Those facilities are still waiting for the money, a slice of $1.1 billion the state received from the federal Rescue Plan. State lawmakers required that at least 80% of the $30 million be “dedicated to direct care workers,” according to the House Fiscal Office. The money was set to be distributed among the state’s more than 80 nursing homes according to each facility’s 2020 Medicaid patient census.

More than 9 in 10 nursing homes in Rhode Island are losing money, with 87% of them at “financial risk,” according to a March 2022 CliftonLarsonAllen report.

Vincent Marzullo, a former state AARP president who sits on the board of the Senior Agenda Coalition of RI, was outraged at the delay, according to local media.

“It’s extremely troubling that the state administration seems not to have any urgency and/or concentrated attention to the well-being and capacity demands of our nursing homes, which have struggled all during this pandemic,” he wrote in an email.

“The owners/operators have had to increase care hours, obtain more protective equipment, increase wages, and in many cases change their business model with the promise of receiving financial aid back to July 1.”

State officials are finalizing the necessary paperwork to send checks to the nursing homes, said Derek Gomes, a spokesperson for the state’s Pandemic Recovery Office. Gomes said the US Treasury Department demands “financial and key performance indicator reporting” for ARPA funds spent by states, and said it takes time “to ensure that all US Treasury requirements will be met.”

Gomes said he expects the state to send the money before the end of the year.

Audits will run in waves over the next two years, but there are key steps providers can take to keep the reporting and auditing process less stressful, experts emphasize.

First and foremost, document everything related to COVID-19 expenses, Brian Lee, a partner in Alston & Bird’s Healthcare Group, told McKnight’s Long-Term Care News. Better, tie the documentation to the guidance that existed at the time of any spending decision. He said it’s a logical connection to what you were doing and when you did it in relation to the requirements of the program. 

“That’s an important piece from a defensive posture,” said Lee.

Many PRF recipients have never received such a large amount of government funding before, said Christopher J “CJ” Frisina, an attorney in Lee’s group who works with healthcare providers and suppliers in responding to inquiries from HHS and its sub-groups such as the OIG.

“There will be an intense level of scrutiny on reporting,” he said. “The financial team is the one that’s going to be hit hardest by this and it’s nice to have institutional knowledge. Some organizations will have made mistakes and need to respond and fix their processes. Others may learn they have used funds inappropriately and will need to return them.”

PRF funds will end in the quarter that the public health emergency ends, the attorneys said. Many think that will be in April 2023, so because audits are for every fiscal year a provider topped $750,000 in COVID-related expenses and revenue loss, these audits could continue into 2024.

Quality team needed

Facilities have to hire their own auditor. Lee and Frisina said providers should make sure to question potential auditors on their experience level with the single audit process.

“The best way to not stress is to have a team,” Lee said. “The entities we’ve worked with that have one person and one person alone usually require the most help and that’s for a number of reasons. One, there are no redundancies in place. It’s really hard to ask someone to do what presumably was some other job other than PRF and then to also take on the entirety of PRF in addition to that. 

“Second, we’ve seen in the last year, year and a half, the great resignation from the healthcare industry and the c-suite is not insulated from that. So when you have one person doing this and that person retires, all the institutional knowledge goes out the door along with him or her.”

The best guidance for facilities is outside counsel, said the duo. That ensures someone is keeping tabs on changing rules and requirements, providing information and keeping facilities on deadlines. 

“Make sure you already have some idea of where they’re going to go, some idea of what’s required of you whether that be being able to support an expenditure or your lost revenue calculation is correct so that when it’s asked you can just grab it,” Frisina said.

“It isn’t a requirement that you’re able to respond to an auditor’s questions quickly to get the documentation, but the faster you can do that, it puts that impression in their mind that this is a facility that has its ducks in a row and has the internal controls that are ready to go.”

If there is a finding that could result in a dispute, the earlier you can resolve the finding the better off you are, Lee said, because it saves money and raises the chance of resolving instead of with a long legal process. Resolving means finding an administrative solution to any audit dispute before it heads to federal court, said Lee.

“In essence, try to work it out with Health Resources Service Administration before it escalates any further,” said Lee.

The federal government is delivering $560 million in Provider Relief Funds to COVID-impacted healthcare providers starting this week. 

The Department of Health and Human Services announced on Thursday the additional payments are part of the Phase 4 general distribution and will be awarded to more than 4,100 providers this week. 

Overall, the agency has doled out about $11.5 billion in Phase 4 payments to more than 78,000 providers. Prior to this, HHS in late January made an additional $2 billion in Provider Relief Funds available to help with COVID-related expenses.

Approximately 86% of all Phase 4 applications have now been processed, and remaining applications will continue to be processed throughout early 2022, according to the agency.  

“Provider Relief Funds have been a lifeline for healthcare providers across the country,” HHS Secretary Xavier Becerra said in a statement Thursday. “From providing life-saving care to tackling workforce challenges, these funds will help many healthcare facilities weather the pandemic’s continued impact.”

Phase 4 payments also reimburse smaller Medicare and Medicaid providers for their lost revenues and increased expenses at a higher rate compared to larger providers.

