Key Takeaways

  1. Compliance is Vital: Follow PRF and ARP reporting and auditing guidelines to stay out from under fines.
  2. Document Everything: Record everything accurately regarding COVID-19-related losses of income and expenses.
  3. Prepare Proactively: For seamless reporting and auditing, use internal controls, follow policies, and consult experts.

PRF and ARP Reporting and Audit Essentials

Are you prepared to meet the stringent reporting and audit requirements for the Provider Relief Fund (PRF) and American Rescue Plan (ARP)? Compliance with these programs is crucial for healthcare providers looking to avoid penalties and ensure the proper use of funds. With significant financial support on the line, understanding and adhering to the requirements is essential to maximize the benefits and protect your organization.

The PRF Reporting Portal is now open for Reporting Period 7 (RP7). Should you get PRF or ARP Rural payments totaling more than $10,000 between January 1 and June 30, 2023, you have to disclose fund use by September 30, 2024, at 11:59 p.m. ET.

Penalties will follow for non-compliance, but providers with extenuating circumstances can ask for a one-time extension. Those receiving more than $750,000 must go through compliance audits.

Overview of Provider Relief Fund (PRF) and American Rescue Plan (ARP)

The Provider Relief Fund (PRF) was created to assist healthcare providers during the COVID-19 pandemic. Through the Coronavirus Aid, Relief, and Economic Security (CARES) Act, the Department of Health and Human Services (HHS) distributed funds to qualified providers for healthcare-related expenses and lost revenues due to COVID-19 and to reimburse for testing and treating uninsured individuals with COVID-19. Over $134 billion in funds have been distributed through various phases of general, targeted, and American Rescue Plan (ARP) rural distributions.

With a total allocation of $178 billion, PRF payments are distributed in phases to eligible providers, ensuring that hospitals, clinics, and other healthcare facilities receive necessary financial assistance.

The American Rescue Plan Act of 2021 provides an additional $8.5 billion specifically for rural healthcare providers. This fund is intended to cover expenses and lost revenues due to COVID-19, with an emphasis on supporting underserved and rural communities. Understanding the ARP’s specific provisions and financial allocations helps providers maximize their benefits.

PRF and ARP Reporting Requirements

To maintain compliance with PRF and ARP standards, healthcare providers have to follow particular reporting rules. Focusing on expenses or lost income specifically linked to COVID-19, reports must provide thorough details of how the money was used. The Health Resources and Services Administration (HRSA) stipulates that providers need to submit accurate revenue information by the deadline.

PRF and ARP Audit Requirements

Auditing is a critical component of the PRF and ARP programs to ensure funds are used appropriately. Maintaining complete records and documentation of all income and expenses helps providers be ready for audits. Typical audit findings include discrepancies in revenue calculations and unsupported claims. Being proactive in understanding and preparing for these audits can help providers prevent possible problems and fines.

Providers who received over $750,000 PRF are also subject to a compliance audit. Commercial organizations have two options in fulfilling the audit requirement:

  1.  An audit in conformance with the requirements of 45 CFR 75 Subpart F (single audit), or
  2.  A financial audit of the award or awards in accordance with Government Auditing Standards.

Many organizations have been through their first compliance audit for the HHS awards. Below are some common compliance audit issues identified in these audits:

  1. Missing or incorrect information – Auditors are required to agree with certain line items of the HRSA PRF portal submission to the underlying detail. In certain instances, providers were unable to provide supporting details, or the supporting details provided did not agree with what was reported in the submission.
  2. Expense reporting – Expenses reported in the HRSA PRF portal submission as “Other PRF Expenses” should only include the PRF expenses for that reporting period. These should not be cumulative.
  3. Alternative Reasonable Methodology narrative – The narrative included for the lost revenue calculation did not support the calculation or did not include an explanation of why the methodology was reasonable for the circumstances and how the lost revenues were attributable to COVID-19.

As providers prepare for the next round of compliance audits, below is information to keep in mind:

  1. Ensure all HHS award information is readily available and supports amounts reported in the HRSA PRF portal.
  2. Ensure policies and procedures surrounding the funding are documented and accurately depict the use of the funds and the controls in place over the funds.
  3. Review the related compliance requirements. The OMB releases a compliance supplement that details the compliance requirements for the funds. Providers should review these to gain a better understanding of the testing to be performed as part of the compliance audit.

Common Challenges and Solutions

Providers often face challenges such as complex reporting requirements and stringent audit procedures. Solutions include:

  • Implementing robust internal controls to track fund usage.
  • Regularly reviewing compliance guidelines.
  • Seeking professional assistance for accurate reporting and audit preparation.
  • Learning from real-world case studies where providers successfully navigated the reporting and auditing process.

Key Resources and References

To assist providers, several valuable resources are available:

Ensuring Compliance with Provider Relief Fund and American Rescue Plan Requirements for Healthcare Providers

Compliance with the Provider Relief Fund and American Rescue Plan reporting and auditing requirements is essential for healthcare providers. Providers can ensure proper fund utilization and avoid potential penalties by understanding these requirements, maintaining accurate records, and utilizing available resources. Staying informed and proactive in compliance efforts will help providers maximize the benefits of these vital financial support programs.

HHS continues to release updated frequently asked questions to assist providers in reporting and understanding the audit requirements for the awards. Providers are urged to continue to monitor the HHS website for updates.

Is your organization fully prepared for upcoming audits?

LBMC has a dedicated PRF team available to assist organizations with reporting and compliance audits. Please reach out to our team to ensure your organization meets the necessary standards and maximizes the benefits of these financial support programs.

Content provided by LBMC’s Courtney Bach and Laura McGregor

Courtney Bach is a Shareholder in the Audit division of LBMC, focusing primarily on the healthcare industry. She can be reached at courtney.bach@lbmc.com or 615-309-2481.

Laura McGregor is a Shareholder in the Audit division of LBMC, focusing primarily on the healthcare industry. She can be reached at Laura McGregor laura.mcgregor@lbmc.com or 615-309-2289.