The second FAQ addressed the issue of taxation for tax-exempt organizations. The Department of Health and Human Services (HHS), through the Health Resources and Services Administration (HRSA), today announced more than $413 million in Provider Relief Fund (PRF) payments to more than 3,600 providers across the country. As a result of the CARES Act, the Provider Relief Fund (PRF) was created to reimburse eligible health care providers for increased expenses or lost revenue attributable to COVID-19. All recipients of Provider Relief Fund payments are required to comply with reporting requirements issued by the U.S. Department of Health and Human Services (HHS). Approximately $11 billion in payments have been released as of the end of January 2022. PRF funds are includable in gross income. However, providers are not required to submit that documentation when reporting. Some Terms and Conditions relate to the provider's use of the funds, and thus they apply until the provider has exhausted these funds. If a provider that sold a practice that was included in its most recent tax return gross receipts or sales (or program services revenue) figure can attest to meeting the Terms and Conditions, it may accept the funds. HHS also deleted a prior FAQ . Instructions for returning any unused funds. To return any unused funds, use the Return Unused PRF Funds Portal. If the health insurer is not willing to do so, the out-of-network provider may seek to collect from the patient out-of-pocket expenses, including deductibles, copayments, or balance billing, in an amount that is no greater than what the patient would have otherwise been required to pay if the care had been provided by an in-network provider. But if the transaction is an asset purchase (whether for some or all of the Provider Relief Fund recipient's assets), then the original recipient must use the funds for its eligible expenses and lost revenues and return any unused funds to HHS. Read our analysis and reports on the landmark Supreme Court sales tax case, and learn how it impacts your clients and/or business. No. Recipients (both non-federal entities and commercial organizations) of the General and Targeted Distributions of the Provider Relief Fund are subject to 45 CFR 75 Subpart A (Acronyms and Definitions) and B (General Provisions), subsections 75.303 (Internal Controls), and 75.351-.353 (Subrecipient Monitoring and Management), and Subpart F (Audit Requirements). Tax treatment of COVID-19 Homeowner Relief Payments Clarified; Federal Income Tax Consequences of Receiving Assistance from a State Homeowner Assistance Fund program (National Housing Law Project) . The answer depends on the status of the TIN that received the PRF payment. What other programs can help me? As we continue to make progress in defeating COVID-19, its important to keep supporting our providers with the resources they need so we can all build back better and healthier than before., Health care providers are doing critical work on the frontlines of the fight against COVID-19, said HRSA Administrator Carole Johnson. Providers that received funds in calendar year 2021 have through December 31, 2022 to incur eligible expenses and may apply the payment to lost revenues incurred since January 1, 2020. HRSA published an updated Provider Relief Fund (PRF) Distributions and American Rescue Plan (ARP) Rural Distribution Post-Payment Notice of Reporting Requirements (PDF - 176 KB) on October 27, 2022. Updated April 7, 2020 The Department of Health and Human Services on April 10 began distributing $30 billion in funds from the new $100 billion Public Health and Social Services Emergency Fund created by the CARES Act. May a health care provider that receives a payment from the Provider Relief Fund exclude this payment from gross income as a qualified disaster relief payment under section 139 of the Internal Revenue Code (Code)? The federal Coronavirus Aid, Relief and Economic Security (CARES) Act provided Economic Impact Payments of $1,200 for qualifying individuals and $2,400 for qualifying married couples, with an additional $500 per dependent child. By attesting to the Terms and Conditions, the recipient certifies that it will not use the payment to reimburse expenses or losses that have been reimbursed from other sources or that other sources are obligated to reimburse. Start my taxes Already have an account? Additional reporting information will be forthcoming for impacted providers. Here's the core problem: The CARES Act . HHS will review each request for correction on a case-by-case basis and may determine that a previous payment be amended to align with the updated data. Updated in line with the Tax Cuts and Jobs Act, the Quickfinder Small Business Handbook is the tax reference no small business or accountant should be without. accounting firms, For Providers that have Provider Relief Fund payments that they cannot expend on allowable expenses or lost revenues attributable to coronavirus by the Period of Availability that corresponds to the Payment Received Period are required to return such funds to the federal government. Finds that the U.S. Department of Health and Human Services put its “thumb