Providers who received federal relief funds in the first few months of the Covid-19 pandemic must arrive by September 30 Report how they used the moneyBut the ambiguity of the reporting requirements makes this seemingly simple task quite complicated.
this Provider relief fundDistributed under the Coronavirus Aid, Relief, and Economic Security Act passed last year, it aims to support providers who have increased expenditures and decreased revenues directly due to the pandemic. So far Approximately 178 billion U.S. dollars Allocated through the fund. Providers who have received more than US$10,000 must report their use of funds at different stages.The first stage, the deadline is September 30, is applicable to all providers who receive funds April 10 to June 30 last year.
However, there are several factors related to the report that cause provider anxiety.
Mark Polston, a health care partner at law firm King & Spalding and former deputy general counsel for litigation, said that people are not only worried about whether they have calculated fees correctly, but there are also questions about which fees can be considered “Covid-related” questions. Medical Insurance and Medicaid Service Center.
For example, certain medical supplies, such as gowns, masks and gloves, will be used for Covid care, but they may also be used for other purposes.
“Then how do you calculate your proposition [Covid] cost [are] It is related to protective clothing, masks and gloves,” Bolston said in a telephone interview.[How do you know] That is… the part related to the coronavirus and the part you spend on masks, gloves and protective clothing that are not related to the coronavirus [the virus], That’s just your basic cost. “
Therefore, vendors are designing their own methods to try to calculate Covid-related costs compared to the baseline. He added that it is not yet clear whether the government will vigorously review these methods.
Changing government guidelines have made the problem worse.
In early 2020, the government created a Frequently Asked Questions section for the Provider Relief Fund. Initially they told providers to have a broad understanding of what can be considered as pandemic-related expenses-basically anything that helps keep the facility’s doors open. Poulston said.
But the statement is no longer common problem, Raised the question of how wide the explanation of the cost should be.
“At Spectrum Health, one of the biggest challenges we face is the ever-changing federal guidelines about what is eligible for CARES Act funding and how to account for these funds,” said Celeste McIntyre, senior vice president and corporate finance director . The health system in Grand Rapids, Michigan, in an email. “A lot of financial resources have been spent on consultants and accountants to interpret the regulations.”
Although the government has clarified some initial issues, the guidelines are frequently updated and strengthened.
“As more than 61 pages of FAQs are revised and updated, organizations need to constantly check for new requirements,” McIntyre said.
When multiple entities are involved (such as mergers or acquisitions), the accounting for the use of funds under the CARES Act becomes more complicated.
“[These deals now raise] Bigger and more relevant issues,” said Polston of King & Spalding. “If the target [of the merger of acquisition] When funds are used for expenditure or loss of income, how does the acquiring company know whether the funds are used properly? “
Although M&A activity has Continue during the pandemic, A higher level of due diligence is required, because the accounting treatment of CARES funds also needs to be checked.
But regardless of the remaining issues, the September 30 deadline is imminent, and suppliers need to take specific steps to explain their spending on federal funds to the best of their ability based on the information they now have. Polston recommends practicing under the assumption that your organization will face an audit.
This means thinking ahead of time how your organization will complete the report and how you will defend the method used to report funds.
“There is a feeling in the industry that the plan is so large, and the reports are so extensive, and the number of suppliers that will be reported is so large that you can hide in the weeds,” Bolston said. “Only when you persevere, this is a problem for you. I think this is a false sense of security.”
Photo: Julia_Sudnitskaya, Getty Images
