As this year comes to an end, and skilled nursing facilities (SNFs) are getting ready to close their books, it's important to remember when filing the 2020 Medicare cost report that facilities are now required to report any COVID-19 Public Health Emergency (PHE) funding that they received during the cost report period on the cost report. This information should be reported on Worksheet G-3 line 24.50.
After working with clients with a June 2020 year end Medicare cost report, we came across several facilities that reported the PHE funding on their balance sheets instead of reporting the funding as a revenue. Facilities should report the aggregate revenue they received for COVID-19 PHE funding which includes both Provider Relief Funds (PRF) and Small Business Administration (SBA) loan forgiveness amounts. Providers should not be adjusting expenses based on PRF payment, including funds towards lost revenue.
As a reminder, facilities must remember to ensure they are adhering to the federal guidelines in regard to the appropriate use of these funds, which have been outlined on the Department of Health & Human Services website. Providers are also encouraged to review the COVID-19 Frequently Asked Questions (FAQ) from the Centers for Medicare & Medicaid Services (CMS).
So, what happens if the facility did not receive forgiveness for a portion of the Paycheck Protection Program (PPP) loan? If the provider doesn’t receive forgiveness for a portion of the PPP loan, the portion of the loan that is not forgiven is not reported. The facility would follow the sample interest expense reporting procedures as previously.; however, most facilities will not know if the loan is truly forgiven until at least 2021.
Still confused about how to report the expenses and revenues correctly? LW Consulting, Inc. can help explain and discuss more about the cost reporting requirements, and how to properly report the information above.
For more information, contact Jennifer Matoushek, Senior Consultant, at 717-213-3130 or email JMatoushek@LW-Consult.com.