For more information, visit the Internal Revenue Service's website. For more information, please review HRSAsPhase 4 and ARP Rural Reconsiderationspage. HHS has yet to fix the problem, which has created a series of traps for unwary providers. Aprios Professional Services team is available to address your questions about the relief fund and will continue to provide updates as they become available. If the current TIN owner has not yet received any payment from the Provider Relief Fund, it may still receive funds in other distributions. If none, the entity with a majority ownership (greater than 50 percent) will be considered the parent organization. I am retiring this year and not selling my practice, just closing. policy, Privacy research, news, insight, productivity tools, and more. For more information on this process,please review the instructions. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities, and past performance is not indicative of future results. The purchaser/new owner cannot accept the payment directly from another entity nor attest to the Terms and Conditions on behalf of the seller/previous owner in order to retain the Provider Relief Fund payment, including payment under the Nursing Home Infection Control Quality Incentive Payment Program, unless the sellers Medicare provider agreement and TIN was accepted by the purchaser in the transaction. As part of the Coronavirus Aid, Relief and Economic Security Act (CARES Act), Congress appropriated $100 billion to reimburse eligible health care providers for health care-related expenses and/or lost revenue attributable to the COVID-19 pandemic. This feature will provide enhanced account protection. Please refer to CMSFAQs- PDF (PDF - 1 MB)on how Provider Relief Fund payments should be reported on cost reports. 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. tax, Accounting & 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)? Examples include, but are not limited to, decreases in tax revenue and non-federal, government grant funding. The CARES Act enacted in March 2020 established the Provider Relief Fund (PRF) to provide funds to healthcare providers to prevent, prepare for, and respond to coronavirus. 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)? The Terms and Conditions place restrictions on how the funds can be used. Hospitals and health systems in all states and territories eligible for Provider Relief Fund payments. Providers must follow their basis of accounting to determine expenses. All recipients receiving payments under the Provider Relief Fund will be required to comply with theTerms and Conditions. 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. For general media inquiries, please contactmedia@hhs.gov. Providers that have not received payments under the Provider Relief Fund due to issues related to change of ownership will be eligible to apply for future allocations. HRSA began distributing ARP Rural payments on November 23, 2021. Eligible providers include public entities, Medicare or Medicaid enrolled suppliers and providers, and both for-profit and not-for-profit entities that provide diagnoses, testing, or care for individuals with possible or actual cases of COVID-19. A presumptive case of COVID-19 is a case where a patient's medical record documentation supports a diagnosis of COVID-19, even if the patient does not have a positive in vitro diagnostic test result in his or her medical record. A health care provider that is described in section 501 (c) of the Code generally is exempt from federal income taxation under section 501 (a). Use a trusted tax research tool to answer all your questions. 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. A description of the eligibility for the announced Targeted Distributions can be found here. Payments from the Provider Relief Fund shall not be subject to the claims of the provider's creditors and providers are limited in their ability to transfer Provider Relief Fund payments to their creditors. This is in addition to HRSAs distribution of American Rescue Plan (ARP) Rural payments totaling nearly $7.5 billion in funding to more than 44,000 providers across the country over the past four months. If you have questions or concerns regarding this enhancement, please contact Provider Support Line (866) 569-3522; for TTY dial 711. Step 5: Ensure that all information is correct and select "Submit.". For those healthcare providers that report eligible expenses attributable to COVID-19 that exceed the amount of Provider Relief Funds received in Period 1, or whose lost revenue exceeds such amounts, HHS made it clear that the "surplus" may carry over to future reporting periods. If a provider was paid via paper check, the provider should destroy the check if it is not deposited, or mail a paper check to UnitedHealth Group with notification of their request to return the funds. HHS Provider Relief Fund payments are considered gross income and are taxable, according to federal guidance. However, HHS expects that it would be highly unusual for providers to have incurred eligible expenses or lost revenues prior to January 1, 2020. In a recent blog post, the Taxpayer Advocate Service (TAS) asserts that under Treasury Regulation 1.6662-4(d)(3)(iii), IRS press releases and statements meet the standard of substantial authority, suggesting taxpayers may rely on the guidance included in FAQs provided at the time of filing or the end of the year. 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. Please refer to thePost-Payment Notice of Reporting Requirements (PDF - 232 KB)for information on the three available methodologies for calculating lost revenues. Many states also used funds to help . HHS will develop a report containing all information necessary for recipients of Provider Relief Fund payments to comply with this provision." HHS goes on to explain that: Washington, D.C. 20201 If a Reporting Entity that received an ARP Rural payment undergoes a merger or acquisition during the Payment Received Period, the Reporting Entity must report the merger or acquisition during the applicable Reporting Time Period. The parent organization can allocate funds at its discretion to its subsidiaries. Individual Income Tax . APRIO CLOUD is a service mark of Aprio, LLP. The attestation portals require payment recipients to (1) confirm they received a payment and the specific payment amount that was received; and (2) agree to the Terms and Conditions of the payment. View a state-by-state breakdownof all ARP Rural payments disbursed to date. A provider may utilize Provider Relief Fund payments to satisfy creditors' claims, but only to the extent that such claims constitute eligible health care related expenses and lost revenues attributable to coronavirus and are made to prevent, prepare for, and respond to coronavirus, as set forth under the Terms and Conditions. Audit & 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. Q: Is a tax-exempt health care provider subject to tax on a payment it receives from the Provider Relief Fund? 