Medical groups and health lawyers are calling on the government to give hospitals more time and clarity as they hustle to report how they spent governmental pandemic assistance money by an approaching deadline.

The delta variant has hit an already overburdened health-care workforce hard, with hospitals losing money and staff leaving the industry at a time when they’re needed most.

The more than $120 billion distributed via the Provider Relief Fund supports those “on the front lines who have experienced lost revenues and expenses” due to the Covid-19 pandemic, a spokesperson for the Health Resources and Services Administration, part of the Department of Health and Human Services, said. 

But regulations around how the money would be distributed, spent, and accounted for have changed several times since the pandemic began. The revisions have been difficult to keep track of, even though some of the changes and increased flexibility have benefited providers, health lawyers said. 

HHS recently offered providers subject to a Sept. 30 reporting deadline a 60-day grace period as part of an announcement that the department would release $25.5 billion additional funds to providers.

The deadline used to be 30 days after a provider received payments, but in June, the HHS pushed it back to 90 days. While the HHS still recommends that hospitals comply with the Sept. 30 deadline, it will not penalize hospitals that don’t during the grace period.

The grace period, while helpful, still won’t solve the many problems providers are facing related to the pandemic assistance fund, said Claire Ernst, director of government affairs for the Medical Group Management Association.

“Elective procedures are starting to get canceled again,” Ernst said. “They’re losing staff that they can’t retain.” The reporting deadline “is just an additional burden to worry about and they’re just too busy trying to treat patients,” Ernst said.

Gray Areas

Providers including hospitals, nursing facilities, and children’s hospitals are eligible for pandemic assistance funding if they care for patients “with possible or actual cases of Covid-19,” and have expenses and lost revenues due to the pandemic, according to HRSA.

The providers that received more than $10,000 in one of four payment periods need to report how they spent their assistance funds, and how much revenue they estimate they lost due to the pandemic. Providers are subject to different deadlines based on when they received money, and providers receiving money in multiple payment periods need to report multiple times. Sept. 30 is the earliest deadline, which about 126,900 providers must meet because they received more than $10,000 from April-June 2020, an HRSA spokesperson said.

The current deadline is the result of prioritizing “maximum flexibility for recipients and strong program integrity and safeguards for the use of taxpayer dollars,” an HRSA spokesperson said.

How much time it takes a hospital to report depends on their size and how proactive they were about holding onto financial statements, said Mark Polston, a health-care partner at King & Spalding. Many hospitals that “were probably not ahead of the curb in setting up those accounting systems” are now “playing catch up trying to go back and determine what expenses they had and whether or not they fit into the coronavirus expense bucket or not,” he said.

Inputting the information into the portal itself should take just a few hours, said Jed Roebuck, a Chambliss Bahner & Stophel PC shareholder.

But preparing to report the information—including performing accounting work, consulting with legal counsel, and staying on top of changes in regulations—can take “hundreds of hours,” said Chad Mulvany, vice president of federal policy for the California Hospital Association.

That’s why the MGMA is advocating for extending the reporting deadline to March 2023. Collapsing the four separate deadlines into one cumulative date—the same date the last group of providers needs to report spending by—would save providers who received funding in multiple periods from having to report it for each period.

The guidelines have some “gray areas” which make it difficult to make sure providers are interpreting them the same way HHS will, Polston said.

For example, it can be difficult to figure out what justifies as a Covid-19-related expense. “If you need to purchase a ventilator in order to provide ventilating assistance to Covid patients, that’s an obvious expense relating to the coronavirus,” Polston said. Estimating how many mask or gown purchases were related to Covid-19 is harder.

HHS has a website with fact sheets, guides, and question and answers, as well as a provider support line for specific questions.

The HHS “is committed to helping providers understand the reporting requirements so that they may complete their reports successfully,” the HRSA spokesperson said.

Over It 

Providers could be audited after they report how they spent the money. Hospitals should “keep their receipts,” should they need to justify their methodology to an auditor, said Joanna Hiatt Kim, vice president of payment policy and analysis for the American Hospital Association.

Providers who fail to submit a report by the end of the grace period will have to return “relevant funds” within 30 days, the HRSA spokesperson said.

The grace period may help some providers who are still working on their reporting, or who have been impacted by “extreme and uncontrollable circumstances” such as Hurricane Ida, the AHA wrote in a Sept. 24 letter to HRSA Acting Administrator Diana Espinosa.

But announcing it so soon before the deadline isn’t likely to have much of an impact on most providers, Roebuck said.

What would help is more funding, Mulvany said. The $25.5 billion, while much appreciated, “doesn’t cover the need nationally.” Hospitals are paying inflated wages to keep staff, particularly nurses, which is becoming “unsustainable,” Mulvany said.

Hospital groups like the AHA are also advocating for more time to use their funding. The deadline to spend the money given out in the first round was June 30, but the AHA said that extending the deadline until the public health emergency ends would be more reasonable. 

Although the deadline has now passed, “it’s definitely not a done deal,” Hiatt Kim said. The AHA will continue advocating for an extension, she said.

For providers weary of being told that there are more changes they must absorb, even those that are beneficial, finishing up the filing will bring a sense of relief, Roebuck said.

“I think most folks are just over it,” he said.