HRSA Releases Additional Phase 4 and Rural Distribution Details

COVID-19; Provider Relief Fund

Portal Opens on September 29​

Yesterday, September 15 the Health Resources and Services Administration (HRSA) released additional details on the $25 billion September 10th announcement composed of the $17 billion Phase 4 distribution and the $8.5 billion rural distribution.   

HRSA Updates & ​New Details 
The Administration provided context for the size of the distribution and the parameters for award, eligibility, and use. HRSA noted the Provider Relief Fund (PRF) has approximately $39 billion. HRSA indicated the $39 billion will be reduced by the Phase 4 $17 billion to $22 billion. However, it is likely the $8.5 billion will also reduce the unobligated to $14 billion. The unobligated remaining amount of $22 or $14 billion is impacted by the ongoing availability of payments to providers who deliver care to the uninsured. Of note, HRSA also confirmed that virtually all skilled nursing facilities (SNFs) and assisted living communities (ALCs) (including private pay) are eligible for Phase 4.  ​

Phase 4 Distribution
Based upon parameters in the Consolidated Appropriations Act, Phase 4 is modeled on Phase 3 and aimed at reimbursing providers for lost revenues and expenses related to COVID-19 based on Q3-4 of 2020 and Q1 of 2021.  Phase 4 is open to all providers, including new providers – “any provider or supplier of health care, services, and support in a medical setting, at home, or in the community” is eligible to apply.  Unlike the rural portion of funds, providers will not be excluded based on geography. To view a list of eligible providers, click here.  

HRSA made clear that the new methodology implemented in this distribution is intended to support the Administration’s broader goals around health equity:
  • More generous for smaller providers – the new methodology is intended to better support smaller providers. Specifically, HHS indicates its goals for the distribution is “reimbursing smaller providers….at a higher rate compared to larger providers.” HRSA is defining “small, medium and large” providers by the volume of Medicaid and Medicare patients served during the performance period.  Additional details on these delineations will be provided by HRSA next week.  
  • Bonus payments based on services to Medicaid/Medicare payments – the methodology is also intended to reward those providers serving Medicare and Medicaid patients at a higher rate (vs. commercially insured). 

HRSA also views Phase 4 as two allocations and Phase 4 awards will be calculated based on two different methodologies:

  • 75% calculated based on revenue losses and COVID-related expenses ($12.75 billion).
  • 25% put towards bonus payments that are based on the amount and type of service provided to Medicaid, CHIP, and Medicare patients ($4.25 billion).
For more details on the sub-allocations, click here.  

Rural Distribution 
Of the $25 billion, $8.5 billion is specified by the American Rescue Plan Act – the large, COVID-19 relief package Congress passed in March – for “rural providers.”  HRSA noted that “rural provider” means providers who meet their definition of rural as well as providers who deliver care to rural patients as well as an additional bonus payment based upon the number of Medicaid and Medicare patients.  Providers may determine whether their locations are considered rural by inputting their address into HRSA’ Rural Provider Validator. Payments to providers who serve rural patients will be based upon the number of rural patients served during the performance period.  SNFs that provide Medicaid or Medicare financed care and ALCs who provide Medicaid financed care are eligible.  HRSA indicated that due to the heavy emphasis on the number of Medicaid and Medicare beneficiaries served during the performance period, it is unlikely private ALC will be eligible.  

Applying for Funding & Award Timing 
Though the funding opportunities are separate and distinct, HHS will use a single application portal for providers to apply for funding.  HRSA plans to release application guidance (including more detail on the award methodology) the week of September 20 with the application portal opening on September 29.  The portal will remain open for four weeks, or until November 20.  HRSA anticipates releasing Rural Distribution awards by mid-November and Phase 4 distribution awards by mid-December.  
Other PRF Information
Phase 3 Reconsideration
As part of the September 10 announcement, HRSA noted it will reconsider Phase 3 awards.  While the reconsideration process and materials are not yet available, providers may email HRSA, now, at to indicate they will be requesting reconsideration and to be included in a reconsideration email distribution list.  

Grace Period for Reporting  
Provider Relief Fund awardees are required to submit reports to HHS that documents whether a provider’s lost revenue and expenses match the awards received.  Technically, reports still are due on September 30.  HRSA is providing a penalty-free grace period until November 30.  However, providers are encouraged to submit reports if they are ready to do so.