October 23, 2020 – The U.S. Department of Health and Human Services (HHS) has reversed a change made in September to COVID-19 relief grant reporting. The change comes in response to hospitals warning that it could result in many needing to return funds meant to offset coronavirus-related expenses or lost revenue.
The new change, posted Oct. 22, allows hospitals to calculate lost revenue by comparing revenue from all of 2019 to 2020.
In June, HHS said that hospitals could calculate lost revenue by comparing actual or budgeted revenue for 2019 and 2020. However, in September, HHS amended the reporting requirement and said providers had to instead compare net operating income.
HHS said the September formula change was made to “restrict some providers from receiving distributions that would make them more profitable than they were before the pandemic.”
Hospitals argued that the September formula change and definition of lost revenue would “require many hospitals to return [provider relief funds]” and included a set of metrics that were simply “unfair and unrealistic.”
Although the new change corrects some of the issues that providers had, many are concerned that the changes don’t go far enough.
The lost revenue calculation could penalize hospitals that expanded their reach in some way in late 2019 or early 2020, as their revenue may be higher in 2020 because they bought a new hospital, but it was still lower than the budgeted amount.