HHS changes revenue calculation for keeping COVID-19 relief funds




, HHS changes revenue calculation for keeping COVID-19 relief funds

HHS once more has modified the principles concerning easy methods to doc Supplier Aid Fund grants and it may trigger complications for healthcare stakeholders.

HHS just lately launched reporting tips that modified how healthcare suppliers are purported to calculate misplaced income from the COVID-19 pandemic, complicating accounting for greater than$100 billion in grant funds.

Prior steerage from HHS had indicated that healthcare suppliers may calculate misplaced income by evaluating 2020 income with budgeted income or with income from 2019, however the brand new discover says suppliers have to make use of web working revenue as a substitute. The doc additionally places a cap on how a lot misplaced income suppliers can declare.

Each of those modifications are sending suppliers again to the drafting board as they determine easy methods to account for Supplier Aid Fund grants and insulate themselves from False Claims Act legal responsibility and different potential penalties.

Income figures would have been easy to report, consultants and accountants who work with suppliers mentioned, however web working revenue is a extra complicated calculation that takes bills into consideration.

“Once you begin including in all of those bills over course of the 12 months, you might be diluting what would have been a single metric. Will it at all times work out the identical means? No,” mentioned Polsinelli healthcare operations chair Colleen Faddick.

The steerage would additionally cap misplaced income suppliers can declare to their web 2019 achieve, or web zero if the supplier had a destructive web working revenue final 12 months.

The system limits suppliers to their 2019 monetary efficiency in the event that they wish to qualify for the grant funds to assist with misplaced income, Faddick famous.

“That is not how healthcare suppliers wish to function,” Faddick mentioned.

The web working revenue measure could possibly be a difficulty if a supplier just lately added a service line or opened a brand new unit that was anticipated to herald new income streams in contrast with final 12 months.

Suppliers had 90 days to resolve whether or not to maintain the funds, and steerage has regularly modified because the first funds have been distributed in April. HHS has recurrently up to date a continuously requested questions doc concerning the grants, together with a June 19 replace that mentioned misplaced income could possibly be calculating utilizing comparisons with budgeted income or 2019 income.

“We’re involved that the element that will likely be required to point out ‘a destructive change in year-over-year web working revenue,’ could also be very difficult and time-consuming for a lot of suppliers to calculate and, extra importantly, doc,” mentioned Butler Snow well being regulation apply group chief Mark Garriga.

Washington Council Ernst & Younger Principal Heather Meade mentioned using the online working revenue metric penalizes hospitals that took fast motion to chop prices as volumes plummeted.

“For those who shortly took motion to be steady, that’s going to weigh in opposition to you within the new system, however hospitals that allowed the bleeding to proceed can acquire extra grant funds,” Meade mentioned.

HHS may nonetheless launch new steerage to additional elaborate on the reporting course of, because the portal will not open till early 2021 and funds are nonetheless being distributed.

“It might not shock me if the 2021 rollout did not add one thing else to this,” Weaver and Tidwell Accomplice Anna Stevens mentioned.

Polsinelli legal professional Ross Sallade known as HHS’ choice to delay the opening of the portal from Oct. 1 to subsequent 12 months an “olive department” to provide suppliers extra time to determine the brand new reporting methodology.