Healthcare entities’ reporting impacts of COVID-19 aid

Healthcare entities are receiving COVID-19 government assistance from a number of different sources. KPMG addresses the accounting for this aid. 

Applicability

• All non-governmental healthcare entities 

Relevant dates

• CARES Act was signed into law on March 27, 2020
• $30 billion of provider relief funding was disbursed in two installments on April 10 and April 17, 2020
• HHS announced plans to disburse additional provider relief funding on April 22, 2020
• Effective immediately

Key impacts

• Payments made to a healthcare entity for services provided to its Medicare patients represent transaction price for the services provided and are accounted for under ASC 606.
• For payments made from the $50 billion of general allocations of provider relief funding:
  • Not-for-profit healthcare entities will account for funds received as a conditional contribution under ASC 958-605.
  • For-profit healthcare entities will consider their previous accounting policies and analogous accounting guidance to account for funds received. 
  • The funds received from the CARES Act provider relief funding is considered a Type II nonrecognized subsequent event for reporting periods before its disbursement; this is because the Act required subsequent action by the HHS Secretary. 

Report contents

• Medicare payments
• Government assistance for COVID-19 response
• Subsequent events