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CARES Act Required Healthcare Provider Reporting: Are You Ready?

healthcare financial statements

The Coronavirus Aid, Relief and Economic Security (CARES) Act provided $50 billion of funding to help providers as they face falling revenue and increased costs while taking care of COVID-19 patients. These funds are intended for providers who take care of Medicare patients and have treated individuals with actual or possible cases of COVID-19. This funding was released in two tranches: the original $30 billion and an additional $20 billion.

This funding comes with some conditions in the form of reporting requirements. Hospitals and large provider organizations typically have the IT systems in place to be able to support these requirements and produce the reports relatively easily. However, smaller provider organizations may need to pay extra attention to the requirements to ensure they can meet the conditions.

HHS revised the conditions with this second round of funding, providing more detail on the required reporting. Providers need to be aware of these conditions as they accept funds. A high-level summary of these requirements reveals that providers must:

  • Submit general revenue data for calendar year 2018 when applying to receive or within 30 days of having received payment
  • Certify that the information provided is true, accurate, and complete (any provider who does not respond within 30 days is assumed to have attested to this)
  • Report within 10 days of the end of the quarter (if receiving more than $150,000 from any coronavirus response legislation, not just the CARES Act):
    • Amount of funds received from HHS for each project or activity and the jobs created or retained for each project or activity
    • Detailed information for any subcontracts with the data elements required under the Federal Funding Accounting and Transparency Act of 1996
  • Retain records and cost documentation for future audits and inquiries
  • Agree to have the amount received under the CARES Act disclosed publicly

Now is the time to talk to the business office to put the right information in place to meet these conditions. Expect to be audited later and have traceable, documented records available to justify the funds you receive. LaPorte recommends you:

  • Create a separate Cost Center for COVID-19 related costs.
  • Add separate general ledger accounts to capture all non-payroll costs related to COVID-19.
  • Create time studies to document the full-time equivalents on staff during the period of reacting to the pandemic.
  • Document additional payroll costs such as shift differential and overtime pay incurred.
  • Document how you determined what supplier you purchased from when purchasing supplies outside of your Group Purchasing Organization. Retain bids from various providers, or any evidential matter to support the reasonableness of the price paid for those supplies.
  • Track the value of supplies contributed.
  • Determine and document how you will calculate any lost revenue (monthly average, affected months) and document your calculations to make sure you can justify the amount.

LaPorte will continue to update you as HHS provides additional guidance. In the meantime, we understand that determining how to calculate these ratios and track these costs can be overwhelming. If you need additional assistance meeting the requirements of the CARES Act and other federal coronavirus funding, please reach out to a LaPorte professional.