Home Health & Hospice Week

Don’t hang yourself with the rope HHS is giving you.

Whether you get to keep all your Provider Relief Fund payments or have to return some — or all — will likely depend on whether you can show you lost revenues due to COVID-19, but exactly how you can show that has been in flux. Once again, there’s another new answer.

On Jan. 15, the Department of Health and Human Services issued a new update in the ongoing saga of PRF lost revenue methodology. It affirms that either of two previously issued procedures for performing and documenting the calculation will be valid in PRF reporting, plus it adds a whole new process that comes with its own set of gray areas and resultant risks.

Oldest way: In June 2020, HHS issued guidance saying “the term ‘lost revenues that are attributable to coronavirus’ means any revenue that you as a health care provider lost due to coronavirus.” HHS said providers could use any reasonable method to calculate that, including comparing a projected budget with actual revenues.

Old way: In September 2020, HHS negated that guidance by defining “lost revenues” as a “negative change in year-over-year net patient care operating income” and specifying that “recipients may apply PRF payments toward lost revenue, up to the amount of their 2019 net gain from healthcare related sources” (see HCW by AAPC, Vol. XXIX, No. 36).

New way: The COVID-19 relief package signed into law Dec. 27 said the lost revenue calculations would go back to the June guidance, but the law was light on details. Now HHS specifies in a new PRF notice of reporting requirements issued Jan. 15 that providers have three options for calculating lost revenues:

1. the difference between 2019 and 2020 actual patient care revenue;
2. the difference between 2020 budgeted and 2020 actual patient care revenue. If recipients elect to use 2020 budgeted patient care revenue to calculate lost revenue, they must use a budget that was established and approved prior to March 27, 2020. Providers using 2020 budgeted patient care revenue to calculate the amount of lost revenues they may permissibly claim will be required to submit additional documentation at the time of reporting; or
3. any reasonable method of estimating revenue.

“Any reasonable method” may sound like a free pass on proving PRF costs, but it comes with its own set of risks, warns finance expert Dave Macke with VonLehman & Co. in Fort Wright, Kentucky. “What’s ‘reasonable’ to the government and what’s ‘reasonable’ to me may be two very different things,” Macke stresses to AAPC.

HHS goes into more detail on the “any reasonable method” option in the notice. “If a recipient wishes to use an alternate reasonable methodology for calculating lost revenues attributable to coronavirus, the recipient must submit a description of the methodology, an explanation of why the methodology is reasonable, and establish how the identified lost revenues were in fact a loss attributable to coronavirus, as opposed to a loss caused by any other source,” HHS says. Keep in mind that arguments could be made for the new Patient-Driven Groupings Model affecting home health agency revenues, experts warn.

Further, “all recipients seeking to use an alternate methodology face an increased likelihood of an audit by [the HHS Health Resources and Services Administration],” the notice warns. “HRSA will notify a recipient if their proposed methodology is not reasonable, including because it does not establish with a reasonable certainty that claimed lost revenues were caused by coronavirus.”

What happens next: “If HRSA determines that a recipient’s proposed alternate methodology is not reasonable, the recipient must resubmit its report within 30 days of notification using either 2019 calendar year actual revenue or 2020 calendar year budgeted revenue to calculate lost revenues attributable to coronavirus,” the notice spells out.

If you’re wondering whether to risk an audit by using your own methodology, you may want to look at the total size of your PRF payments, Macke offers. Usually, the higher the amount at stake, the higher your probability is of encountering an audit based solely on recovery potential, he says.

Reminder: Providers with $750,000 or more will automatically undergo a PRF audit, which HHS reconfirms in its latest documents.

Tip: As providers identify and compile their PRF costs and documentation, they should not stop at documenting the PRF amount they received, Macke urges.

For example, if an agency had $5 million in PRF payments, they should document $7 million in eligible costs and losses if they exist, Macke recommends. “That leaves room” for auditors to deny items but still be able to retain the PRF funds, he says. v

Note: The notice with the new lost revenue definition is at www.hhs.gov/sites/default/files/provider-post-payment-notice-of-reporting-requirements-january-2021.pdf.