Feds Focus New COVID Relief on Rural Areas, Give Grace Period on Previous Reporting Deadline
By Emma Freer

The Biden administration has announced plans to distribute $25.5 billion in funding to physicians, hospitals, and other health care facilities affected by the COVID-19 pandemic as part of the Provider Relief Fund (PRF), and the portal for funding applications opened on Wednesday, Sept. 29.

In addition, physicians who face a reporting deadline next week for previous rounds of PRF funding have a new two-month grace period before enforcement begins.

Texas Medical Association President E. Linda Villarreal, MD, says the Sept. 10 announcement is good news for physicians as the pandemic – and its financial consequences – drag on. “The relief funding will hopefully protect and keep some of our physicians [afloat] who were on the brink of closing down,” she said.

The funding includes $8.5 billion for physicians and others serving rural patients enrolled in Medicaid, the Children’s Health Insurance Program (CHIP), or Medicare, and $17 billion for those who can document revenue losses and operating expenses related to the pandemic between July 1, 2020, and March 31, 2021, according to the U.S. Department of Health and Human Services (HHS).

The federal government will use the first pool of funding to pay recipients based on the amount of Medicaid, CHIP, and Medicare services they provide to patients who live in rural areas as defined by HHS’ Federal Office of Rural Health Policy. Rural areas have been hit particularly hard by the pandemic and tend to have lower vaccination rates, according to the Centers for Disease Control and Prevention.

Dr. Villarreal, an internist in Edinburg, says rural physicians often work in small practices and largely depend on government payers, whose rates have not kept pace with rising costs. The pandemic only further narrowed their margins, and some were forced to close their doors. This funding could help those remaining stay open, which is critical in medically underserved areas.

“Physicians will do anything to take care of their patients,” she said. “But at the end of the day, a physician practice is still a business.”

The $17 billion pool of funding is part of the fourth phase of the PRF, which will pay smaller and solo practices at a higher rate than larger practices and hospitals for their lost revenues and COVID-19 expenses. The relief also will provide bonus payments to those who serve Medicaid, CHIP, and Medicare patients, who tend to be lower-income and have more complex medical needs.

“The funding will be distributed with an eye towards equity, to ensure providers who serve our most vulnerable communities will receive the support they need,” HHS Secretary Xavier Becerra said in a statement.

The application portal will close on Oct. 26, 2021 at midnight. To minimize administrative burdens, HHS will use existing claims data to calculate bonus payments to eligible practices. If a practice seeks funding to offset COVID-19 revenue losses, it must provide documentation to substantiate the losses.

Additional eligibility information will be forthcoming. In the meantime, TMA staff encourage physicians to:

During previous phases of the PRF, HHS has hosted webinars to answer questions about the application process. TMA will keep members informed of any such event.

HHS also announced a 60-day grace period for recipients of previous rounds of funding. The first reporting deadline is Sept. 30, but the federal government will not initiate any recoupment or enforcement actions through Nov. 30. Any unused funding must be returned no later than Dec. 30. 

Last Updated On

September 29, 2021

Originally Published On

September 22, 2021

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Emma Freer


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Emma Freer is a reporter for Texas Medicine. She previously worked in local news, covering city politics, economic development, and public health. A native Clevelander, she graduated from Columbia Journalism School and the University of St. Andrews.

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