Smaller healthcare providers will be prioritized in the latest round of COVID-19 relief funding announced by federal health officials last week, according to a new analysis published Friday by LeadingAge.

The Department of Health and Human Services earlier this month announced that, starting Sept. 29, it’s making $25.5 billion in new money in relief funding available to healthcare providers affected by the pandemic.

The funding includes $8.5 billion in American Rescue Plan resources for providers who serve rural Medicaid, Medicare or Children’s Health Insurance Program patients, and an additional $17 billion in Phase 4 Provider Relief Fund for providers who can document revenue loss and expenses associated with the pandemic.

Providers will have about four weeks to apply, through roughly Oct. 26. That’s a shorter period than some previous PRF application windows.

Of the $17 billion in PRF, $12.75 billion will be distributed to any approved provider based upon their lost revenues and COVID-19 expenses for July 1, 2020 through March 31, 2021, according to LeadingAge. 

The Health Resources and Services Administration will reimburse COVID-19-related expenses and losses in a graduated fashion, with smaller providers receiving the highest percentage of the Provider Relief Fund payments during the Phase 4 distribution. Medium providers will receive a smaller percentage, while larger providers will receive the lowest percentage of the payments.

“HRSA will wait until it has all applications to determine the specific percentage of those losses and expenses it can reimburse based upon the available funds,” the organization wrote.

It added that the “supplemental payments (or higher percentages) will be determined based upon a provider’s patient service revenue as reported at the (tax-payer identification) level.” 

“HRSA has yet to release what the breakpoints will be for small, medium and large providers but the delineations will be based upon TIN patient revenue not number of people served,” according to LeadingAge. 

The remaining $4.25 billion will be available for bonus payments. Medicaid, Medicare and CHIP beneficiaries will receive a bonus payment “based upon the ‘amount and type of services provided’ to those beneficiaries.

“To eliminate disparities among state Medicaid and CHIP reimbursement levels, HRSA will price these services at the Medicare rates. Essentially, HRSA will apply a certain dollar amount times the volume of patients served in these categories,” the organization explained. 

LeadingAge added that those who receive Phase 4 funds will have until December 31, 2022, to spend it, and will have to report their use of the money in the fourth reporting period, which is January 1, 2023, to March 31, 2023.