on the scale” On Monday February 8, a judge in the Eastern District of Texas again rejected . A payment to a business, even if the business is a sole proprietorship, does not qualify as a qualified disaster relief payment under section 139. For additional information, visitwww.hrsa.gov/provider-relief. Those providers who had previously received funding but not the full 2% of patient revenue in assistance were also eligible to reapply for more funds and could receive up to 2% of patient revenue. However, an out-of-network provider delivering COVID-19-related care to an insured patient may not seek to collect from the patient out-of-pocket expenses, including deductibles, copayments, or balance billing, in an amount greater than what the patient would have otherwise been required to pay if the care had been provided by an in-network provider. In recent months, efforts were made by organizations including the AHA, as well as Members of Congress to . HHS does not have plans to include additional data fields in thepublic listof providers and payments. governments, Explore our Generally, if the applicable reporting period for the funds has not closed and the provider believes that they have returned an amount greater than what was owed, HRSA will refund the provider the erroneously returned amount. Unless the payment is associated with specific claims for reimbursement for COVID-19 testing or treatment provided on or after February 4, 2020 to uninsured patients, under the Terms and Conditions associated with payment, providers are eligible only if they provide or provided after January 31, 2020, diagnoses, testing or care for individuals with possible or actual cases of COVID-19. If, as a result of the sale of a practice/hospital, the TIN that received a Provider Relief Fund payment did not provide diagnoses, testing, or care for individuals with possible or actual cases of COVID-19 on or after January 31, 2020, the provider must reject the payment. The Provider Relief Fund Terms and Conditions require that recipients be able to demonstrate that lost revenues or expenses attributable to coronavirus, excluding expenses and losses that have been reimbursed from other sources or that other sources are obligated to reimburse, meet or exceed total payments from the Provider Relief Fund. The limitation only applies to the rate of pay charged to Provider Relief Fund payments and other HHS awards. Phase Three targeted providers not previously receiving distributions either because they were new or had not received the distribution because they were behavioral health providers not previously included. Explore all In these circumstances, the Provider Relief Fund money does not transfer to the buyer, however, buyers in these circumstances will be eligible to apply for future Provider Relief Fund payments. In addition, the terms and conditions of the PRF payments incorporate by reference the obligation of recipients to comply with the requirements to maintain appropriate financial systems at 75.302 (Financial management and standards for financial management systems) and the requirements for record retention and access at 75.361 through 75.365 (Record Retention and Access). Receive the latest updates from the Secretary, Blogs, and News Releases. Holland & Hart, 800 W Main Street, Suite 1750, Boise, ID 83702. phone: 208-383-3913. Step 1: Preview the form, then click "Continue." Currently, the AOA is working to ensure past and future HHS Provider Relief Funds are not treated as taxable income, and potential legislation to address this matter is forthcoming. If a bankrupt recipient is liquidated, it must similarly use the funds for its eligible expenses and lost revenues and return any unused funds to HHS. On Wednesday, HHS is launching an enhanced Provider Relief Fund Payment Portal that will allow eligible Medicaid and CHIP providers to report their annual patient revenue, which will be used as a factor in determining their Provider Relief Fund payment. Brian is co-author of the AAAs Medicare Reference Manual for Ambulance, as well as the author of the AAAs HIPAA Reference Manual. to be considered an eligible expense but the costs must be incurred by the end of the Period of Availability. When notifying HRSA about a bankruptcy, please include the name that the bankruptcy is filed under, the docket number, and the district where the bankruptcy is filed. If a Provider Relief Fund recipient has filed a bankruptcy petition or is involved in a bankruptcy proceeding, federal financial obligations will be resolved in accordance with the applicable bankruptcy process, the Bankruptcy Code, and applicable non-bankruptcy federal law. The IRS has made clear that these state and local grants to businesses are taxable income. If governments use Fund payments as described in the Fund Guidance to establish a grant program to support businesses, would those funds be considered gross income taxable to a business receiving the grant under the Internal Revenue Code (Code)? This funding was used to reimburse providers, including pharmacies, for lost revenue or expenses as a result of the COVID-19 pandemic. Aprio, LLP 2023. Phase 4 payments reimburse smaller providers for a higher percentage of losses during the pandemic and include bonus payments for providers who serve Medicaid, Children's Health Insurance Program (CHIP), and Medicare beneficiaries. You must submit this information toPRFbankruptcy@hrsa.gov. For the purposes of the salary limitation, the direct salary is exclusive of fringe benefits and indirect costs. 