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Financial Support for Health Care Practitioners

Click here for a 1-page fact sheet on the Provider Relief Fund.

On May 4, ACEP's Regulatory Affairs Director, Jeffrey Davis, gave a presentation to a group of ED physician directors in Colorado highlighting the available financial support options for emergency physicians. Listen to Mr. Davis' presentation and download his presentation with links to helpful resources.

Grants and Direct Payments

Major Updates on the Provider Relief Fund

October 22, 2020: HHS announced expanded eligibility for the Phase 3 General Distribution of the Provider Relief Fund (PRF), along with revisions to the reporting requirements. The expanded list of eligible providers is extremely long, thereby decreasing the chance that emergency physicians will be receive additional funds beyond what they have already received from previous distributions. HHS also changed PRF reporting requirements to now allow providers to apply PRF payments against all lost revenues without limitation. HHS had received pushback for initially limiting funds to an amount that would prevent most providers from being more profitable in 2020 than in 2019. All providers receiving more than $10,000 are subject to key reporting requirements, with the first deadline for reporting February 15, 2021. In addition, all providers who expend more than $750,000 in Federal funds (including PRF and the Paycheck Protection Program funds) will be subject to additional audit requirements. For additional information, visit the Reporting Requirements and Auditing page and read the Auditing and Reporting Requirements FAQs. More information related to this program can be found on the Provider Relief Fund website.

October 5, 2020:  You can now start applying for the $20 billion “Phase 3” general distribution from the Provider Relief Fund.  Applications are due on November 6, 2020, but HHS urges you to submit an application as soon as possible. HHS provides the following clarifying information about this general distribution:

  • Payment Methodology – HHS states that the payment methodology is designed to ensure a provider has received 2% of annual revenue from patient care either as part of the previous phases of the General Distribution or under a Phase 3 payment.  In addition, Phase 3 will consider providers’ changes “in operating revenues from patient care, minus their operating expenses from patient care,” as well as funds received under prior distributions.  Once all applications have been received and reviewed, HHS will also determine final payment amounts for providers who have already received payments equaling 2% of annual patient care revenue.
  • Payment Formula – HHS indicates that providers will be paid a percentage of their change in operating revenues minus their operating expenses from patient care.  The Department clarifies that the actual percentage paid to providers will depend in part on how many providers apply.   
  • Operating Revenues from Patient Care – HHS defines “operating revenues from patient care” as net patient service revenue from the delivery of health care services directly to patients, and defines “net patient service revenue” as gross charges for patient services delivered, minus contractual adjustments from all third party payors, charity care adjustments, bad debt, and any other discounts or adjustments necessary. 
  • Operating Expenses from Patient Care – HHS defines “operating expenses from patient care” as operating expenses incurred as part of the delivery of care, including salaries, benefits, medical supplies, contracted and/or employed physicians, interest, and depreciations, but not including “any non-operating expenses, such as costs incurred on any rental property as well as contributions made, gains, and/or losses on investments.” 
  • Expected Payment Amounts HHS will determine final payment amounts above 2% of annual patient care revenue for applicants after the deadline once all applications have been received and reviewed.
  • Payment Process – HHS will issue payments once all applications have been received and reviewed, and not on a rolling basis, as it has done with previous distributions.   
  • Use of Funds – HHS informs providers that the terms and conditions do not require providers to use funds to cover COVID-19 related losses or increased expenses during the first two quarters of calendar year 2020 but can be used anytime up until July 31, 2021. 

Eligibility – HHS states that providers that did not deposit a check from the Phase 1 General Distribution are eligible to apply for the Phase 3 General Distribution.  In addition, HHS clarifies that receiving funds from the Payroll Protection Program or certain other COVID-19 relief payments does not preclude a provider who meets the eligibility criteria from applying for the Phase 3 General Distribution.  

