COVID-19 Pandemic and Community Benefit Reporting

Transcript:COVID-19 Pandemic and Community Benefit Reporting:
COVID-19 Pandemic and Community Benefit Reporting Keith Hearle President Verité Healthcare Consulting, LLC Keith.Hearle@Veriteconsulting.com December 16, 2020 Outline Introduction Treatment of Provider Relief Funds COVID-19 activities and programs: “what counts as community benefit” Questions and answers Caveat: The information, recommendations, and guidance herein is preliminary and does not constitute tax or legal advice. Introduction The COVID-19 pandemic is having dramatic impacts on hospital revenues and expenses Substantial Provider Relief Funds (PRF) and “other assistance” (PPP, FEMA CARES, state/local/tribal, …) have been appropriated to hospitals Instructions to IRS Form 990, Schedule H are silent on numerous, relevant issues (e.g., treatment of PRF funds) However, they still apply and answers to most if not all questions can be found there and in other, emerging guidance It’s preferable to be conservative and grounded in underlying community benefit reporting principles Treatment of Provider Relief Funds IRS Form 990 instructions state that “direct offsetting revenue” includes restricted grants used for community benefits The PRF funds are substantial: For some organizations, “lost revenues” are less than PRF allocations These organizations are identifying “health care related expenses that are attributable to coronavirus” But should these funds be considered “restricted grants”? Treatment of Provider Relief Funds Yes, PRF funding (probably) should be considered a restricted grant Providers must certify that “the Payment will only be used to prevent, prepare for, and respond to coronavirus, and shall reimburse the Recipient only for health care related expenses or lost revenues that are attributable to coronavirus” (Terms and Conditions) Use of PRF funds is subject to single audit and recoupment While not labeled by HHS as “restricted grants,” the PRF funds have many similar attributes [Stakeholders and policy makers may raise questions if PRF funds are paying for community benefits, but are being left out] Treatment of Provider Relief Funds Suggested community benefit reporting principles: If a hospital has reported certain expenses as (A) community benefit and also in (B) “expenses attributable to coronavirus,” then a reasonable portion of PRF revenues should be included in “direct offsetting revenue” Note that PRF revenues are likely to be less than PRF payments given uncertainties around the ability to keep all of the funds Similarly, if a hospital has reported certain revenue losses as (A) community benefit and also in (B) “lost revenues attributable to coronavirus” then a reasonable portion of PRF revenues also should be included Schedule H instructions still apply There should