The COVID-19 Health Care Provider Relief Fund

The COVID-19 Health Care Provider Relief Fund

The COVID-19 Health Care Provider
Relief Fund
Updated November 2, 2020
In response to the Coronavirus Disease 2019 (COVID-19) pandemic, some health care providers limited
in-person visits and cancelled elective procedures to reduce the spread of COVID-19, prepare for
COVID-19 patients, and conserve personal protective equipment. As a consequence, some providers
reported forgone revenue and/or significant financial challenges, making it difficult to sustain services. To
address these concerns, Congress established the Provider Relief Fund (PRF) in the Coronavirus Aid,
Relief, and Economic Security (CARES) Act (P.L. 116-136) and appropriated $100 billion “to reimburse,
through grants or other mechanisms, eligible health care providers for health care related expenses or lost
revenues that are attributable to coronavirus.” The Paycheck Protection Program and Health Care
Enhancement Act (PPPHCEA, P.L. 116-139) added an additional $75 billion to the PRF.
The PRF provides grants to eligible health care providers. Funds do not have to be repaid as long as the
provider meets the PRF’s terms and conditions. This differs from other provider support programs
including the now suspended Medicare Accelerated and Advance Payment Program (AAP), which
provided advance Medicare payments. Some providers may have received funds from both programs.
Some providers (e.g., physician practices) may also be eligible for loans from the Paycheck Protection
Program (PPP), and can receive funds from both the PRF and PPP, so long as the funds are not
duplicative. In response to questions by providers, the Center for Medicare & Medicaid Services (CMS)
has clarified how PRF funds are to be reported as revenue, in Medicare Cost Reports for reporting
providers. In addition, the Internal Revenue Service (IRS) has clarified that PRF funds are taxable.
Fund Administration
The PRF is administered under contract with the UnitedHealth Group. The Department of Health and
Human Services (HHS) also administers a different but related fund that provides reimbursement for
COVID-19 testing and treatment for the uninsured, with a portion of PRF funds allocated for uninsured
treatment.
Eligibility, Terms, and Conditions
To receive PRF funds, providers must submit an application with their tax ID number and required
revenue information. After receiving funds, providers must agree to the terms and conditions, namely,
Congressional Research Service
https://crsreports.congress.gov
IN11438
CRS INSIGHT
Prepared for Members and
Committees of Congress

Congressional Research Service
2
among others, certifying that the funds will be used to prepare for or treat COVID-19 patients or for lost
revenue and will not be used to duplicate another source of payment, and agree to submit documentation.
Providers also must agree that for all care provided to presumptive or positive COVID-19 cases they “will
not seek to collect from the patient out-of-pocket expenses 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 recipient.” In
other words, for COVID-19-related care, PRF fund recipients agree not to surprise-bill patients with a
presumptive or actual COVID-19 diagnosis. Providers who receive PRF funds for uninsured COVID-19
care must accept that reimbursement as payment in full.
Allocations
PRF funds are being distributed through general and targeted allocations as follows.
$88 Billion General Distribution
$50 Billion Phase 1:
 $30 billion to health care providers who billed Medicare Fee-for-Service (FFS) based on
that revenue in 2019.
 An additional $20 billion to some of the same Medicare FFS providers such that the net
allocation of the $50 billion is based on providers’ net patient revenue for 2018 (or the
most recently completed tax year) or the sum of losses incurred for March and April
2020, whichever is less.
$18 Billion Phase 2:
 $18 billion to Medicaid and CHIP Providers, dentists, and certain eligible providers that
missed the Phase 1 distribution. Payments were up to 2% of the provider’s gross patient
revenue.
$20 Billion Phase 3:
 $20 billion to behavioral health providers, providers that were previously ineligible (i.e.,
because they began practicing in 2020), and additional funding for prior PRF recipients.
$55.6 Billion Targeted Allocations
 A total of $22 billion to high impact hospitals: The first $10 billion to hospitals with 100
or more COVID-19 inpatients, distributed in proportion to the hospital’s COVID-19 case
load; an additional $2 billion to high impact Safety Net Hospitals based on the relative
amount of care provided to low-income or uninsured patients; and a second $10 billion to
hospitals with over 160 COVID-19 inpatients or with an above average COVID-19
intensity admissions per bed.
 $11.3 billion to rural providers: $10.2 billion to rural hospitals, rural health clinics, and
rural community health centers, with each provider receiving a base payment (that varied
by provider type) and an adjustment for the provider’s operating expenses.
Approximately $1.1 billion to specialty (i.e., psychiatric, rehabilitation, and long-term
care) rural hospitals and certain hospitals in small metropolitan areas.
 Approximately $9.4 billion to nursing homes: $7.4 billion provided to skilled nursing
facilities with each facility receiving a base payment and additional amounts based on the
facility’s number of beds. $2 billion to be allocated to some facilities based on certain
performance measures.

Congressional Research Service
3

 Unspecified amount to reimburse facilities for COVID-19 care for uninsured patients.
 $500 million to Indian Health Service facilities: Facilities operated by the Indian Health
Service, Indian Tribes, and Urban Indian Organizations receive assistance, depending on
the type of facility, based on operating expenses and patient volume.
 $14.4 billion to Safety Net and Children’s Hospitals: $10 billion to Safety Net and
Children’s hospitals. Specifically, Safety Net hospitals that serve a disproportionate
number of low-income Medicare patients, provide large amounts of uncompensated care,
and have profitability of 3% or less. Safety Net children’s hospitals are eligible based on
the number of Medicaid patients, and profitability of 3% or less. $1.4 billion to additional
Children’s Hospitals and $3 billion to safety net hospitals that are not eligible for the $10
billion, but can demonstrate low profitability.
In total, HHS has allocated more than $143 billion of the $175 billion available. This does not include the
amounts reimbursed for uninsured care.
PRF Data
HHS has released data on PRF payments and provided information on targeted allocation recipients by
state. Data are updated twice weekly.

Author Information

Elayne J. Heisler

Specialist in Health Services

Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan shared staff
to congressional committees and Members of Congress. It operates solely at the behest of and under the direction of
Congress. Information in a CRS Report should not be relied upon for purposes other than public understanding of
information that has been provided by CRS to Members of Congress in connection with CRS’s institutional role.
CRS Reports, as a work of the United States Government, are not subject to copyright protection in the United
States. Any CRS Report may be reproduced and distributed in its entirety without permission from CRS. However,
as a CRS Report may include copyrighted images or material from a third party, you may need to obtain the
permission of the copyright holder if you wish to copy or otherwise use copyrighted material.
IN11438 · VERSION 11 · UPDATED