Since the passing of the CARES act, hospice, home health and palliative care providers have experienced a strange mix of hope and confusion. The initial wording sounded like a ‘carte blanche’ with respect to ‘lost revenue.’ The initial PRF forgiveness wording and specific guidance were remarkably open-ended.
Serving hospices and post-acute healthcare puts Blackmor, CPA in the same boat as our clients. We’ve struggled alongside hospices to estimate forgiveness for PPP and HHS funding from day one of the CARES Act.
HHS further clarified (or confused) providers on Sept. 19, stating that providers must compute lost revenue:
“…as a negative change in year-over-year net patient care operating income.”
Understandably, CMS and HHS aimed to “restrict some providers from receiving distributions that would make them more profitable than they were before the pandemic.” However, these sudden shifts create more ‘noise’ amidst a sea of uncertainty. From where we sit, this changed the nature of our ‘hypo’ CARES PRF calculations entirely across our hospice agencies.
HHS’ CARES Clarification
Fortunately, yesterday HHS retraced its earlier ‘clarification’ with the following release:
“PRF payment amounts not fully expended on healthcare related expenses attributable to coronavirus are then applied to patient care lost revenues, net of the healthcare related expenses attributable to coronavirus calculated under step 1. Recipients may apply PRF payments toward lost revenue, up to the amount of the difference between their 2019 and 2020 actual patient care revenue.
Blackmor, CPA will continue to follow and update our agencies as things come to light. We monitor and update our CARES PRF projections and CMS advances with the best available guidance.