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Provider Relief Funds: HHS
Post-Payment
Notice of Reporting Requirements

06.15.21

Read this if your facility or organization has received Provider Relief Funds.

The rules over the use of the HHS Provider Relief Funds (PRF) have been in a constant state of flux and interpretation since the funds started to show up in your bank accounts back in April. Here is a summary of where we are as of June 14, 2021 on HHS’ reporting requirements. Key highlights:

These requirements apply to:

  • PRF General and Targeted Distributions
  • the Skilled Nursing Facilities (SNF) and Nursing Home Infection Control Distribution
  • and exclude:
    • the Rural Health Clinic COVID-19 Testing Program
    • claims reimbursements from HRSA COVID-19 Uninsured Program and the HRSA COVID-19 Coverage Assistance Fund (CAF)

This notice supersedes the January 15, 2021 reporting requirements.
Deadline for Use of Funds:

Payment Received Period

Deadline to Use Funds

Reporting Time Period

Period 1

4/10/20-6/30/20

6/30/21

7/1/21-9/30/21

Period 2

7/1/20-12/31/20

12/31/21

1/1/22-3/31/22

Period 3

1/1/21-6/30/21

6/30/22

7/1/22-9/30/22

Period 4

7/1/21-12/31/21

12/31/22

1/1/21-3/31/23

Recipients who received one or more payments exceeding $10,000 in the aggregate during each Payment Received Period above (rather than the previous $10,000 cumulative across all PRF payments) are subject to the above reporting requirements 

Responsibility for reporting:

  • The Reporting Entity is the entity that registers its Tax Identification Number (TIN) and reports payments received by that TIN and its subsidiary TINs.
  • For Targeted Distributions, the Reporting Entity is always the original recipient; a parent entity cannot report on the subsidiary’s behalf and regardless of transfer of payment.

Steps for reporting use of funds:

  1. Interest earned on PRF payments
  2. Other assistance received
  3. Use of SNF and Nursing Home Control Distribution Payments if applicable (any interest earned reported here instead), with expenses by CY quarter
  4. Use of General and Other Targeted Distribution Payments, with expenses by CY quarter
  5. Net unreimbursed expenses attributable to Coronavirus, net after other assistance and PRF payments by quarter
  6. Lost revenues reimbursement (not applicable to PRF recipients that received only SNF and Nursing Home Infection Control Distribution payments)

PORTAL WILL OPEN ON JULY 1, 2021!

Access the full update from HHS: Provider Post-Payment Notice of Reporting Requirements.

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BerryDunn experts and consultants

When we meet with hospital boards to review the results of their audit, we are most often asked to share what we are seeing in the industry—and how their hospital compares with others in our client base. As we (hopefully) emerge from the COVID-19 pandemic, I wanted to see where we are as an industry after two challenging years. In reviewing our own benchmarking data, and reading this very comprehensive CFO Outlook Survey by BDO, it reinforced that these are challenging times indeed. 

The pressures of top line sustainability, cost containment, and recruitment and retention of talent are very real. And while healthcare providers are seasoned to the continual challenges and opportunities, the difference going forward, post-pandemic, will be what this looks like for rural providers without the influx of stimulus funds and beyond the initial surge of postponed surgeries. Based on the BDO survey, 69% of healthcare organizations surveyed expect an increase in profitability. Is your organization prepared to take the steps to make it happen? What is your financial resilience outlook?

You can read the survey here. If you would like to discuss further, please contact our Hospital Consulting team. We’re here to help.
 

Article
Healthcare survey: A comprehensive look at the industry

Read this if you have not yet reported for Phase 1.

