenue loss and expenses. Providers must report on how they used the funds to demonstrate they complied with the law and the terms and conditions of their payment,” a requirement it says “has been in place since the beginning of the program.” According to the report, “HRSA reminded providers of the reporting requirement through email, mail, ‘outreach to national organizations and social media.’”

On March 31, 2022, the American Medical Association and 31 other medical groups sent a letter to HRSA urging it “to reopen the Period 1 reporting window for at least 60 days and engage in a targeted campaign to reach those who have yet to comply,” explaining that small and rural physician practices have been particularly impacted by HRSA’s potential recoupment of funds, and offered the following reasons for delay in required reporting:

  • Practices reported they were not contacted about the requirement to report and were thus unaware of the deadline;
  • Medical and administrative staff contracted COVID-19 or were acting as a caregiver and, therefore, were out of the office which caused them to miss the reporting deadline; and
  • Staffing challenges and turnover resulted in the practice’s point of contact no longer being affiliated  with the practice.

The medical groups offered to assist HRSA in contacting those physician practices that have not yet reported in order to help bring them into compliance.

Providers that received PRF payments exceeding $10,000 during the second payment period (July 1, 2020 to December 31, 2020) had until March 31, 2022 to submit their reports on how the funds were used. Providers that received PRF payments exceeding $10,000 during the third payment period (January 1, 2021 to June 30, 2021) have until June 30, 2022 to use the funds, and are required to submit a report on how the funds were used starting July 1, 2022, with a deadline to submit by September 30, 2022.  For more information on reporting deadlines and how to submit a report, click here.

Emily H. Lineweaver
Emily Lineweaver is a member of the Firm’s Health Care Service team and concentrates her practice in the areas of health care and related litigation. Read More