HRSA Initiates Audits and Requires Return of Provider Relief Funds

Throughout the course of the pandemic, the US Department of Health and Human Services (HHS) distributed $178 billion in Provider Relief Funds (PRF) to hospitals and health care providers.  The Public Health Emergency has ended, and now HHS is now turning an eye to how the money was spent, and whether it was spent properly.  

PRF funds were distributed with nearly no-strings-attached; hospitals and providers had to simply agree to a few terms and conditions.  Yet a number of facilities and providers have received one of two types of letters from HHS: (1) a letter stating the money must be returned—a Final Repayment Notice—or (2) a letter stating that HHS will be conducting an audit.  What do these letters really mean?  What should you do?  

Provider Relief Funds: What To Expect 

Providers who received a total of more than $10,000 in PRF funds were required to report on the use of funds during one of nine reporting periods, depending on when the funds were received.  For those who failed to report during the reporting periods, the Health Resources and Services Administration (HRSA) issued several reminders, deadline extensions, and finally began issuing requests for repayment.  After all of these notices, HRSA has started to issue Final Repayment Notices.

Is a final notice really final?

A Final Repayment Notice will say something to the effect of “Debt is owed to HRSA as a result of failure to comply with the Terms and Conditions of funding received through the Provider Relief Fund,” and will enumerate the total amount due.  

A provider who has received a Final Repayment Notice has 60 days to either return PRF payments to HRSA, arrange for a payment plan, or submit a request for a Decision Review.  The outcome of the Decision Review is considered by HRSA to be final and is not appealable.  HRSA’s position is that the scope of a Decision Review is limited to contesting repayment only, and that the period for contesting the calculation or amount of repayment has closed.   However, to date, HRSA has not published binding regulations on point. We have observed that the Decision Review process is relatively quick, taking on average two to three weeks—because the decision is usually “no” with an instruction to return the funds.   After an adverse and final answer to the provider’s Decision Review, the only option left if the amount in controversy is financially significant is to seek judicial review in federal court.

Epstein Becker Green attorneys can help you to negotiate payment terms with HRSA and to evaluate possible options in the event of a final adverse decision.  The facts and circumstances of an individual case may vary, but it is important to understand your rights and options as early as possible.