Our office has received many questions from clients wondering if they should apply for the HHS Phase 4 General payment. Based on what we know, the answer is “it depends.” First, consider these questions:
- Do you have an overall loss of patient revenues when you compare the two timeframes laid out on the application (7/1/2020 – 3/31/2021 compared to Q1, Q3 and Q4 2019)?
- Do you have an overall increase in expenses when you compare these same timeframes?
If you answered “yes” to either or both of these questions, then you may qualify for a payment. HRSA is looking at the cumulative loss of revenue and increased expenses, so even if your revenue is up or your expenses are down, you could still qualify if you can show an overall deficit once you combine the two. You can use the Excel spreadsheet to help you determine this.
Did you answer “no” to both questions? If so, you will likely not qualify for a base payment. In this scenario, it is unclear if you would still qualify for consideration for the bonus payment or ARP Rural payment. We are continuing to keep an eye on the HRSA website for additional guidance.
NOTE: After the base payment is calculated, HRSA will deduct funds received in prior phases from the total. This is to ensure that providers who have not previously applied will receive the majority of the available funds. Per the HRSA website, “Some providers may be eligible for a payment, but the payment calculation will be $0 due to risk mitigation and cost containment safeguards.”
After considering the items above, if you feel that you qualify to apply, then please see below for a few key points to help you get started on the application process. As a reminder, the application deadline is October 26, 2021.
- Phase 4 General – any dentist or physician who bills Medicare (A, B or C), Medicaid or CHIP
- ARP Rural – same requirements as Phase 4 General, plus operates in or has patients who live in a rural area as defined by the HHS Federal Office of Rural Health Policy:
- All non-Metro counties;
- All Census Tracts within a Metropolitan county that have a Rural-Urban Commuting Area (RUCA) code of 4-10. The RUCA codes allow the identification of rural Census Tracts in Metropolitan counties;
- 132 large area census tracts with RUCA codes 2 or 3. These tracts are at least 400 square miles in area with a population density of no more than 35 people per square mile; and
- 295 outlying Metropolitan counties with no Urbanized Area population.
NOTE: There is no penalty for asking to be considered for the ARP Rural Payments on the application. We encourage all providers who apply for Phase 4 General funds to check “Yes” to be considered for this payment as well.
- Applicants will have to go through the TIN validation process even if this was done in earlier rounds – allow several days for this process, so don’t wait too long to get started.
- Documentation needed:
- Most recently filed federal income tax return
- Internally generated financial statements (e.g. QuickBooks reports) that substantiate operating revenues and expenses from patient care in 2019 Q1, Q3 and Q4, 2020 Q3 and Q4, and 2021 Q1
- See our 9/29/2021 blog for additional helpful information: Phase 4 General Distribution and ARP Rural Payments
Calculation of Payments:
- Phase 4 75% base payment – This will be a percentage of the change in operating revenues and expenses; the percentage is dependent on the size of your practice (to be determined by HRSA based on revenues of the entire applicant pool).
NOTE: The base payment cannot exceed 100% of losses and expenses from 7/1/20 – 3/31/21.
- Phase 4 25% bonus payment – This will be based on the volume and type of services provided to all Medicare/Medicaid/CHIP beneficiaries.
NOTE: It is unclear whether or not a provider who does not qualify for the 75% base payment would still be eligible to receive a bonus payment.
- ARP Rural payment – This is calculated separately from the Phase 4 General payment and is based on information that HRSA already has in its system. There is no documentation required from the applicant to be considered for this payment.
NOTE: It is unclear whether or not a provider who does not qualify for the Phase 4 General payment would still be eligible to receive an ARP Rural payment.
Use of funds:
Similar to previous rounds, Phase 4 payments can be used to reimburse lost revenues or eligible expenses dating back to 1/1/2020, as long as they have not been reimbursed by other sources, such as prior HHS funds, PPP, EIDL, local grants, etc.