On October 1, 2020, HHS announced another general distribution from the Provider Relief Fund—a $175 billion fund appropriated by Congress that helps cover health care providers’ lost revenues and increased expenses due to COVID-19. The $20 billion distribution is open to health care providers and groups, including emergency physicians and emergency medicine group practices, who have already received funding from the Provider Relief Fund.

As a reminder, you or your group have thus far been eligible to receive up to 2 percent of your 2018 total revenue from the Provider Relief Fund. HHS is now allowing you or your group to potentially receive additional funding on top of that.  You or your group will be required to submit financial information in order to help HHS determine your or your group’s share of the funds.

Specifically, HHS will ask you or your group to review and confirm that you or your group have already received a Provider Relief Fund payment equal to approximately 2 percent of patient care revenue. If you or your group have not yet received Provider Relief Fund payments of 2 percent of patient revenue, you or your group will receive a payment that, when combined with prior payments (if any), equals 2 percent of patient care revenue.

HHS will determine these payments first. With the remaining balance of the $20 billion budget, HHS will then calculate an equitable add-on payment that considers:

  • The change in your or your group’s operating revenues from patient care;
  • The change in your or your group’s operating expenses from patient care, including expenses incurred related to COVID-19; and
  • Payments you or your group have already received through prior Provider Relief Fund distributions.

You or your group will have from October 5, 2020 through November 6, 2020 to apply for this funding. Since HHS is allocating this funding equitably to everyone who applies, it is urging everyone to apply early and not to wait until the last day or week of the application period. Applying early will help to expedite HHS’s review process and payment calculations, and ultimately accelerate the distribution of all payments.

All payment recipients will be required to attest to receiving this funding and will have to accept the associated Terms and Conditions. HHS will continue to host webinars to assist providers through the application process

On September 19, 2020, HHS released updated guidance on how to report lost revenues and increased expenses due to COVID-19. The guidance applies generally to PRF recipients that received one or more PRF payments exceeding $10,000 in the aggregate, but does not apply to payments received from the HRSA Uninsured Program. The guidance outlines specific data elements that must reported, and includes additional requirements for providers who received more than $500,000.  Recipients who spend all their funds prior to the end of 2020 will be required to report this information by the February 15, 2021.  Recipients with funds still unexpended after December 31, 2020, must submit a second and final report no later than July 31, 2021.  The reporting system will become available to recipients for reporting on October 1, 2020, although that could be delayed.

HHS announced an additional $1.4 billion in targeted distribution funding to almost 80 free-standing children’s hospitals nationwide. According to HHS, this distribution will help to ensure children’s hospitals receive relief proportional to other hospitals across the nation and providers caring for children are able to continue operating safely in some of our most vulnerable communities.

HHS has updated its frequently-asked questions (FAQs) document to include more information about auditing and reporting requirements. HHS clarifies that reports on the use of Provider Relief Fund money must be submitted no later than July 31, 2021, and accordingly, HHS expects that providers will fully expend their payments by that date.

HHS has extended the deadline for Medicaid and dental providers to apply for funds. HHS also plans to allow certain Medicare providers who experienced challenges in the “General Distribution” application period a second opportunity to receive funding. Both groups will have until Sunday, September 13, 2020 to apply. Most emergency medicine groups are eligible to receive funding from the Medicare General Distribution. The original deadline for this funding was June 3rd. If you missed this deadline, you may be eligible to apply now. You can apply hereNote that this does not represent an additional allocation for emergency physicians. If you already received funding from the “General Distribution,” you cannot reapply for additional funding. The cap in funding is still 2 percent of your annual patient revenues.

On July 22, HHS announced that it would allocate $5 billion of the Provider Relief Fund to Medicare-certified long term care facilities and state veterans’ homes (“nursing homes”), to build nursing home skills and enhance nursing homes’ response to COVID-19, including enhanced infection control. This new funding is in addition to the $4.9 billion previously provided to nursing homes to offset revenue losses and cover increased expenses due to COVID-19.