1 This alert is limited to PRF payments under the General Distribution, High Impact Relief Fund Payments, Rural Provider Relief Fund Payments, and Skilled Nursing Facility Relief Fund. Additionally, expenditures to prevent, prepare for, and respond to coronavirus may include those incurred expenses necessary to maintain health care delivery capacity by the recipient or to increase health care delivery capacity in the future as informed by community health needs. Please refer to CMSFAQs- PDF (PDF - 1 MB)on how Provider Relief Fund payments should be reported on cost reports. The payment is considered received on the deposit date for automated clearing house (ACH) payments, or the check cashed date for all other payments. Will I receive a Form 1099? "Recipients of Provider Relief Fund payments do not need to submit a separate quarterly report to HHS or the Pandemic Response Accountability Committee. If you have previously established an account with UnitedHealth Group and elected to receive electronic copies of documents and notices, you will not receive a mailed copy. HRSA administers both the PRF and the Uninsured Program, as well as the COVID-19 Coverage Assistance Fund. . The salary limitation is based upon the Executive Level II of the Federal Executive Pay Scale. If you affirmatively attested to a Provider Relief Fund payment already received and later wish to reject those funds and retract your attestation, you may do so by calling the provider support line at (866) 569-3522; for TTY dial 711. If a provider receives a payment that is greater than expected and believes the payment was made incorrectly, the provider should contact the Provider Support Line at 866-569-3522 (for TYY, dial 711) and seek clarification. Phase Two targeted Medicaid, CHIP, and dental providers, including assisted living facilities. Providers must follow their basis of accounting (e.g., cash, accrual, or modified accrual) to determine expenses. Are provider relief funds (PRF) taxable? $10 billion set aside for additional EIDL, tax changes. HHS has made other PRF distributions to a wide array of . The U.S. Department of Health and Human Services (HHS) has extended the deadline for Medicaid and Children's Health Insurance Program (CHIP) providers to apply for the CARES Act Provider Relief Fund (PRF). No. For projects that are a bundle of services and purchases of tangible items that cannot be separated, such as capital projects, construction projects, or alteration and renovation projects, the project costs cannot be reimbursed using Provider Relief Fund payments unless the project was fully completed by the end of Period of Availability associated with the Payment Received Period. The CRF provides $150 billion in aid for state, county and municipal governments with populations . Loss before income taxes (20,561 ) (15,155 ) (68,904 ) (40,012 ) Income tax expense (benefit) 57 (8,725 ) (1,766 ) . The IRS and HHS also clarified that healthcare providers that are tax exempt under Section 501(c) of the Code generally will not be subject to unrelated business income tax on the Relief Funds unless the funds were used for expenses or lost revenue attributable to an "unrelated trade or business," as defined in Section 513 of the Code. Health and Human Services (HHS) chose to have the PRF administered by the Health Resources and Services Administration (HRSA). Aprios Professional Services team is available to address your questions about the relief fund and will continue to provide updates as they become available. Late on Friday evening (July 10, 2020) and less than a week before the looming July 15, 2020, tax deadline, the Department of Health and Human Services (HHS) finally issued guidance. The Provider Relief Fund provisions of the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act") created a $100 billion fund to reimburse eligible health care providers for health care-related expenses or lost revenues attributable to the COVID-19 pandemic. In order to be able to report on the use of funds, a provider must contact the Provider Support Line at (866) 569-3522 (for TTY, dial 711) to request a change to their attestation from rejected to accepted. Once the attestation status has been updated in the attestation portal, the Provider Relief Fund Reporting Portal will subsequently be updated to accurately reflect the kept payment that the provider is required to report on during the applicable reporting period. View a state-by-state breakdownof all ARP Rural payments disbursed to date. Advocacy Blog Tax & Finance. technology solutions for global tax compliance and decision Provider Relief Fund payments that were made incorrectly, or exceed lost revenues or expenses due to coronavirus, or do not otherwise meet applicable legal and program requirements must be returned to HHS, and