Regulatory and Industry News Alerts from Armanino

COVID-19 Provider Relief Fund Phase 4 Opens Sept. 29, 2021

by Naz Bhangal
September 29, 2021

The Biden administration recently announced Phase 4 of the Provider Relief Fund (PRF) disbursements for a broad range of providers who can document lost revenues and changes in operating expenditures between July 1, 2020, and March 31, 2021. Here are some tips to help you prepare your application.

How to Prepare for the Phase 4 Application Process

Register your organization on the Provider Relief Fund portal, which is where you will apply for and attest to relief fund payments. The application portal opens September 29. To prepare for your Phase 4 application, we recommend you accumulate the following trial balances or P&Ls for these date ranges:

  • July 1, 2020, to September 30, 2020, or 2020 Q3
  • October 1, 2020, to December 31, 2020, or 2020 Q4
  • January 1, 2021, to March 31, 2021, or 2021 Q1

Using these reports, you would calculate the following, as these items may be required on the application:

  • Measure lost revenues by comparing the revenues (net of contractual allowances) from the quarters above to the equivalent quarters in 2019. Revenues should be measured net of any amounts that are not contractually collectible based on the rates at which insurance reimburses.
    • Each quarter should be analyzed separately and all quarters in which lost revenues are demonstrated should be aggregated.
    • Applicants have another option to compare the revenues from the periods above to budgeted revenues if certain conditions are met.
  • Measure changes in operating expenses used to prevent, prepare for and respond to COVID.

What If You Received Other PRF Disbursements?

There are terms, conditions and reporting requirements if you received prior PRFs.

In prior phases, recipients generally have 12 to 18 months to exhaust these funds for allowable purposes. In most cases, the applicant can apply expenses incurred prior to the payment date if they are of an allowable nature. Expenses that were reimbursed by other sources of funding, including the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan (EIDL) program, cannot be double counted as expenses reimbursed by the PRF disbursement.

Also, the receipt of prior PRF funds is taxable, unlike the cancellation of PPP debt. Additionally, if a provider receives $750K or more, they are subject to a Single Audit requirement, which is essentially an audit performed solely to test the receipt and use of the funds. We anticipate that similar requirements will be part of the Phase 4 distribution.

60-day Grace Period for the First PRF Reporting Time Period

Providers have been given a 60-day grace period to submit their Period 1 reports, originally due on September 30, 2021. This does not change the previously announced period of applicability but does give providers additional time to submit their report.

See the Provider Relief Fund FAQs for more details.

If you have questions or need assistance with your application, contact our experts.

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Naz Bhangal, Tax, Armanino
Senior Manager
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