Phase 1 provider relief reporting portal

HRSA opened the Provider Relief Funds (PRF) reporting portal on July 1, 2021, for Phase 1 PRF reporting. In Phase 1, providers will be reporting on the use of PRF received prior to June 30, 2020. While Phase 1 reporting was originally due September 30, 2021, HRSA has provided a 60-day grace period for the reporting period. Providers will be considered out of compliance with the reporting requirements if they do not submit reporting by November 30, 2021. Providers can submit their reporting on the Provider Relief Fund portal. Please note:

  1. Providers must register for the reporting portal, as this is not the same portal as the application and attestation portal. The portal registration must be completed in one session. Follow the link to the Portal Registration User guide
  2. Providers can only report on eligible lost revenues and expenditures related to payments received before June 30, 2020. Providers are not yet allowed to report on payments received subsequent to June 30, 2020. See the June 11, 2021 Reporting Requirements Notice for more detail on reporting requirements.
  3. The period of availability for Phase 1 lost revenues and eligible expenditures is January 1, 2020 through June 30, 2021.
  4. It is extremely helpful to complete the HRSA provider portal worksheets prior to beginning the portal data entry. 
  5. Providers should return unused funds as soon as possible after submitting their report. All unused funds must be returned no later than 30 days after the end of the grace period. (December 31, 2021)
  6. Provider Relief Funds are considered federal awards under Assistance Listing Number (ALN) 93.948. Providers, both for-profit and not-for-profit, may be subject to a Uniform Guidance Audit if they expend more than $750,000 of federal awards during the provider’s fiscal year. 
  7. Providers are able to retrieve their data submission from the portal if a copy was not retained during the submission process.

Your BerryDunn Hospital team is here to help you navigate the Provider Relief Fund reporting and compliance requirements. Please contact us if you have any questions or would like to talk about your specific situation. 

Article
Provider Relief Funds: Highlights

Read this if you are involved with financial statement audits or use audited financial statements. 

Almost as exciting as the look of a new outfit or (completion of) a renovation project, SAS 134 brings a new design to the auditor’s report accompanying your audited financials for periods ending on or after December 31, 2021. Why the new look, you ask? 

Users spoke and the AICPA Auditing Standards Board listened. The new standard significantly changes the layout and content of the report (including management’s responsibilities) and permits communication of key audit matters (areas of higher assessed risk of material misstatement, areas involving significant judgment, or significant events or transactions during the period). Implemented changes include: 

  • The auditor’s opinion is now at the beginning of the audit report and otherwise strengthens the transparency for the auditor’s opinion.
  • The standard clarifies the responsibilities of both management and the auditors, strengthening the financial audit. 

Sample auditor’s report

The simplest way to relay the changes is with an example. The following report is a basic illustration in which an unmodified opinion was issued and the auditor was not engaged to communicate key audit matters. 

If you have questions or would like to speak to us about your specific situation, please contact us. We’re here to help.

Article
Auditor's report redesigned for better communication

Read this is if you are at a healthcare organization and considering telehealth options. 

Given the COVID-19 emergency declaration, telehealth service regulations have been greatly modified to provide flexibility and payment. The guidance on telehealth is very dispersed and can be difficult to navigate. Here are some FAQs based on the many questions we have received. If you have questions related to your specific situation, please contact us. We're here to help.

UPDATED: Are RHCs and FQHCs now eligible as distant site providers for telehealth services? If so, how will they be paid by Medicare?
Yes, the CARES Act includes RHCs and FQHCs as distant sites during the COVID-19 Public Health Emergency (PHE). Distant site telehealth services can be provided by any health care practitioner of the RHC or FQHC within their scope of practice. The practitioners can provide any distant site telehealth service that is approved as a distant site telehealth service under the Physician Fee Schedule (PFS) and from any location, including from the practitioner’s home. CMS has approved an interim payment rate of $92 for RHCs and FQHCs for these services. The rate is based on the average payment for all PFS telehealth services, weighted by the volume of those services paid under the PFS. This rate will apply for services furnished between January 27, 2020 and June 30, 2020. Modifier “95” must be included on the claim. In July 2020, these claims will be automatically reprocessed and be paid at the RHC all-inclusive rate (AIR) and the FQHC prospective payment system (PPS) rate. Reprocessing will begin when the Medicare claims processing system is updated for the new payment rate.

For telehealth distant site services furnished between July 1, 2020 and the end of the COVID-19 PHE, RHCs and FQHCs will need to use RHC/FQHC specific G code, G2025, for services provided via telehealth. These claims will be paid at the $92 rate, not the AIR or PPS rates. If the COVID-19 PHE continues beyond December 31, 2020, the $92 will be updated based on the 2021 PFS average payment rate for these services, again weighted by the volume of those services.

