COVID-19 relief funds need not be recorded as offsets to expenses on health care providers’ Medicare cost reports, the Centers for Medicare & Medicaid Services (CMS) announced.

The new guidance on reporting funds received through the CARES Act Provider Relief Fund (PRF) and the Paycheck Protection Program (PPP) of the Small Business Administration (SBA) is explained in a set of FAQs, updated Aug. 26. 

The CMS FAQ document states that “providers should not adjust the expenses on the Medicare cost report based on PRF payments received. Providers must continue to adhere to the Health Resources and Services Administration’s (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.”

The FAQs also say that providers should “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.”

Providers should report PRF payments and SBA loan forgiveness on their cost reports’ statement of revenues for informational purposes, the document says. 

For more detailed information, read the full FAQ document from CMS, FAQs on Medicare Fee-for-Service Billing.