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COVID-19 Emergency Financial Relief: Gas Pedal to the Floor, No Steering Wheel?

Since the early stages of the COVID-19 pandemic, Congress and the federal government have committed massive amounts of money to economic recovery across affected industries, with healthcare receiving hundreds of billions of dollars in emergency funding. Despite this push to inject capital into a shuttered economy, healthcare organizations have gotten surprisingly little in the way of direction on how they could spend these monies. Providers—a few of which are flush with cash and many struggling with a lack of working capital—now grapple with questions about how to spend sizeable sums of stimulus money legally and how to get their organizations on the road to recovery. Meanwhile, they wait for more guidance, knowing the inevitable waves of audits and enforcement are coming.

During this webinar, you will learn the following:
- How to appropriately receive and optimize COVID-19 relief funding.
- How to utilize relief funding in a compliant way.
- How to proactively prepare for audit and oversight.
- How to make data-informed decisions to prepare, prevent, recover, and plan during a global pandemic.

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COVID-19 Emergency Financial Relief: Gas Pedal to the Floor, No Steering Wheel?

  1. 1. Gas Pedal to the Floor, No Steering Wheel? November 4, 2020 COVID-19 Emergency Financial Relief:
  2. 2. Today…
  3. 3. Polling
  4. 4. Background
  5. 5. Common COVID Relief Funding Sources Accelerated & Advance Payment Program Centers for Medicare and Medicaid Services (CMS) Provider Relief Fund (PRF) Health and Human Services (HHS) Coronavirus Relief Fund (CRF) US Department of the Treasury (Treasury) COVID-19 Telehealth Program Federal Communications Commission (FCC) Category B Public Assistance Federal Emergency Management Agency (FEMA)
  6. 6. $175 Billion CARES Act and PPP & Healthcare Enhancement Act Appropriations to HHS for the Provider Relief Fund (PRF)
  7. 7. Provider Relief Fund (PRF) Distributions As of October 10, 2020 $50.0 $18.0 $20.0$22.0 $11.3 $4.9 $0.5 $13.3 $5.0 $1.4 $28.6 HHS Provider Relief Fund (in billions) GENERAL DISTRIBUTION, PHASE 1 GENERAL DISTRIBUTION, PHASE 2 GENERAL DISTRIBUTION, PHASE 3 HIGH-IMPACT DISTRIBUTION RURAL DISTRIBUTION ALLOCATION FOR SNFS ALLOCATION FOR TRIBAL HOSPITALS, CLINICS AND URBAN HEALTH CENTERS ALLOCATION FOR SAFETY NET HOSPITALS ALLOCATION FOR NURSING HOMES ALLOCATION FOR CHILDREN'S HOSPITALS REMAINING, INCLUDING TREATMENT FOR UNINSURED COVID-19 PATIENTS
  8. 8. • Lost revenues • Calculation and limits on use of lost revenue • Healthcare related expenses attributable to Coronavirus • Expense-first order in supporting PRF dollars received • Unanswered questions The Latest Guidance from HHS* * Post-Payment Notice of Reporting Requirements, PRF General and Targeted Distribution, October 22, 2020.
  9. 9. • Step 1: Healthcare related expenses attributable to Coronavirus that another source has not reimbursed: • General and administrative (G&A) • Healthcare related operating expenses • Step 2: PRF payment amounts not fully expended on healthcare related expenses attributable to coronavirus are then applied to patient care lost revenues. Reporting Guidance on Use of Funds Recipients will report their use of PRF payments using their normal method of accounting (cash or accrual basis), by submitting the following information:
  10. 10. G&A Expenses Attributable to COVID-19 Fringe Benefits The actual G&A expenses incurred over and above what has been reimbursed by other sources. Lease Payments Utilities/Operations Mortgage/Rent Insurance Personnel Other G&A
  11. 11. Expenses paid to prevent, prepare for or respond to the Coronavirus during the reporting period: • Supplies: PPE, hand sanitizer or supplies for patient screening • Equipment: Ventilators, updates to HVAC systems, etc. • Information Technology (IT): Expenses paid for IT or interoperability systems to expand or preserve care delivery during the reporting period, EHR licensing fees, telehealth infrastructure, increased bandwidth, and teleworking to support remote workforce • Facilities: Lease or purchase of permanent or temporary structures or to modify facilities to accommodate patient treatment practices revised due to Coronavirus • Other Healthcare Related Expenses: Any other expenses not captured above Healthcare Related Expenses Attributable to COVID-19 Actual healthcare related expenses incurred over and above what has been reimbursed by other sources