For services in which the coinsurance is waived, RHCs and FQHCs must put the “CS” modifier on the service line. RHC and FQHC claims with the “CS” modifier will be paid with the coinsurance applied, and the Medicare Administrative Contractor (MAC) will automatically reprocess these claims beginning on July 1. Coinsurance should not be collected from beneficiaries if the coinsurance is waived.

UPDATED: Will telehealth visits of any kind affect my FQHC or RHC encounter rate?
Costs associated with telehealth will not affect the prospective payment system rate for FQHCs or the all-inclusive rate calculation for RHCs, but the costs will need to be reported on the cost report. Costs of originating and distant site telehealth services will be reported as follows:

  • Form CMS-222-17 on line 79 (Cost Other Than RHC Services) of Worksheet A for RHCs
  • Form CMS-224-14 on line 66 (Other FQHC Services) of Worksheet A for FQHCs.

What is telehealth versus telemedicine?
Telemedicine refers to a remote clinical service while telehealth is a broader term that embodies a consumer-based approach to medical care, incorporating both delivery of care and education of patients.

UPDATED: What types of service levels are available?
There are three main types of Medicare virtual services with different payment levels. Here are the key things to know for each type:

Telehealth visits

  1. These are considered the same as in-person visits and paid at the same PFS rates as regular, in-person visits.
  2. Pre-existing patient relationship requirements have been waived.
  3. The patient originating site can be any healthcare facility or the patient’s home.

Virtual check-ins

  1. These are brief communications in a variety of technology-based manners.
  2. They do require the patient to initiate and consent to the check-in.
  3. It cannot be preceded by a medical visit within the previous 7 days and cannot lead to a medical visit within the next 24 hours. 
  4. A pre-existing relationship with the patient is required.
  5. Common billing codes include HCPCS code G2012 (telephone) and G2010 (captured video or images).

E-visits:

  1. These also need to be initiated by the patient in order to be billable and would be conducted using online patient portals (no face-to-face), for example.
  2. A pre-existing relationship with the patient is required.
  3. Common billing codes include CPT codes 99421-99423 and HCPCS codes G2061-G2063. 

The payment rate for these services will be $24.76 beginning March 1, 2020, through the end of the PHE, instead of the CY 2020 rate of $13.53, and should be billed using code G0071. MACs will automatically reprocess any claims with G00771 furnished on or after March 1, 2020, that were not paid at the new rate.

What codes can be billed as telehealth services?
Here is the listing effective as of March 1, 2020. 

Since this time, 85 additional codes have been added. Click here for the list. 

Do we need to request an 1135 waiver or are these changes covered by a blanket waiver from CMS?
A blanket waiver is in effect, retroactive to March 1, 2020 though the end of the emergency declaration. 

Is patient consent required?
Yes, patients must verbally consent to services. This includes brief telecommunications (which currently have a cost share for Medicare). We recommend it for all payers as a best practice.

Is there additional information expected from Medicare?
Yes, Medicare, Medicaid, and other payers are continually updating their guidance. 

What can we bill for telehealth services for Medicaid and insurance carriers?
This is the most problematic to track as it is continually evolving and every state and carrier is different. Providers must understand each payor’s requirements around audio and video, allowable CPT/HCPCS codes, modifiers, and place of service codes. As you have questions, please reach out to us so we can be sure to provide the most current answer.

Resources
Given how quickly information related to telehealth is changing, please feel free to contact us for the latest resources. 

Article
Telehealth FAQs

Read this if you use QuickBooks Online.

You should be running reports in QuickBooks Online on a weekly—if not daily—basis. Here’s what you need to know.

You can do a lot of your accounting work in QuickBooks Online by generating reports. You can maintain your customer and vendor profiles. Create and send transactions like invoices and sales receipts, and record payments. Enter and pay bills. Create time records and coordinate projects. Track your mileage and, if you have employees, process payroll.

These activities help you document your daily financial workflow. But if you’re not using QuickBooks Online’s reports, you can’t know how individual elements of your business like sales and purchases are doing. And you don’t know how all of those individual pieces fit together to create a comprehensive picture of how your business is performing. 

QuickBooks Online’s reports are plentiful. They’re customizable. They’re easy to create. And they’re critical to your understanding of your company’s financial state. They answer the small questions, like, How many widgets do I need to order?, and the larger, all-encompassing questions like, Will my business make a profit this year?

