On December 4, the U.S. Department of Health and Human Services (HHS) revised its Public Health and Social Services Emergency Fund (Relief Fund) Frequently Asked Questions (FAQs), indicating that providers must return Relief Fund monies received in excess of amounts calculated using HHS’s Relief Fund payment formulas. As a general rule, General Distribution payments are calculated based on 2% of a provider’s annual revenue from patient care, as reflected on the provider’s most recent federal income tax return.  Payment formulas for Targeted Distributions vary considerably, however, depending on the relevant distribution at hand.

The newly revised FAQs state that HHS will recoup any Relief Fund amounts paid to a provider in error, though it is silent as to the timing and process for such recoupments.

Also, the FAQs note that providers who received a payment that is “greater than expected” and who believe the payment was “made in error” should contact HHS’s Provider Support Line to “seek further clarification.”  It is unclear, however, whether such “clarification” will result in automatic repayment or recoupment of excess funds received, or whether providers who received more than $10,000 in Relief Fund payments may continue to hold “excess” funds until HHS’s final Relief Fund reporting deadline on July 31, 2021.

HHS also deleted a prior FAQ stating that excess payments mistakenly made by HHS did not need to be returned to the agency so long as the recipient expected to have cumulative COVID-19-related expenses and lost revenues equal to or in excess of the payment received. That FAQ had been posted on HHS’s Relief Fund website for months and was likely originally issued in response to Phase I when initial, automatic payments based on approximately 6.6% of Medicare revenues resulted in those recipients that primarily service Medicare beneficiaries receiving more than the later-determined 2% of annual revenues formula.

By essentially replacing this FAQ with the revised FAQ referenced above, HHS significantly departs from its prior guidance, potentially impacting providers’ internal accounting decisions and reporting to HHS of Relief Fund payments received.  Further, it is not entirely clear to what extent this FAQ, issued on December 4, 2020, applies to all prior rounds of funding, including Phase I.

Providers should continue to stay up to date on new guidance as HHS continues to refine its Relief Fund-related instructions.

We are continuing to monitor for additional guidance regarding Relief Fund requirements. If you have any questions about the Relief Fund or related requirements, please contact the authors.