The Centers for Medicare & Medicaid Services (CMS) has provided guidance on how to report Payment Relief Funds (PRF) and Expenses on the Medicare Cost Report through an FAQ.
The below excerpt was taken from the FAQ. To download a copy of the FAQ, please click on this link.
Question: How will the Provider Relief Fund (PRF) payments be reported on the Medicare Cost Report in terms of revenue?
All providers must report the PRF payments on the cost report’s statement of revenues for informational purposes. The revenue amount must be identified as COVID-19 PHE PRF. PRF payment amounts must be reported in aggregate on the following forms:
- hospital, form CMS-2552-10, Worksheet G-3, line 24.50;
- Skilled Nursing Facility, form CMS-2540-10, Worksheet G-3, line 24.50;
- HHA, form CMS-1728-94, Worksheet F-1, line 31.50;
- hospice, form CMS-1984-14, Worksheet F-2, column 3, line 16.50;
- ESRD, form CMS-265-11, Worksheet F-1, line 31.50;
- FQHC, form CMS-224-14, Worksheet F-1, line 28.50; and
- CMHC, form CMS-2088-17, Worksheet F, line 20.50
Question: How will the Small Business Administration (SBA) Loan Forgiveness amounts be reported on the Medicare Cost Report in terms of revenue?
If a provider receives forgiveness for the SBA loan, or any portion thereof, the provider must report the forgiven amount on the cost report’s statement of revenues for informational purposes. The loan forgiveness amount must be reported in aggregate, on the same cost report forms, worksheets, and lines as noted above for the PRF payments in Question 1. If the provider does not receive forgiveness for the SBA loan, or any portion thereof, the provider reports no forgiven amounts on the Medicare cost report. If the provider pays interest on any portion of the SBA loan, the provider may report the interest expense, similar to other interest expenses, on the cost report.
Question: Should PRF payments offset expenses on the Medicare cost report?
No, providers should not adjust the expenses on the Medicare cost report based on PRF payments received. However, providers must adhere to HRSA’s guidance regarding appropriate uses of PRF payments, in order to ensure that the money is used for permissible purposes (namely, to prevent, prepare for, or respond to coronavirus, and for health care related expenses or lost revenues that are attributable to coronavirus) and that the uses of the PRF payments do not violate the prohibition on using PRF money to reimburse expenses or losses that have been reimbursed from other sources or that other sources are obligated to reimburse.
Recipients may find additional information on the terms and conditions of the PRF at: https://www.hrsa.gov/provider-relief/past-payments/terms-conditions
Questions regarding use of the funds, pursuant to the Fund Terms and Conditions and any questions about overpayments should be directed to HRSA.
Question: Should SBA loan forgiveness amounts offset expenses on the Medicare cost report?
No. Do not offset SBA Loan Forgiveness amounts against expenses unless those amounts are attributable to specific claims such as payments for the uninsured. The Paycheck Protection Program loan administered by the SBA is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll. The terms and conditions of the SBA loan forgiveness, overseen by the SBA, include employee retention criteria, and the funds must be used for eligible expenses.
Recipients may find additional information at:
Question: Should hospitals report charges reimbursed through the PRF Uninsured Program on Worksheet S-10?
Subsection (d) hospitals that receive PRF payments from the Uninsured Program must not report charges reimbursed through that program for uninsured COVID-19 patients on Worksheet S-10 of the Medicare cost report.
Question: Should PRF payment amounts for lost revenue not directly attributable to patient-specific claims be used to offset expenses on the Medicare cost report?
PRF payment amounts that are not attributable to patient-specific claims and are not PRF payment amounts from the Uninsured Program, should not be used to offset expenses on the Medicare cost report. Providers must adhere to HRSA’s guidance regarding appropriate uses of PRF payments, in order to ensure that the money is used for permissible purposes (namely, to prevent, prepare for, or respond to coronavirus, and for health care related expenses or lost revenues that are attributable to coronavirus) and that the uses of the PRF payments do not violate the prohibition on using PRF money to reimburse expenses or losses that have been reimbursed from other sources or that other sources are obligated to reimburse.
Question: Can I claim my “employer’s share of Social Security tax” that I elected to defer in accordance with section 2302 of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, as an accrued liability in the year the costs were incurred?
Yes, in limited circumstances only. Section 2302 of the CARES Act provides that employers may defer the deposit and payment of the employer’s portion of Social Security taxes and certain railroad retirement taxes (collectively referred to as the “employer’s share of Social Security tax”). The deferral applies to deposits and payments of the employer’s share of Social Security tax that would otherwise be required to be made during payroll tax deferral period that begins on March 27, 2020, and ends December 31, 2020. Providers that elect to take advantage of this payment deferral may expense this liability on the Medicare cost report in the year the costs were incurred in accordance with 42 CFR 413.100(c)(2)(i)(B), which states that “if, within the 1-year time limit, the provider furnishes to the contractor sufficient written justification (based upon documented evidence) for nonpayment of the liability, the contractor may grant an extension for good cause. The extension may not exceed 3 years beyond the end of the cost reporting period in which the liability was incurred.” Contractors may grant extensions for good cause for COVID-19-related deferrals of the employer’s share of Social Security taxes that were permitted under section 2302 of the CARES Act. Section 2302 of the CARES Act requires employers to deposit 50 percent of the deferred taxes on or before December 31, 2021, and the remaining 50 percent by December 31, 2022. However, if employers received loans under the Small Business Act and such loans were forgiven under section 1106 of the CARES Act, then such employers are not eligible for this deferral relief.
