Grassi Healthcare | Cash Flow in a Crisis: Managing HHS Relief Funds and Revenue Shortages
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Cash Flow in a Crisis: Managing HHS Relief Funds and Revenue Shortages

August 10, 2020
During the COVID-19 crisis, cash flow has been anything but typical for medical providers. CARES Act relief payments brought in large unexpected amounts of cash, while significant lost revenues from the early impact of the pandemic are just hitting revenue cycles now.
 
As a medical provider, it is highly likely that you experienced both extremes. If so, it is more important than ever to plan carefully how you are using and managing your organization’s dollars.
 
Managing Your HHS Relief Funds
 

Whether you received funds from the general HHS distributions to Medicare providers or Medicaid, dental and CHIP providers and/or were a recipient of the targeted distributions to high-impact, rural, skilled nursing, Indian Health Service or safety net hospital sectors, there are several areas that require your attention when spending CARES Act relief funds:
 
  • Ensure that the dollars are used for the purpose(s) they are intended. In general terms, these funds need to address revenue shortfalls and direct expenses related to COVID-19.
     
  • Do not duplicate the uses of these dollars with any other relief fund.
     
  • Make sure you keep every dollar by complying with all reporting requirements for HHS relief funds. HHS recently clarified its reporting guidelines to include the following conditions: 
     
    • All recipients must report within 45 days of the end of the calendar year 2020 on their expenditures through the period ending December 31, 2020. (Initially, HHS had indicated that quarterly reports would be required beginning with the quarter ending June 2020.)
    • Recipients who have expended funds in full prior to December 31, 2020 may submit a single final report at any time during the window that begins October 1, 2020, but no later than February 15, 2021.
    • Recipients with funds unexpended after December 31, 2020 must submit a second and final report no later than July 31, 2021.
    • Detailed PRF reporting instructions and a data collection template with the necessary data elements will be available through the HRSA website by August 17, 2020. 

Other Cash Planning Strategies

Even with HHS funds factored in, the lower-than-normal billable activity for this extended period of time is going to have a profound impact on your cash flow for quite some time. Be careful that the infusion of HHS relief funds does not distract you from the important work of cash flow planning.
 
Aggressively projecting revenue and expenses for the next 6-12 months will help you understand and prepare for the continued impact of this economic crisis and uncover opportunities for greater organizational sustainability. 
 
How We Can Help

Grassi Healthcare Advisors is helping our clients develop individual plans for each distribution of HHS funds and documenting how these dollars are being spent within each project. This internal process will not only ensure the accurate use of these funds but also help facilitate the completion of required HHS reports. 
 
Our advisors also specialize in cash flow planning strategies to help you project your revenues and expenses, plan cost containment, negotiate with vendors and mitigate financial risk.

For a complimentary consultation on managing your cash flow and HHS reporting requirements, please contact Joseph Tomaino, CEO of Grassi Healthcare Advisors, at jtomaino@grassihealthcareadvisors.com or 212.223.5020.