Catching You Up: PRF, Ban on Surprise Bills, Next COVID Package
There’s been plenty of activity over the past month. From enactment of the Consolidated Appropriations Act of 2021 (CAA, 2021) to revised Provider Relief Fund (PRF) changes, we’re here with a quick recap.
CAA, 2021
The law was enacted on December 27, 2020 and included trillions of dollars to fund government as well as provide additional COVID-19 assistance. Of the $900 billion in COVID assistance, roughly $55 billion is targeted at health care, including three billion dollars in Provider Relief Funds (PRF). The law made several policy changes to PRF, including providing flexibility for calculating lost revenues and allowing targeted PRF distributions to be moved within a parent entity. Subsequently, HHS revised its reporting guidance to reflect these changes, which are covered later in this post.
The CAA, 2021 also included many non-COVID related but important health care policies, including a ban on surprise medical bills. After several years of ongoing Congressional negotiations, the No Surprises Act was enacted under this law. It generally prohibits surprise bills (or “balance billing”) for emergency services provided by out-of-network facilities and/or providers. The law also bans balance billing for out-of-network providers when the patient is being treated at an in-network facility unless consent is given. However, certain ancillary items and services are excluded from the consent option. Air ambulance services are also covered by the law.
In these situations, the patient pays an in-network rate (unless covered by notice and consent option). If there are disputes between the health care provider and insurer related to reimbursement, the law establishes a 30-day negotiation period for those entities to use. If the payment is still unresolved, a newly created independent dispute resolution process may be utilized. Parties in arbitration submit their best and final offer to an arbiter who may consider various factors, such as the median in-network rate or skill/training level. However, the arbiter may not consider billed charges or Medicare/Medicaid rates. The losing party pays the cost of arbitration. Overall, the patient is removed from these payment negotiations. States with existing surprise billing laws are not preempted by the new Act. These provisions take effect for plan or policy years beginning January 1, 2022.
Also worthy of note, the CAA, 2021:
- Creates a new rural hospital designation called the Rural Emergency Hospital,
- Changes rural health clinic reimbursements,
- Mitigates an impending physician reimbursement cut, and
- Provides additional graduate medical education residency slots.
Review more details on these and other policies in CLA’s full-length CAA, 2021 article.
Provider Relief Fund Changes
As noted above, the CAA, 2021 included changes to the PRF. On January 15, 2021, the Department of Health & Human Services (HHS) released another revision to the PRF reporting guidance to reflect those changes and make several other adjustments. HHS concurrently opened the PRF Reporting Portal for registration only and delayed the February 15 reporting deadline. HHS did not provide a new reporting deadline, nor did it open up the reporting functionality of the portal.
For a detailed look at PRF changes, watch the replay of our January 27, 2021 webinar.
As the reporting requirements now stand, there are five data elements providers will need to report on. We note the key changes from the January 15 guidance below.
Demographics. Under this element, HHS released new reporting entity language. There are now four reporting entity types.
We’ve been watching the reporting entity language closely to gain insight into how HHS will define the parent and subsidiary relationship. This relationship impacts how distributions can be used and moved within an entity, so PRF recipients should review closely.
Interest Earned. This is a new data element and would require any interest earned on PRF to be reported and used as if it were PRF.
Lost Revenue. There are multiple changes to the lost revenue data element. To reflect the statutory requirements of the CAA, 2021, HHS now allows three options for calculating 2020 calendar year lost revenues:
- 2019 actual to 2020 actual,
- 2020 budget to 2020 actual (if budget approved by March 27, 2020),
- Another reasonable methodology, though HHS indicates this will be subject to higher scrutiny.
For 2021 lost revenues, there are only two options for the 2021 calculation:
- 2019 Q1/Q2 actual to 2021 Q1/Q2 actual,
- 2020 Q1/Q2 budget to 2021 Q1/Q2 actual.
Interestingly, the January 15 reporting requirements also move “other assistance received” out of the lost revenue data element and places it under “additional information” data element. Other assistance received would include funds such as the Paycheck Protection Program. Finally, providers are no longer required to report on their total operating expenses.
Additional Information. “Other assistance received” is moved from lost revenues into this data element. HHS also removed the FAQ that indicated this assistance would be considered revenues in the lost revenue calculation. That said, we are waiting confirmation from HHS as to what these changes mean. HHS will also newly require reporting on the amount of targeted distributions that have been transferred.
Looking Forward
You may have also heard that Congress is working on the President’s $1.9 trillion COVID relief package. This package includes additional funding for testing, contact tracing and surveillance among other health care dollars, but did not specifically reference any additional PRF money. However, bipartisan members of Congress have expressed support for replenishing the fund at some level. We will have to see whether or not that is included in the final package. Congress will have to use budget reconciliation to advance the President’s COVID package and is working through the process and those negotiations right now.
With respect to PRF, we are watching for additional reporting instructions and a revised deadline. HHS continues to push out Phase 3 PRF General Distributions after which, we think, it will turn to a Phase 4 distribution. Your deadline to use PRF is still June 30, 2021.
How We Can Help
As you can see, there are many moving statutory, legislative, and regulatory activities that may impact you or your organization. From modeling reimbursement changes to PRF consulting and reporting preparation, we are working every day with health care entities. Please reach out if we can assist. We’re here to know you and help you.
Jennifer Boese is the Director of Health Care Policy at CLA. She is a highly successful public policy, legislative, advocacy and political affairs leader, including working in both the state and federal government as well as the private sector. She brings over 20 years of government relations and public policy knowledge with her to CLA. Well over half of her career has been spent dedicated to health care policy and the health care industry, affording her a deep understanding of the health care market and environment, health care organizations and health care stakeholders. Her role at CLA is to provide thought leadership, policy analysis and strategic insights to health care providers across the continuum related to the industry's ongoing transformation towards value. A key focus of that work is on market innovations and emerging payment models. Her goal is to help CLA clients navigate and thrive in an increasingly dynamic health care environment.
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