HHS released a notification informing Provider Relief Fund recipients who received one or more payments exceeding $10,000 in the aggregate that they will be required to report information showing how they complied with the Terms and Conditions (including how they used the funds). Additional detailed instructions regarding the reporting requirements will be released soon. HHS plans on opening up a reporting system where you are to submit the required information on October 1, 2020.

On July 22, HHS announced that it would allocate $5 billion of the Provider Relief Fund to Medicare-certified long term care facilities and state veterans’ homes (“nursing homes”), to build nursing home skills and enhance nursing homes’ response to COVID-19, including enhanced infection control. This new funding is in addition to the $4.9 billion previously provided to nursing homes to offset revenue losses and cover increased expenses due to COVID-19

On July 10, HHS announced new allocations of the Provider Relief Fund— approximately $3 billion in funding to hospitals serving a large percentage of vulnerable populations on thin margins and approximately $1 billion to specialty rural hospitals, urban hospitals with certain rural Medicare designations, and hospitals in small metropolitan areas. HHS is also opening the provider portal to allow dentists to apply for relief.  Dentists and Medicaid providers (discussed below) have until August 28, 2020 to apply for the funds. Approximately $50 billion remains unallocated of the $175 billion Provider Relief Fund.

In June, HHS had announced additional allocations of the Provider Relief Fund—none of which is going to emergency physicians

  • $15 billion for Medicaid Providers: HHS is opening up a portal on June 10 that will allow clinicians who participate in state Medicaid and CHIP programs and/or Medicaid and CHIP managed care organizations to submit their annual patient revenue information and receive a distribution equal to at least 2 percent of reported gross revenues from patient care.  To be eligible for this funding, health care providers must not have received payments from the $50 billion Provider Relief Fund General Distribution and either have directly billed their state Medicaid/CHIP programs or Medicaid managed care plans for healthcare-related services between January 1, 2018, to May 31, 2020. Examples of providers possibly eligible for this funding include pediatricians, obstetrician-gynecologists, dentists, opioid treatment and behavioral health providers, assisted living facilities and other home and community-based services providers.

Most of you or your groups have already received payments from the Provider Relief Fund.  Therefore, you will not be eligible for this funding. However, ACEP believes that the funds you have received thus far have not been sufficient and we will continue to advocate for additional support. 

  • $10 billion to Safety Net Hospitals: This payment is going to hospitals that serve a disproportionate number of Medicaid patients or provide large amounts of uncompensated care. Qualifying hospitals will have:
    • A Medicare Disproportionate Payment Percentage (DPP) of 20.2 percent or greater;
    • Average Uncompensated Care per bed of $25,000 or more. For example, a hospital with 100 beds would need to provide $2,500,000 in Uncompensated Care in a year to meet this requirement;
    • Profitability of 3 percent or less, as reported to CMS in its most recently filed Cost Report.

This payment is being sent directly to these hospitals via direct deposit. Recipients will receive a minimum distribution of $5 million and a maximum distribution of $50 million.

