Where do you fall under HHS' newly issued guidance? You may not know what you think you know about Provider Relief Fund reporting, thanks to the much-delayed arrival of specific guidelines from the Department of Health and Human Services. Old guidance: CARES Act PRF fund are supposed to help providers replace revenue lost due to COVID-19. In a PRF Frequently Asked Question issued June 18, HHS said “the term ‘lost revenues that are attributable to coronavirus’ means any revenue that you as a health care provider lost due to coronavirus.” The FAQ continues, “providers can use Provider Relief Fund payments to cover any cost that the lost revenue otherwise would have covered, so long as that cost prevents, prepares for, or responds to coronavirus.” And “HHS encourages the use of funds to cover lost revenue so that providers can respond to the coronavirus public health emergency by maintaining health care delivery capacity, such as using Provider Relief Fund payments to cover,” the FAQ says. New guidance: Now, in its long-awaited new six-page guidance document on PRF reporting, HHS explains that it considers “lost revenues” a “negative change in year-over-year net patient care operating income.” And what is “patient care operating income,” you may ask? HHS defines it as “patient care revenue less patient care related expenses … net of the healthcare related expenses attributable to coronavirus.” After covering COVID-19-related expenses, “recipients may apply PRF payments toward lost revenue, up to the amount of their 2019 net gain from healthcare related sources” (emphasis added). In other words, providers can only use PRF funds for their “lost revenue” if their loss exceeds their figures from the previous year, says the guidance issued Sept. 19. For example: Consider a home health agency that had $5 million in revenues and a $300,000 profit in 2019, offers finance expert Dave Macke with VonLehman & Co. in Fort Wright, Kentucky. This year, its patient revenues drop by a million to $4 million. But thanks to greater efficiencies, the agency retains a $300,000 profit. Under the new guidance, it has no “lost revenues” to which it may apply PRF funds, even though its revenues have dropped by $1 million, Macke explains. What if you didn’t have a gain in the previous year, but a loss? “Recipients that reported negative net operating income from patient care in 2019 may apply PRF amounts to lost revenues up to a net zero gain/loss in 2020,” the new guidance instructs. In other words, PRF funds can only cover up to the amount you lost last year as “lost revenues.” For example: “If a program generated a $500,000 loss in 2019 and a $1,000,000 loss in 2020 as a result of the pandemic, the HHS [PRF] funds can only cover $500,000 of the loss (the delta between the 2 years),” explains accountant Adam Brigandi with accounting firm Cerini & Associates in Long Island, New York, in online analysis. HHS’ “position that providers must use a year-over-year net operating income (not revenue) comparison is a significant departure from HHS’ guidance over the past several months that providers can use any reasonable methodology to calculate lost revenues,” highlight attorneys Joe Geraci, Eric Weatherford, Jameson Sauseda, and Andrew Brenton with law firm Husch Blackwell in online legal analysis. “HHS has significantly modified the calculation of ‘lost revenues’ attributable to the COVID-19 emergency,” agree attorneys Alexis Finkelberg Bortniker, Monica Chmiel-ewski, Thuong Nguyen, and Anil Shankar with law firm Foley. “This is in stark contrast with a previous FAQ issued by HHS,” the attorneys underscore in online legal analysis. “PRF recipients who relied on this prior guidance will need to review and evaluate the effect of the modified definition of lost revenues on their use of PRF payments,” they warn. “This will be a surprise for some,” Macke expects — and most likely not a pleasant one. “This is not what providers were hoping for.” The cap on the net loss based on last year’s loss is “also a new change that springs from the HHS imposition of a ‘net operating income’ standard, instead of a true lost revenues calculation,” the Husch attorneys add. “It does, however, allow providers that lost money in 2019 to break even in 2020,” at least, they acknowledge. Mind Reporting Deadlines In addition to the new definition of lost revenues, the guidance also contains this new information: Note: The six-page guidance document is at www.hhs.gov/sites/default/files/post-payment-notice-of-reporting-requirements.pdf.