Most of you received the COVID Relief Money, in addition to many other grants or loans (i.e. the Payroll Protection, Accelerated Payments, SBA, etc). We have received many questions with regards to tracking of these “relief” monies coming in.
To speak globally first, we highly recommend that separate bank accounts are established for any loans received.
For all monies received associated with COVID relief, we are issuing a strong recommendation to create a new general ledger account for all COVID-19 related expenses to your organization.
Some guidance as to what to track:
- Create separate cost centers or other ways to segregate COVID-19 expenses from normal operating expenses.
- Track staffing related costs including, but not limited to:
- Contract Labor
- Additional staffing to care for higher acuity residents
- Additional staffing to provide in providing meals in resident rooms
- Additional staffing for infection control procedures
- Additional security costs and administration costs to enforce screening requirement for staff and visitors
- Additional wages in the form of “hazard pay” to get people to work
- Payroll tax and benefit related costs
- Additional costs related to staff testing and illness
- Childcare for workers whose schools have shut down and have nowhere for the children to go during the day.
- Extended leave pays for workers who get sick or their family gets sick (family leave act)
- Any purchase order for COVID-19 related items including, but not limited to:
- Additional over-the-counter medication. Most prescription medications should be covered by healthcare authority
- Masks, gowns, or other supplies
- Cleaning supplies
- Potential costs when residents/patients pass with no family available
- Additional costs for obtaining everyday supplies.
- Additional costs for staff related meals for those working and unable to leave the facility
- Communications related costs
- Additional costs for not being able to enter home for provided care
- Medically necessary clinical diagnostic laboratory tests
- Infection control related citations and fines.
- Increased re-hospitalization penalties
- Additional hospital visits that may lower the quality score
We strongly suggest you maintain all supporting documentation as appropriate to the underlying costs above (payrolls, checks, invoices and contracts).
How to treat this:
Regarding newly issued relief proceeds, we recommend the following:
- Providers will be paid via Automated Clearing House using the account information on file with UHG or the Centers for Medicare & Medicaid Services (CMS).
- The automatic payments will come to providers via Optum Bank with “HHSPAYMENT” as the payment description.
- Contact your bank to open a new account to house the relief funds. Call the bank account “COVID HHS RELIEF PROCEEDS” or some other easily identifiable name that indicates it is the COVID HHS funds.
- As is the case with the other COVID-19 loans, KEEP ACCURATE RECORDS OF THE USE OF FUNDS. It is imperative that accurate record keeping is maintained. Please see the outlined documentation requirements above.
- NOTE: Within 30 days of receiving the payment, providers must sign an attestation confirming receipt of the funds and agreeing to the terms and conditions of payment. Click here to sign the attestation and accept the Terms and Conditions
How should I account for the funds received?
- There are numerous accounting and financial reporting considerations applied to these funds.
- In order to easily track and report amounts received by HHS under the various COVID-19 related acts, we recommend establishing a separate general ledger account specifically for these receipts.
- While the funds are considered payments and not loans, a healthcare organization will need to ensure that it is complying or can comply with the terms and conditions attached to such funds, otherwise, they may be considered contingent and reported as deferred or unearned revenue until such terms and conditions are met.
- Once recognized as revenue, the presentation on the income statement will need to be determined and there are likely numerous options available.
To date we are unaware if these funds will be taxable. We await further guidance and will keep you posted.
PLEASE READ IN DETAIL REGARDING NEEDED ATTESTATION AND TERMS OF DOLLARS DEPOSITED:
We will provide updates at our nearest convenience as any other information becomes available.