  • $10 billion in Additional Funding for Hospitals in Hot Spots: In May, $12 billion was distributed to 395 hospitals that had 100 or more COVID-19 admissions between January 1 and April 10.  On June 8, HHS asked hospitals to update information on their COVID-19 positive-inpatient admissions for the period January 1 through June 10. This information will be used to determine a second round of funding to hospitals in COVID-19. To determine their eligibility for funding under this $10 billion distribution, hospitals must submit their information by June 15.
  • If you received funding from the first $30 billion tranche and decide to accept the terms and conditions and keep the funding, you must log on to this portal and formally attest to the terms and conditions. HHS announced a 45-day extension to accept the terms and conditions. This means that you now have 90 days from when you received a payment to either accept the terms and conditions or return the funds.
  • HHS also provided nearly $4.9 billion in additional relief funds to skilled nursing facilities (SNFs) and $500 million in payments to the Indian Health Service (IHS) and tribal hospitals, clinics, and urban health centers.
  • Health care providers had until June 3, 2020 to accept the Terms and Conditions and submit their revenue information to support receiving an additional payment from the Provider Relief Fund $50 billion General Distribution. Providers who had cases pending before the department for adjudication with regard to eligibility for general distribution funding will not be impacted by this closure. All cases needing individual adjudication would have needed to be received by HHS no later than June 3, 2020. If on June 3rd you were still deciding whether to accept funds you had already received, but hadn’t yet submitted your tax information to the application portal, you should of (1) rejected the funds; (2) submitted info to the application portal for consideration. If you did this, you will be reallocated all General Distribution funds you are owed based on you submitted application and will then have 90 days to attest or reject the terms and conditions. HHS implemented this so that it could have all applications by June 3 and can start rolling out other distributions soon. The attestation portal (as opposed to the application portal) will remain open for 90 days. Only the application portal closed on June 3. 
  • HHS has released an extensive set of frequently asked questions(FAQs), which is continually being updated. ACEP strongly recommends that you periodically review these FAQs. On June 2, HHS added a new FAQ that lays out what expenses or lost revenues are considered eligible for reimbursement.
  • In the FAQs, HHS provides additional information on determining how much funding from the “general allocation” providers should expect to receive. The total you are expected to receive from tranche 1 and tranche 2 combined is the lesser of 2% of your 2018 (or most recent complete tax year) net patient revenue or the sum of incurred losses for March and April. If you received equal to or more than 2 percent of your total 2018 revenue in tranche 1, you will not receive additional funding in tranche 2. Those who submitted all the required information for the second tranche should be receiving tranche 2 payments.
  • HHS stated that if you believe you were overpaid or received funds in error, you should return the funds. HHS does not intend to recoup funds as long as your lost revenue and increased expenses exceed the amount of Provider Relief funding you have received. HHS reserves the right to audit Relief Fund recipients in the future to ensure that this requirement is met and collect any Relief Fund amounts that were made in error or exceed lost revenue or increased expenses due to COVID-19. Failure to comply with other Terms and Conditions may also be grounds for recoupment.
  • HHS made some clarifications to the balance billing condition:
    • The prohibition on balance billing applies to “all care for a presumptive or actual case of COVID-19.” A presumptive case of COVID-19 is a case where a patient’s medical record documentation supports a diagnosis of COVID-19, even if the patient does not have a positive in vitro diagnostic test result in his or her medical record.
    • There are no limitations on the ability of a provider to submit a claim for payment to the patient’s insurance company. However, an out-of-network provider delivering COVID-19-related care to an insured patient may not seek to collect from the patient out-of-pocket expenses, including deductibles, copayments, or balance billing, in an amount greater than what the patient would have otherwise been required to pay if the care had been provided by an in-network provider. According to HHS, “most health insurers have publicly stated their commitment to reimbursing out-of-network providers that treat health plan members for COVID-19-related care at the insurer’s prevailing in-network rate.”
  • You can now start submitting claims for the uninsured program. Please review the information in the registration portal, the program’s home page, and two sets of frequently asked questions (set oneand set two) for more details.
  • HHS has released a provider-level breakout of who has received Provider Relief Funding.

Background on the Provider Relief Fund

The major stimulus bill that was signed into law (the CARES Act) included a $100 billion fund that the U.S. Department of Health and Human services (HHS) has been distributing to health care providers, including physicians, in the form of grants and direct payments. Further, the Paycheck Protection Program and Health Care Enhancement Act (the COVID 3.5 package) added $75 billion to the fund on top of the initial $100 billion. Health care providers are not required to repay any of this funding.

On April 10, HHS distributed $30 billion of the $100 billion CARES Act funding to Medicare “providers” (physicians, hospitals, and other facilities and health professionals that bill Medicare) and on April 22, HHS announced additional, future allocations.