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. Although it may seem complex, Art helps make sense of it to help you with strategic tax planning and maximize profitability in your practice. The following instructions are to return the full payment amount: If the provider received payment via electronic transfer, the provider needs to contact their financial institution and ask the institution to initiate a R23 - Credit Entry Refused by Receiver" code on the original Automated Clearing House (ACH) transaction. HRSA is only reconsidering Phase 4 General Distribution and ARP Rural applications and payments at this time. To return accrued interest, visitpay.gov. Yes. Additionally, the opportunity to apply Provider Relief Fund payments (excluding the Nursing Home Infection Control Distribution) and ARP Rural payments for lost revenues will be available only until the conclusion of the quarter in which the Public Health Emergency expires. In addition, the address listed for the billing TIN often corresponds with the billing location (based on CMS's Provider Enrollment, Chain, and Ownership System (PECOS)), and may not align with the physical location of a health care practice site. Written by Brian Werfel on July 15, 2020. On July 7, 2020, the Internal Revenue Service published a series of Frequently Asked Questions that address the taxation of payments to health care providers under the HHS Provider Relief Fund. All payment recipients must attest to the Terms and Conditions, which require maintaining documentation to substantiate that these funds were used for health care-related expenses or lost revenues attributable to coronavirus. . The PRF Reporting Portal provides reporting requirements and auditing information related to recipients of PRF payments. Provider Relief Fund payments must be used to cover healthcare related expenses 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. HHS is distributing this Provider Relief Fund (PRF) money and these payments do not need to be repaid. If a provider has unused funds, it may return all or a portion of the funds when the first reporting period begins. 200 Independence Avenue, S.W. Step 4: Enter the required information to complete the payment, then select "Review and Submit." Explore all Provider Relief Fund payments may be used to support expenses associated with distribution of a COVID-19 vaccine licensed or authorized by the Food and Drug Administration (FDA) that have not been reimbursed from other sources or that other sources are not obligated to reimburse. > HHS Distributing an Additional $413 Million in Provider Relief Fund Payments to Health Care Providers Impacted by the COVID-19 Pandemic. Verify that the description is "PSC HQ Payment"and form number is"HHSHQ,"then click continue. April 5, 2022, the deadline for vaccination claims under either the Uninsured Program and the Coverage Assistance Fund due to insufficient funds. The IRS has made clear that these state and local grants to businesses are taxable income. Additional clarification is needed regarding the reporting process. 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. When calling, providers should have ready the last four digits of the recipient's or applicant's Tax Identification Number (TIN), the name of the recipient or applicant as it appears on the most recent tax filing, the mailing address for the recipient or applicant as it appears on the most recent tax filing, and the application number (begins with either "DS" or "CR") if they have submitted an application in the Provider Relief Fund Payment Portal. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed here. Seller organizations should not transfer a payment received from HHS to another entity. Although initially $100 billion was provided to prevent, prepare for, and respond to the coronavirus domestically and internally, that amount was increased by $78 billion in two subsequent pieces of legislation. HHS reserves the right to audit Provider Relief Fund recipients now or in the future, and may pursue collection activity to recover any ARP Rural payment amounts that have not been supported by documentation or payments not used in a manner consistent with program requirements or applicable law. Examples of costs incurred for an entity using accrual accounting, during the Period of Availability include: For purchases of tangible items made using ARP Rural payments, the purchase does not need to be in the providers possession (i.e., back ordered PPE, ambulance, etc.) At least 60% of the proceeds are spent on payroll costs. Integrated software As a result, these payments are includible in the gross income of the entity. consulting, Products & Per the SBA, borrowers qualify for full loan forgiveness if, during the 8- to 24-week covered period following loan reimbursement, the following are met: The loan proceeds are spent on payroll costs and other eligible expenses, and. 116-136 ). PRF funds are includable in gross income. Step 3: Verify the interest return payment amount and select to pay by ACH or debit/credit card, then select "Continue." Yesterday, (October 22, 2020) the Department of Health and Human Services (HHS) changed the rules to now include the loss of g ross revenue during the pandemic. Yes. 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). The CARES Act requires that providers meet certain terms and conditions if a provider retains a Provider Relief Fund payment. To streamline the process and minimize provider burden, this information will be collected in theProvider Relief Fund Reporting Portalas part of the regular reporting process. ARPA Funds for HCBS Providers ARPA Funds for . Some of the most common questions from providers include: Are Provider Relief Funds taxable? Yes. Please enter your email address. HRSA considers changes in ownership, mergers/acquisitions, and consolidations to be reportable events. 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. Provider Relief Fund resources are continuing to help meet these essential needs and maintain access to key health services across the country.. HHS broadly views every patient as a possible case of COVID-19, therefore, care does not have to be specific to treating COVID-19. Providers have at least 12 months, and as much as 18 months, based on the payment received date, to control and use the payments for expenses and lost revenues attributable to coronavirus incurred during the Period of Availability. As of July 10, 2020, the US Department of Health & Human Services (HHS) released a new Provider Relief Fund for Providers. Yes. For-profit healthcare providers will be the most significantly impacted, but nonprofit providers that received distributions should consider whether the payment is for an unrelated trade or business, which may result in the payment being subject to Unrelated Business Income Tax. Per the Terms and Conditions, all recipients will be required to submit documents to substantiate that these funds were used for health care-related expenses or lost revenues attributable to coronavirus, and that those expenses or lost revenues were not reimbursed from other sources and other sources were not obligated to reimburse them. All HHS decisions are final and there is no appeals process. On May 4, the U.S. Department of Treasury released new guidance on the Coronavirus Relief Fund (CRF) that was authorized under the Coronavirus Aid, Relief and Economic Security (CARES) Act ( P.L. Examples of costs incurred for an entity using accrual accounting, during the Period of Availability include: For purchases of tangible items made using PRF payments, the purchase does not need to be in the providers possession (i.e., back ordered PPE, ambulance, etc.) 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. 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