On September 1, 2020, the U.S. Department of Health and Human Services (HHS) announced that assisted living facilities (ALFs) may now apply for funding under the Provider Relief Fund (PRF) Phase 2 General Distribution allocation. Funding for this program is through the CARES Act and the Paycheck Protection Program and Health Care Enhancement Act. The funding is intended to address both the economic harm and additional expenses caused by the COVID-19 pandemic. 

In its announcement, HHS noted that nearly one million older adults live in an estimated 28,000 ALFs across the U.S. and are particularly vulnerable to COVID-19. HHS also highlighted the financial hardships faced by ALFs as they deal with increased health care related costs associated with implementing COVID-19-related CDC recommendations, with HHS Secretary Alex Azar stating, “HHS is committed to ensuring America’s healthcare providers have what they need to protect their patients and continue providing care through the pandemic.”

The program provides eligible ALFs access to stimulus funds in an amount up to 2% of their annual revenue from “patient care.” “Patient care” means health care, services, and supports, as provided in a medical setting, at home, or in the community to individuals who may currently have or be at risk for COVID-19, with all patients being considered a possible case of COVID-19. When applying, ALFs may include patient care revenue that supports residents’ nutritional, housing, activities of daily living, and medical needs, including purchased services. PRF payments may only be used to prevent, prepare for, and respond to coronavirus and to reimburse for “health care-related expenses” or “lost revenues that are attributable to coronavirus.”

“Health care-related expenses” may include the cost of supplies and equipment used to provide health care services for possible or actual COVID-19 patients, workforce training, reporting COVID-19 test results to federal, state, or local governments, building or constructing temporary structures to expand capacity for COVID-19 patient care or to provide health care services to non-COVID-19 patients in a separate area from where COVID-19 patients are being treated, and acquiring additional resources, including facilities, equipment, supplies, health care practices, staffing, and technology to expand or preserve care delivery. “Lost revenues” means any revenue that a health care provider lost due to coronavirus and may include revenue losses associated with fewer outpatient visits, canceled elective procedures or services, or increased uncompensated care. HHS expressly encourages the use of PRF payments to cover lost revenue so that providers can respond to the COVID-19 public health emergency in a manner that maintains health care delivery capacity. 

Participating ALFs receiving PRF payments will be required to attest and agree to PRF Terms and Conditions and comply with HHS’s reporting requirements. The terms and conditions provide that the receipt of funds will be publicly disclosed, they grant records access to HHS, and they require ALFs to submit to audit requirements. Furthermore, ALFs will need to comply with additional statutory requirements. ALFs should ensure they implement compliance programs to meet PRF requirements, as many of these requirements will likely be new if an entity is not accustomed to receiving federal health care funds.

Interested ALFs must act quickly as HHS has set September 13, 2020 as the deadline for submitting their tax identification number for validation and applying for funding from the Phase 2 General Distribution.

ALFs can learn more about the application process by clicking here and may start their application by clicking here. The federal, state, and local policies in this area are continuously evolving.