With respect to the $30 billion, the amount was distributed in direct proportion to providers’ total 2019 Medicare fee-for-service (FFS) reimbursement. You or your group should have received approximately 6.2 percent of their Medicare FFS payments. Some of you, depending on where you practice and your patient mix, will receive more or less than others, since again, the amount you receive is simply based on your Medicare payments from last year.

There is also a catch that goes along with the funding. Within 45 days, you must agree to certain terms and conditions. These terms and conditions include the following statement:

“The Secretary has concluded that the COVID-19 public health emergency has caused many healthcare providers to have capacity constraints. As a result, patients that would ordinarily be able to choose to receive all care from in-network healthcare providers may no longer be able to receive such care in-network. Accordingly, for all care for a presumptive or actual case of COVID-19, Recipient certifies that it will not seek to collect from the patient out-of-pocket expenses in an amount greater than what the patient would have otherwise been required to pay if the care had been provided by an in-network Recipient.”

ACEP sought clarification on exactly what this condition means and how this may impact you and your patients. HHS has provided some clarification, but more is needed. Specifically, HHS defines a “presumptive case of COVID-19” as a case where a patient’s medical record documentation supports a diagnosis of COVID-19, even if the patient does not have a positive in vitro diagnostic test result in his or her medical record. HHS also has stated that there are no limitations on the ability of a provider to submit a claim for payment to the patient’s insurance company and that “most health insurers have publicly stated their commitment to reimbursing out-of-network providers that treat health plan members for COVID-19-related care at the insurer’s prevailing in-network rate.”

On June 1, ACEP sent another letter to HHS Secretary Alex Azar about the distribution of the Provider Relief Fund, the $175 billion pot of funding appropriated by Congress to cover health care providers’ lost revenues and increased expenses due to COVID-19. This letter follows up on previous letters we sent on March 27, April 3, and April 14 to the HHS Secretary. In the most recent letter, we reiterate our previous request for $3.6 billion from the Provider Relief Fund to be specifically allocated towards emergency medicine groups and to the emergency physicians who practice within them. Thus far, we estimate that emergency physician groups have received approximately 7 to 15 percent of the initial $3.6 billion request. We ask that HHS reserve a portion of the $75 billion that Congress provided in the Paycheck Protection Program and Health Care Enhancement Act to cover the remaining balance of the $3.6 billion request.

$20 billion General Allocation: HHS is allocating another $20 billion to all health care providers (“Tranche 2”). The total you or your group receives—both from the initial $30 billion and the new $20 billion—will be based on your 2018 total net revenue.

To estimate how much a provider will receive in total from both the initial $30 billion and additional $20 billion general allocation, HHS provides this formula: (Individual Provider 2018 Revenue/$2.5 Trillion) X $50 Billion = Expected General Distribution.

Note: Total revenues of Medicare facilities and providers in 2018 is estimated to be $2.5 trillion.

This calculation comes out to be around 2 percent of your 2018 provider revenue.  HHS has stated that the total you are expected to receive from tranche 1 and tranche 2 combined is the lesser of 2% of your 2018 patient revenue or the sum of incurred losses for March and April. If you received equal to or more than 2 percent of your total 2018 revenue in tranche 1, you will not receive additional funding in tranche 2.

There are numerous steps you will need to take to receive a portion of this additional $20 billion.

If you received funding from the first $30 billion, you are required to attest to the required terms and conditions. You must attest to the terms and conditions associated with the first $30 billion in order to receive funding from this second $20 billion tranche.

You must log into the General Distribution Portal to provide revenue information. Detailed instructions on what information you need to provide are included in a frequently asked questions (FAQ) document HHS has produced, but overall include:

  • A provider’s “Gross Receipts or Sales” or “Program Service Revenue” as submitted on its federal income tax return
  • The provider’s estimated revenue losses in March 2020 and April 2020 due to COVID-19;
  • A copy of the provider’s most recently filed federal income tax return; and
  • A listing of the TINs any of the provider’s subsidiary organizations that have received relief funds but that DO NOT file separate tax returns.