Getting the lay of the land

Let’s look at how reports are organized in QuickBooks Online. Click Reports in the toolbar. You’ll see they are divided into three areas that you can access by clicking the labeled tabs. Standard refers to the comprehensive list of reports that QuickBooks Online offers, displayed in related groups. Custom reports are reports that you’ve customized and saved so you can use the same format later. And Management reports are very flexible, specialized reports that can be used by company owners and managers.


A partial view of the list of QuickBooks Online’s Standard reports 

Standard reports

The Standard Reports area is where you’ll do most—if not all—of your reporting work. The list of available reports is divided into 10 categories. You’re most likely to spend most of your time in just a few of them, including:

  • Favorites. You’ll be able to designate reports that you run often as Favorites and access them here, at the top of the list.
  • Who owes you. These are your receivables reports. You’ll come here when you need to know, for example, who is behind on making payments to you, how much individual customers owe you, and what billable charges and time haven’t been billed.
  • Sales and customers. What’s selling and what’s not? What have individual customers been buying? Which customers have accumulated billable time?
  • What you owe. These are your payables reports. They tell you, for example, which bills you haven’t paid, the total amount of your unpaid bills (grouped by days past due), and your balances with individual vendors.
  • Expenses and vendors. What have I purchased (grouped by vendor, product, or class)? What expenses have individual vendors incurred? Do I have any open purchase orders?

The Business Overview contains advanced financial reports that we can run and analyze for you. The same goes for the For my accountant reports. Sales tax, Employees, and Payroll will be important to you if they’re applicable for your company.

Working with individual reports


Each individual report in QuickBooks Online has three related task options.

To open any report, you just click its title. If you want more information before you do that, just hover your cursor over the label. Click the question mark to see a brief description of the report. If you want to make the report a Favorite, click the star so it turns green. And clicking the three vertical dots opens the Customize link. 

When you click the Customize link, a vertical panel slides out from the right, and the actual report is behind it, grayed out. Customization options vary from report to report. Some are quite complex, and others offer fewer options. The Sales by Customer Detail report, for example, provides a number of ways for you to modify the content of your report so it represents exactly the “slice” of data you want. So you can indicate your preferences in areas like:

  • Report period
  • Accounting method (cash or accrual)
  • Rows/columns (you can select which columns should appear and in what order, and group them by Account, Customer, Day, etc.)
  • Filter (choose the data group you want represented from several options, including Transaction Type, Product/Service, Payment Method, and Sales Rep)

Once you’ve run the report, you can click Save customization in the upper right corner and complete the fields in the window that opens. Your modification options will then be available when you click Custom reports, so you can run it again anytime with fresh data.


You can customize QuickBooks Online’s reports in a variety of ways.

We’ll go into more depth about report customization in a future article. For now, we encourage you to explore QuickBooks Online’s reports and their modification options so that you’re familiar with them and can put them to use anytime. Contact our Outsourced Accounting team if you have any questions about the site’s reports, or if you need help making your use of QuickBooks Online more effective and productive.

Article
Getting started with reports in QuickBooks Online

Read this if you are a financial institution.

As you know by now, ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326), better known as the CECL standard, has already been implemented for some and will soon be implemented for all others (fiscal years beginning after December 15, 2022 to be exact). During your implementation process, the focus has likely been on your loan portfolio, and rightfully so, as CECL overhauls 40+ years of loan loss reserve practices. But, recall that the CECL standard applies to all financial instruments carried at amortized cost. So, it therefore includes held-to-maturity (HTM) debt securities. And, although not carried at amortized cost, the CECL standard also makes targeted enhancements to available-for-sale (AFS) debt securities. As if re-hauling your entire allowance methodology wasn’t enough! Before tearing out your hair because of another CECL-related change, let’s quickly review what is currently required for securities, and then focus on how this will change when you implement CECL.

