HHS Announces Release of $9 Billion in Provider Relief Fund Payments

According to a Dec. 14 press release, the U.S. Department of Health and Human Services (HHS), through the Health Resources and Services Administration (HRSA), announced the distribution of approximately $9 billion in Provider Relief Fund (PRF) Phase 4 payments to healthcare providers that experienced revenue losses and expenses associated with the COVID-19 pandemic.

The release states that “The average payment being announced today for small providers is $58,000, for medium providers is $289,000, and for large providers is $1.7 million. More than 69,000 providers in all 50 states, Washington, D.C., and eight territories will receive Phase 4 payments. Payments will start to be made later this week.”

Further, “The PRF Phase 4 payments, in addition to the $8.5 billion in American Rescue Plan (ARP) Rural payments to providers and suppliers who serve rural Medicaid, Children's Health Insurance Program (CHIP), and Medicare beneficiaries, are part of the $25.5 billion the Biden-Harris Administration is releasing to health care providers to recruit and retain staff, purchase masks and other supplies, modernize facilities, or other activities needed to respond to COVID-19.”

The release explains that part of the Biden-Harris Administration’s commitment to more transparency with the PRF, HRSA publicly release the Phase 4 payment methodology in September—making it available to providers for the application period. About 75 percent of the Phase 4 funding is being distributed based on expenses and decreased revenues from July 1, 2020 to March 31, 2021—HRSA is reimbursing a higher percentage of losses and expenses for smaller providers. Smaller providers entered the pandemic worse off financially and generally operate on smaller financial margins, as well as care for more vulnerable populations.

“Consistent with the Biden-Harris Administration’s dedication to health equity and supporting the most vulnerable communities, HRSA is distributing 25 percent of Phase 4 funding as ‘bonus’ payments based on the amount and type of services provided to Medicare, Medicaid, or CHIP patients,” the release continues.

Last month, we reported that HHS through HRSA began distributing $7.5 billion in American Rescue Plan (ARP) Rural payments to providers and suppliers who serve rural Medicaid, Children's Health Insurance Program (CHIP), and Medicare beneficiaries. Similarly, HRSA is using Medicare reimbursement rates in calculating payments to mitigate disparities due to varying Medicaid reimbursement rates.

HHS Secretary Xavier Becerra was quoted in the release saying that “As we continue to fight the pandemic, the Biden-Harris Administration remains committed to supporting our healthcare providers on the front lines. This vital funding will ensure critical health care services are delivered to communities across the country—including to those who are disproportionately impacted by the pandemic and medically-underserved.  We will continue to make healthcare accessible for everyone who needs it and reach people where they are.”

Currently, HRSA is reviewing the remaining Phase 4 applications and will make the rest of Phase 4 payments in 2022.