The latest distribution announcement, however, isn’t a new infusion for long-term care, as was requested by the American Health Care Association/National Center for Assisted Living earlier this week in a letter to Congress. The association referred back to its letter following Thursday’s distribution announcement. 

The association requested that upcoming appropriation bills replenish the Provider Relief Fund with $20 billion allocated specifically to long-term care — $10 billion for skilled nursing and $10 billion for assisted living facilities.

“More than half of nursing homes were limiting new admissions in recent months — at a time when overwhelmed hospitals needed our assistance to free up precious beds due to the Omicron surge,” Mark Parkinson, AHCA/NCAL president and CEO, wrote. “However, with your help, healthcare providers, including those in long-term care, can access key tools available to help respond to this unprecedented challenge.”

Skilled nursing facilities that have received payments through the Provider Relief Fund would have until the end of the COVID-19 pandemic to report how they used the emergency aid under a new proposal. 

The legislation, dubbed the Provider Relief Fund Improvement Act, was introduced Thursday by Sens. Susan Collins (R-ME) and Jeanne Shaheen (D-NH). It aims to strengthen support for providers by delaying “complex PRF reporting requirements” until after the public health crisis, the senators said. The current reporting period is open through March 31.

In addition to extending the current reporting and use-of-funds deadlines until the end of the pandemic, it would ensure that workplace safety improvements are an allowed use of PRF dollars. 

It also would direct the Health Resources and Services Administration to distribute any funds remaining in the PRF by either the end of the pandemic or March 31, whichever comes first, and create an application process for certain providers to receive funds returned in compliance with previous deadlines. 

PRF: Use-of-funds 

The bill would serve as “a great help” to long-term care providers by allowing the reporting of qualifying expenditures and lost revenues over the entire course of the pandemic, according to Mark Reagan, the managing shareholder of Hooper, Lundy & Bookman, P.C.

The proposal would alleviate the problem of having to meet the “artificial deadlines” established by HRSA for reporting, as well as the use-of-funds and the inevitable inequities that follow, he said. 

“This is particularly the case for SNFs, which received significant general and targeted distributions early on in the pandemic but have continued to sustain greater expenditures and losses beyond the deadlines established by HRSA,” Reagan told McKnight’s Long-Term Care News Friday. 

“No one could have predicted the twists and turns of the pandemic and limiting the reporting and ‘use-of-funds’ to particular timeframes to the sequence of distributions does not fairly reflect the realities of the increased expenditures and lost revenues experienced over the pandemic’s course,” he added. 

Reagan added that expanding the uses of resources to reflect workplace safety measures would “make clear that the monies provided through the fund are intended to address many of the challenges of the pandemic that impacted the safety of long-term care workers and residents.”

Correcting the PRF

The proposal is a “commonsense correction to the various deadlines to use and report on the use of PRF payments received,” said Brian Lee, a healthcare attorney and partner at Alston & Bird. 

“By tying the deadlines to the end of the COVID-19 public health emergency, providers will have more stability and certainty without the potential threat of recoupment based on when a prior PRF payment was received,” he told McKnight’s. 

Nursing and other long-term care providers that received prior PRF payments will have more time to assess their overall expenses and lost revenues in relation to the totality of PRF payments received and the impact of the entire pandemic, he explained.

If enacted, this legislation would essentially “hit the reset button, and provide additional flexibility and breathing room for all PRF recipients to take a step back and assess COVID-related expenses and losses at a big picture level.”

“This change would also give HRSA needed time to think through certain open questions related to the use of and reporting on PRF dollars,” Lee explained. “For example, HRSA would have more time to assess and review alternate lost revenue methodologies and work with providers on an acceptable approach in advance of reporting on the payments received.”

Nursing homes once again have access to the federal Provider Relief Fund portal — through midnight Monday (Dec. 20).

Access was re-opened Monday (Dec. 13) for Period 1 reports after some providers had reported having problems with the online system.

The Department of Health and Human Services’ Health Resources & Services Administration announced that operators that need to amend a submitted report also have until 11:59 ET on Dec. 20 to correct any errors. They are to call the provider support Line at (800) 569-3522 to access their submitted report. 

“This re-opening of the portal may present an opportunity for nursing homes to rethink how they apply their expenses and lost revenues before the next reporting period. Infection control expenses are the only eligible use for Nursing Home Infection Control (NHIC) distributions and quality incentive payments issued through PRF,” LeadingAge said in a member update.

The association noted that some of its members had faced a dilemma over when to report infection control expenses. Some were concerned that if they reported those expenses in the first reporting period, they would not have enough infection control expenses to be able to submit for the second reporting period. HRSA has clarified that operators can choose how and when to apply those expenses.

“This flexibility would allow a nursing home to not report any infection control expenses in the first reporting period and apply them instead to the NHIC funds they must report on in the second reporting period,” according to the association.

With the portal re-opening, nursing homes can revise and re-submit their reports to remove their infection control expenses from the first reporting period and wait to report them in the second reporting period, which will begin Jan. 2.