Current US GAAP

Under current US generally accepted accounting principles (GAAP), direct write-downs on HTM and AFS debt securities are recorded when (1) a security’s fair value has declined below its amortized cost basis and (2) the impairment is deemed other-than-temporary. This assessment must be completed on an individual debt security basis. Providing a general allowance for unidentified impairment in a portfolio of securities is not appropriate. The previous amortized cost basis less the other-than-temporary impairment (OTTI) recognized in earnings becomes the new amortized cost basis and subsequent recoveries of OTTI may not be directly reversed into interest income. Rather, subsequent recoveries of credit losses must be accreted into interest income.

CECL: Held-to-maturity securities

Then comes along CECL  and changes everything. Once the CECL standard is implemented, expected losses on HTM debt securities will be recorded immediately through an allowance for credit loss (ACL) account, rather than as a direct write-down of the security’s cost basis. These securities should be evaluated for risk of loss over the life of the securities. Another key difference from current GAAP is that securities with similar risk characteristics will need to be assessed for credit losses collectively, or on a pool basis, not on an individual basis as currently prescribed. Also, contrary to current GAAP, since expected losses will be recorded through an ACL account, subsequent improvements in cash flow expectations will be immediately recognized through earnings via a reduction in the ACL account. CECL effectively eliminates the direct write-down method, with write-offs only occurring when the security, or a portion thereof, is deemed to be uncollectible. 

In practice, there may be some types of HTM debt securities that your institution believes have no risk of nonpayment and thus risk of loss is zero. An example may be a US Treasury debt security or possibly a debt security guaranteed by a government-sponsored enterprise, such as Ginnie Mae or Freddie Mac. In these instances, it is acceptable to conclude that no allowance on such securities is necessary. However, such determination should be documented and changes to the credit situation of these securities should be closely monitored.

Financial institutions that have already implemented CECL have appreciated its flexibility; however, just like anything else, there are challenges. One of the biggest questions that has risen is related to complexity, specifically from financial statement users in regards to the macroeconomic assumptions used in models. Another common challenge is comparability to competitors’ models and estimates. Each financial institution will likely have a different methodology when recording expected losses on HTM debt securities due to the judgment involved. These concerns are not unique to the ACL on HTM debt securities but are nonetheless concerns that will need to be addressed. A description of the methodology used to estimate the ACL, as well as a discussion of the factors that influenced management’s current estimate of expected losses must be disclosed in the financial statements. Therefore, management should ensure adequate information is provided to address financial statement users’ concerns.  

CECL: Available-for-sale securities

Upon CECL adoption, you are also expected to implement enhancements to existing practices related to AFS debt securities. Recall that AFS debt securities are recorded at fair value through accumulated other comprehensive income (AOCI). This will not change after adoption of the CECL standard. However, the concept of OTTI will no longer exist. Rather, if an AFS debt security’s fair value is lower than its amortized cost basis, any credit related loss will be recorded through an ACL account, rather than as a direct write-down to the security. This ACL account will be limited to the amount by which fair value is below the amortized cost basis of the security. Credit losses will be determined by comparing the present value of cash flows expected to be collected from the security with its amortized cost basis. Non-credit related changes in fair value will continue to be recorded through an investment contra account and other comprehensive income. So, on the balance sheet, AFS debt securities could have an ACL account and an unrealized gain/loss contra account. The financial institution will be responsible for determining if the decline in the value below amortized cost is the result of credit factors or other macroeconomic factors. In practice, the following flowchart may be helpful:

Although changes to debt securities may not be top of mind when working through CECL implementation, ensuring you reserve time to understand and assess the impact of these changes is important. Depending on the significance and composition of your institution’s debt security portfolio, these changes may have a significant impact on your financial institution’s financial statements from CECL adoption forward. For more information, visit the CECL page on our website. If you would like specific answers to questions about your CECL implementation, please visit our Ask the Advisor page to submit your questions.

Article
Don't forget about me! Changes in debt security accounting resulting from CECL 

Read this if you are at a financial institution.