  12. 12. Lost Revenue Attributable to COVID-19 • Lost revenues attributable to coronavirus are represented as a negative change in year- over-year actual revenue from patient care related sources. Other assistance received is reported as operating revenue and used in the calculation of year-over-year change in patient care related revenue. • If recipients do not expend PRF funds in full by the end of calendar year 2020, they will have an additional six months in which to use remaining amounts toward expenses attributable to coronavirus but not reimbursed by other sources, or to apply toward lost revenues in an amount not to exceed the difference between 2019 and 2021 actual revenue.
  13. 13. Use of Provider Relief Funds
  14. 14. • Reporting system will become available January 15, 2021. • All recipients must report by February 15, 2021 on expenditures through December 31, 2020. • For any funds not used by December 31, 2020, a second and final report will report will be due by July 31, 2021. • HHS published guidance on September 19, 2020 and October 22, 2020, and more Q&A sessions and FAQs are promised. HHS PRF Reporting Requirements
  15. 15. What Is a Single Audit? • A single audit encompasses: • Financial statement audit in accordance with AICPA standards (GAAS) and Government Auditing Standards (known as Yellow Book or GAGAS) • Compliance audit in accordance with GAAS and the Uniform Guidance • Generally must be performed annually when a nonfederal entity expends $750,000 or more of federal awards (either direct or indirect awards) in their fiscal year • Must be submitted to the Federal Audit Clearinghouse within the earlier of: • 30 days after receipt of the auditor’s reports; or • 9 months after the end of the audit period
  16. 16. • Have a draft Schedule of Expenditures of Federal Awards (SEFA) ready • Include reconciliation of SEFA, financial statements and other SEFA supporting documentation • Have readily accessible written policies and procedures. • Provide the auditor with access to personnel, accounts, books, records, supporting documentation and other information as needed. • Identify and address problem areas in advance and communicate with your auditor in the early stages on any known issues. Audit Strategy
  17. 17. • Financial survival • Short-term cash flow pressures • Staffing challenges • Fixed cost structure not allowing overall costs to drop commensurate with revenue • Evaluating and tracking funding opportunities Common Immediate Issues
  18. 18. • Stimulus dollars likely far short of impact • Continue documenting COVID-19 related care • Restating selected services • Potential pent up demand—but patient wariness of COVID-19 free environment • Strategy for expense management • Greater self-pay with unemployed • Legal support Recovery Planning
  19. 19. Organizational Structure? Clinical Committee Finance Committee Operations Committee Audit Committee Executive Committee
  20. 20. Permanent Team Temporary Project Team Team Structure Thoughts • Pros • Proactive (strategic Commitment) • Predictable Resource Investment • Team members expect long-term relationship • Members learn clinical or operational domain • Partnerships established on priorities • Cons • “Feels” Too Heavy • Cons • Reactionary • Variable • Follow Up much slower • Team members don’t always understand context within domain (confusion) • Tendency to pile-on • Pros • Easier to get rolling
  21. 21. COVID-19EmergencyFundingRoadMap&BestPractices 1. Adapt and Execute Relief Funding Plan a.Finalize decisions on existing sources b.Maximize current relief funds c.Monitor new rounds of funding 2. Empower compliance Team a.Study ever-changing requirements and guidance b.Refine reporting strategy c.Test and revise controls as needed a.Finalize documentation b.Reconcile funds and resources c.Execute readiness plan a.Prepare for post-COVID case and payer mix b.Develop virtual care and brick-and-mortar strategies c.Consider new competitors and consolidation d.Capitalize on changes in patient migration patterns 5. Engage Your Leadership in Post-COVID Strategies 3. Respond to Oversight 05 4. Adopt Insight-Driven Strategies with Data a.Find and gather core business data b.Identify and avoid information biases c.Employ fact-based decision making 6. Imagine What’s Possible 06 COMMUNICATE AND TRAIN OFTEN STEWARD RESOURCES 04
  22. 22. Q&A
  23. 23. Thank You

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