As the federal government continues to claw back misappropriated and unused COVID-19 relief funds, senior living industry advocates remain frustrated that assisted living providers “lost out” on this aid.
A Government Accountability Office report about the Provider Relief Fund, released Thursday, found that the US Department of Health and Human Services’ Health Resources & Services Administration reviewed provider eligibility and appropriate use of funds and found that $2.6 billion should be recovered — twice the amount that assisted living providers received in total PRF dollars, according to Argentum. As of May, according to the GAO, the agency had recovered approximately half of that amount, making plans in August to send final repayment notices by April.
Although assisted living providers do not appear to be among the providers being asked to return PRF payments due to ineligibility or error, the report reopens old wounds among industry advocates who say that such providers lost out on funding due to PRF mismanagement.
American Seniors Housing Associate Vice President of Government Affairs Jeanne McGlynn Delgado told McKnight’s Senior Living that although the association was “grateful” that senior living providers received even “limited” PRF payments, “we were deeply frustrated when HRSA pulled the remaining PRF dollars (directed by Congress) before fully distributing funds to providers — including some who lost out on legitimate payments that were under consideration by the agency.”
Argentum said the GAO report is a stark reminder of the lack of federal support for senior living providers, particularly the 31,400 assisted living communities across the country.
“For more than three years, these communities and caregivers have been on the front lines of the pandemic, providing essential care to our most vulnerable populations,” Argentum Senior Vice President of Public Affairs Maggie Elehwany told McKnight’s Senior Living. “They have faced unprecedented challenges, including staffing shortages, increased costs, decreased revenue and more.”
LeadingAge pointed out that provider recipients of funds were in “crisis mode” trying to keep residents and staff safe when the PRF dollars started arriving.
“No roadmap or instruction on required documentation for use of the funds, or even specific instruction on approved use of funds, was provided until much later,” LeadingAge Vice President of Integrated Services and Managed Care Nicole Fallon told McKnight’s Senior Living. “Now, during the report and audit process, the bulk of providers — including our nonprofit, mission-driven members — are doing their best to interpret the guidance of reporting accurately and then fully account for how they used PRF money.”
LeadingAge has shared guidance and resources with its members, encouraging providers to carefully review expenses they plan to report and ensure those are related to preparing for, responding to or preventing COVID-19.
“When issues or inaccuracies arise, our members appreciate having an opportunity to appeal,” Fallon said. “When and if cases of deliberate fraud or misuse of funds occur, LeadingAge supports bad actors being held accountable.”
Last fall, senior living industry proponents called for hundreds of millions in mismanaged PRF dollars to be distributed to assisted living providers. An audit of the PRF by HHS Office of the Inspector General, reported in September 2022, had found that the agency did not establish procedures to verify reported losses, potentially leading to fraudulent payments to other providers.
The federal government created the PRF in March 2020 through the Coronavirus Aid, Relief and Economic Security (CARES) Act to provide $135 billion in funding to healthcare providers to cover COVID-related expenses and lost revenue during the pandemic. Eligible providers were enrolled in Medicare, Medicaid and the Children’s Health Insurance Program.
Although most relief payments — $85 billion — went to hospital-based health systems and hospital-affiliated providers, assisted living communities and nursing homes received $11.4 billion, or 9.4% of the PRF payments, according to the GAO report. Most of the funding to long-term care providers went to skilled nursing facilities.
Assisted living providers first were eligible for funding during application for Phase 2 distributions, and they also were eligible for Phase 3 distributions that covered pandemic expenses from the first half of 2020. Phase 4 distributions were not released until September 2021, when $17 billion was allocated for assisted living operators and others serving Medicaid beneficiaries after congressional and healthcare industry pressure following COVID-19 case surges. Congress’ passage of the Fiscal Responsibility Act of 2023 stopped PRF and American Rescue Plan Rural Distribution payments in June included the clawback of $28 billion in unspent and uncommitted COVID-related funding.
Despite caring for the same number of older adults as skilled nursing facilities, assisted living providers received approximately one-twelfth of the financial relief from the PRF compared with skilled nursing providers. Argentum previously estimated that assisted living providers incurred more than $30 billion in pandemic losses and expenses.
“Assisted living facilities received roughly $1 billion nationwide compared to $12.5 billion for skilled nursing facilities, which also serve the same number of seniors — 2 million — as senior living communities,” Elehwany said. “The losses they sustained, coupled with increasing strain on the workforce, have left many senior living providers operating at a financial loss, reducing new admissions and relying on overtime shifts and pricey agency hires to maintain operations.”
Altogether, the GAO report said, assisted living providers kept $400 million in general distributions and skilled nursing facilities kept $4.7 billion in targeted distributions. An additional $4.5 billion went to fund nursing home infection control, quality and performance efforts and was kept by providers, according to the report.
More information on the Provider Relief Fund is available on the HRSA PRF website.