While documentation of your CECL implementation and ongoing practices is essential to a successful outcome, it can sometimes feel like a very tall order when you are building a new methodology from the ground up. It may help to think of your CECL documentation as your methodology blueprint. While others will want to see it, you really need it to ensure that what you are building is well-designed, structurally sound, appropriately supported, and will hold up to subsequent “renovations” (model changes or tweaks). To help you focus on what’s essential, consider these documentation tips:

Getting started

Like any good architect, you need to understand the expectations for your design—what auditors and regulators want to see in your documentation. Two resources that can really help are the AICPA Practice Aid: Allowance for credit losses-audit considerations1, and the Interagency Supervisory Guidance on Model Risk Management2. One way to actively use these guides is to take note of the various section/subject headers and the key points, ideas, and questions highlighted within each, and turn that into your documentation checklist. You’ll also want to think strategically about where to keep the working document, who needs access to it, and how to maintain version control. It is also a good idea to decide up-front how you will reference, catalog, and store the materials (e.g., data files, test results, analyses, committee minutes, presentations, approvals, etc.) that helped you make and capture final decisions. You can download our CECL Documentation checklist now.   

What to watch out for

What’s new under CECL are areas requiring documentation (e.g., broader scope of “financial assets,” prepayments, forecasts, reversion, etc.). But watch out for elements that seem familiar—they may now have a new twist (e.g., segmentation, external data, Q factors, etc.). It’s a good idea to challenge any documentation from the past that you feel could be re-purposed or “rolled into” your CECL documentation. Be prepared also to spend time explaining or customizing vendor-provided documents (e.g., model design and development, data analysis memos, software procedures, etc.). 

While this material can give you a running start, they will not on their own satisfy auditor and regulator expectations. Ultimately, your documentation will need to reflect your own understanding and conclusions: how you considered, challenged, and got comfortable with the vendor’s work; what validations and testing you did over that work, and how you’ve translated this into policies and procedures appropriate for your institution’s operations, workflows, governance, and controls. For more information on making the vendor decision, and for suggestions of vendor selection criteria, read our previous article “CECL Readiness: Vendor or no vendor?” 

Point of view

It is human nature, especially whenever entering new territory, to want to know how others are approaching the task at hand. Related to CECL, networking, joining peer discussion groups, researching what and how those who have already adopted CECL are disclosing, are all great ways to see possibilities, learn, and gain perspective. When it comes to CECL documentation, however, the most important point of view to communicate is that of your institution’s management. Consider the difference in these two documentation approaches: (a) we looked at what others are doing, this is what most of them seem to be doing, so we are too; or (b) this is what we did and why we feel this decision is the best for our portfolio/risk profile; as part of our decision-making process, we did this type of benchmarking and discovered this. Example b is stronger documentation: your point of view is the primary focus, making it clear you reached your own conclusions. 

Other elements for CECL documentation

Documenting your CECL implementation, methodology, and model details is critical, but not the only documentation expected as you transition to CECL. It has been said that CECL is a much more enterprise-wide methodology, meaning that some of the model decisions or inputs may require you use data and assumptions traditionally controlled in other departments and for other purposes. One common example of this is prepayments. Up to this point, prepayment data may have been something between management and a vendor and used for management discussion and planning, but not necessarily validated, tested, or controlled for in the same way as your loss model calculations. Under CECL, this changes specifically because it is now an input into the loss estimate that lands in your financial statements. As a result, prepayments would be subject to, for example, “accuracy and completeness” considerations, among others (for more information on these expectations, refer to our earlier articles on data and segmentation). Prepayments is just one example, but does illustrate how CECL adoption will likely trigger updates to policies, procedures, governance, and controls across multiple areas of the organization.    

One final note: There are some new financial statement disclosures required with CECL adoption. Beyond those, there may be other CECL-related information either you want to share, or your audit/tax firm recommends be disclosed. Consulting with your auditor at least a quarter prior to adoption will help make sure you aren’t scrambling last minute to draft new language or tables.  

Struggling with CECL documentation or other elements of CECL? 

No matter what stage of CECL readiness you are in, we can help you navigate the requirements as efficiently and effectively as possible. For more information, visit the CECL page on our website. If you would like specific answers to questions about your CECL implementation, please visit our Ask the Advisor page to submit your questions.

For more tips on documenting your CECL adoption, stay tuned for our next article in the series. You can also follow Susan Weber on LinkedIn.

1You can find the AICPA Practice Aid here.
2The interagency guidance was released as OCC Bulletin 2011-12, FRB SR 11-7, and as FDIC FIL 22-2017

 

Article
CECL documentation: Your methodology blueprint