HHS Issues Clarification on Reporting Depreciation and Payments Related to Prior Periods for Provider Relief Fund Purposes

From the American Hospital Association (AHA)

The U.S. Department of Health and Human Services (HHS) issued two important clarifications related to Provider Relief Fund (PRF) reporting.

First, HHS had previously stated that providers could claim only the value of depreciation for COVID-19-related capital purchases with useful lives of more than 12 months. However, at the AHA’s urging, the agency today stated that expenses for capital equipment, facilities projects and inventory may be fully expensed in cases where the purchase was directly related to the prevention, preparation for and response to the SARS-CoV-2 coronavirus. HHS provides several examples of such purchases, including:

  • upgrading heating, ventilation and air conditioning systems to support negative pressure units;
  • retrofitting COVID-19 units;
  • enhancing or reconfiguring intensive care unit capabilities;
  • leasing or purchasing temporary structures to screen and/or treat patients; and
  • leasing permanent facilities to increase hospital capacity.

Second, HHS clarified that providers’ reporting of net patient revenue should NOT include any payments received from, or any payments made to, third parties that relate to care not provided in 2019 or 2020. The AHA had raised concerns with HHS about including in hospital reporting any Medicaid payments that have been made to settle years-old legal disputes over the program’s construction.

The AHA sent an alert to the field today on these, and other PRF advocacy issues. We will continue to encourage Congress to address our outstanding concerns.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act and Paycheck Protection Program and Health Care Enhancement Act included $175 billion in the Public Health and Social Services Emergency Fund to reimburse health care providers for health care-related expenses or lost revenues not otherwise reimbursed that are attributable to COVID-19. In order to accept these funds, recipients agreed to Terms & Conditions, which require compliance with reporting requirements as specified by HHS.

Further Questions
If you have questions, please contact AHA at 800-424-4301.