In early August, the Department of Health and Human Services (HHS), announced plans to distribute approximately $5 billion to nursing home providers through the Provider Relief Fund (PRF) distribution. See our last client alert with more details.
Funds received are meant to be used to protect residents of nursing homes and long-term care facilities from the impact of COVID-19. The $5 billion distribution provided approximately $2.5 billion in upfront funding to support increased testing, staffing, and PPE needs that were distributed to providers in mid-August. Approximately $2 billion was used to create an incentive program with five monthly payment cycles based on quality performance to reward nursing homes for keeping new COVID-19 infection and mortality rates among residents down.
In early November eligible nursing facilities received the initial (first or four) Quality Incentive Payment (QIP). The first payment was broken down into two chunks from comparative data from the months of August to September based on infection rates reported. Eligible providers should also receive payment around the first week of December based on mortality rates reported.
HHS has now publicly posted the list of Quality Incentive Program “QIP”’s awarded to facilities. A complete list can be located here or on the HHS site under the “Distributions to Skilled Nursing Facilities/Nursing Homes” section. This list appears to include both the infection rate and mortality rate together.
NOTE: As per the Terms and Conditions: Provider Relief NF Infection Control Payment Terms and Conditions, these “quality and infection control” payments are “targeted” distribution payments, unlike what you received in “general distributions” from HHS. These monies should be booked as revenue as the expenses are incurred to specifically treat and prevent infection and reduce mortality rates. This money is not included in the reporting requirements issued and will be reported separately.
IMPORTANT: Timeline of funds received and how these funds should be tracked for accounting purposes:
General Fund Money- Deferred Revenue. Requirements to report how money was used on expenses and lost revenue related to COVID.
Targeted Fund Money – Book revenue as spent on expenses related to treating and testing COVID patients and the education or hiring of staff to prevent COVID. Not included in the requirements for reporting in the new year.
**NOTE: there is still more of these payments left to be distributed to skilled nursing facilities.
- April 10 – April 17 First round of Phase 1 General Distribution — General fund money (to be reported on early next year to show it was properly used) & $30 Billion-Medicare Fee-For-Service (all types of HC providers who are Medicare funding providers)
- April 24 Second round of Phase 1 General Distribution – General fund money (to be reported on early next year to show it was properly used) & $9.1 -Medicare Fee-For-Service billing providers (all types of HC providers who are Medicare funding providers) & $10.9 Billion available to Medicare Fee-For-Service billing providers
- May 22 Allocation for Skilled Nursing Facilities – General fund money (to be reported early next year to show it was properly used) & $4.9 Billion-certified Skilled Nursing Facilities (SNFs only)
- June 9 Phase 2 General Distribution & Distribution to Safety Net Hospitals – General fund money (to be reported early next year to show it was properly used) & $15 billion to eligible Medicaid, CHIP, and Dental providers (all types of HC providers) & $10 billion to Safety Net Hospitals
- August 7 Allocation for Nursing Homes $2.5 billion to nursing homes General fund money to SNFs (to be reported on early next year to show it was properly used)
- August 27 Distribution to Nursing Homes – Targeted fund money (to be spent on testing, and treating COVID patients only. Should be booked as revenue as the expense is incurred) & $2.5 billion to nursing homes to support increased testing, staffing, and PPE needs
- September 1 Phase 2 General Distribution for Assisted Living Facilities
- September 3 Nursing Home Incentive Payment Plans– Targeted fund money (to be spent on testing, and treating COVID patients only. Should be booked as revenue as the expense is incurred) & HHS announces details of $2 billion performance-based incentive payment distribution to nursing homes
- October 1 Announcement of Phase 3 General Distribution General fund money (to be reported on early next year to show it was properly used) – HHS announces $20 billion in new funding for providers on the frontlines of the coronavirus pandemic.
Previous Client Alerts:
- Additional HHS Funding for Skilled Nursing Facilities (8.10.2020 alert)
- First Round of HHS “Performance-Based” Payments Released (10.29.2020 alert)