HHS is authorized to recover these funds. Generally, if you're are not tax exempt. A: Generally, no. Failure by a provider that received a payment to comply with any term or condition can result in action by HHS to recover some or all of the payment. In line with the Terms and Conditions, funds may not be used to reimburse expenses or losses that have been reimbursed from other sources or that other sources are obligated to reimburse, which include, but is not limited to, Medicare, Medicaid, and CHIP. $10 billion set aside for additional EIDL, tax changes. The HHS funds you receive will be taxable to you. The Terms and Conditions do not impose any limitations on the ability of a provider to submit a claim for payment to the patient's insurance company. HHS will not issue a new payment to a provider that received and then subsequently submitted a full or partial return of a payment, using either the attestation portal or Pay.gov, if the rejected payment and potential new payment are within the same distribution. The parent organization may allocate the Targeted Distribution to any of its subsidiaries that are eligible health care providers in accordance with the Coronavirus Response and Relief Supplemental Appropriations Act. Phase One was a general allocation to those providers billing Medicare Fee-for-Service and distributed quickly with no application necessary and the first distribution beginning on April 10, 2020. Yes, in accordance with the Coronavirus Response and Relief Supplemental Appropriations Act. It is unclear, however, whether such "clarification" will result in automatic repayment or recoupment of excess funds received, or whether providers who received more than $10,000 in Relief Fund payments may continue to hold "excess" funds until HHS's final Relief Fund reporting deadline on July 31, 2021. shipping, and returns, Cookie The Coronavirus Aid, Relief, and Economic Security Act (CARES) was signed into law March 27, 2020. In particular, all recipients will be required to substantiate that these funds were used for health care-related expenses or lost revenues attributable to coronavirus, and that those expenses or losses were not reimbursed from other sources and other sources were not obligated to reimburse them. customs, Benefits & The provider may be considered for future distributions if it meets the eligibility criteria for that distribution. A. PRF payments received in the first half of 2022 can be used until June 30, 2023. HHS provider relief funds 2 (1,882 ) Adjusted operating cash flow (Non-GAAP) . tax, Accounting & . financial reporting, Global trade & If the current TIN owner has not yet received any payment from the Provider Relief Fund, it may still receive funds in other distributions. Provider Relief Fund payments have played a key role in the nationwide response to COVID-19, helping health care providers prevent, prepare for, and respond to the coronavirus. Yes. If the provider has already deposited the check, mail a refund check for the full amount, payable to "UnitedHealth Group" to the address below via United States Postal Service (USPS); mailing services such as FedEx and UPS cannot be used with this PO box. HHS has posted apublic list of providers and their paymentsonce they attest to receiving the money and agree to the Terms and Conditions. The HHS Provider Relief Fund payments data is displayed in an interactive map, state-summary table and in an interactive details table. If a Reporting Entity that received a Phase 4 General payment indicates when they report on the use of funds that they have undergone a merger or acquisition during the applicable Payment Received Period, this information will be a component that is factored into whether an entity is audited. This amended guidance is in response to the Coronavirus Response and Relief Supplemental Appropriations Act (Act). The IRS further indicated that this holds true even for businesses organized as sole proprietorships. The IRS further indicated that this holds true even for businesses organized as sole proprietorships. ARPA Funds for HCBS Providers ARPA Funds for . The Provider Relief Fund Terms and Conditions and applicable laws authorize HHS to audit Provider Relief Fund recipients now or in the future to ensure that program requirements are/were met. As required by the Terms and Conditions, control and use of the ARP Rural payment must be delegated to the provider associated with the billing TIN that was eligible for the ARP Rural payment. HHS reserves the right to audit Provider Relief Fund recipients now or in the future, and may pursue collection activity to recover any Provider Relief Fund payment amounts that have not been supported by documentation or payments not used in a manner consistent with program requirements or applicable law. The parent organization may allocate the Targeted Distribution to any of its subsidiaries that are eligible health care providers in accordance with the Coronavirus Response and Relief Supplemental Appropriations Act. If a provider chooses to retain the funds, it must attest that it meet these terms and conditions of the payment. 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