HHS provides the following table highlighting exactly what revenue to report from your tax returns based on what type of group/organization you are:

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You will also need your W-9 and Medicare or Medicaid ID number.

HHS will use this information to calculate your payment, which as stated above, is based on 2018 net revenue. Like your first payment, HHS will deposit the money electronically into the account that you have on file with Medicare. The goal is to deposit the funds within 10 days of submitting the required information. Although the fund is limited to $20 billion (and, as of April 24, HHS has stated that $10 billion has already been distributed), HHS claims that the remainder will not be distributed on a first come first serve basis. HHS will be processing applications in batches every Wednesday at 12:00 noon EST. HHS has stated that you must submit information at attest to the Terms and Conditions by June 3rd. 

After you receive the funds, you must log back into the CARES Act Provider Relief Fund attestation portal to confirm receipt and agree to ANOTHER set of terms and conditions. This second set of terms and conditions is similar to the first, but not identical. Both sets of terms and conditions (both for the initial $30 billion and the subsequent $20 billion) can be found here.

IMPORTANT NOTE: ACEP strongly recommends that a financial expert in your group and/or your accountant review all the instructions extremely carefully, enter the information into the portal, and review and attest to both sets of terms and conditions.

Here are some useful sources of information to review:

If you have questions, please reach out to Jeffrey Davis, ACEP’s Director of Regulatory Affairs. You may also call the provider relief hotline at (866) 569-3522.

$32 billion for Providers in Hot Spots and Rural Health Providers: On May 1, HHS announced that it had started the process of distributing $12 billion of the funding to hospitals in areas that have been particularly impacted by the COVID-19 and $10 billion to rural health clinics and hospitals. None of this funding was distributed directly to physician groups. For more information about this announcement, please go here.

On June 8, HHS announced that $10 billion in additional funds will be distributed to hospitals in COVID-19 hotspots.  To receive this second round of funding, hospitals must provide updated information to HHS by June 15 on their COVID-19 positive-inpatient admissions for the period January 1 through June 10.

$500 million for Indian Health Service (IHS) Facilities: $500 million has been distributed to the IHS and tribal hospitals, clinics, and urban health centers to support the tribal response to COVID-19.

$4.9 billion for Skilled Nursing Facilities: HHS provided nearly $4.9 billion in additional relief funds to skilled nursing facilities (SNFs).

$4.9 billion for Skilled Nursing Facilities: HHS provided nearly $4.9 billion in additional relief funds to skilled nursing facilities (SNFs).

$15 billion for Medicaid Providers:  HHS is opening up a portal on June 10 that will allow clinicians who participate in state Medicaid and CHIP programs and/or Medicaid and CHIP managed care organizations to submit their annual patient revenue information and receive a distribution equal to at least 2 percent of reported gross revenues from patient care.  To be eligible for this funding, health care providers must not have received payments from the $50 billion Provider Relief Fund General Distribution and either have directly billed their state Medicaid/CHIP programs or Medicaid managed care plans for healthcare-related services between January 1, 2018, to May 31, 2020. Examples of providers possibly eligible for this funding include pediatricians, obstetrician-gynecologists, dentists, opioid treatment and behavioral health providers, assisted living facilities and other home and community-based services providers.

$10 billion for Safety Net Hospitals: This payment is going to hospitals that serve a disproportionate number of Medicaid patients or provide large amounts of uncompensated care. Qualifying hospitals will have:

  • A Medicare Disproportionate Payment Percentage (DPP) of 20.2 percent or greater;
  • Average Uncompensated Care per bed of $25,000 or more. For example, a hospital with 100 beds would need to provide $2,500,000 in Uncompensated Care in a year to meet this requirement;
  • Profitability of 3 percent or less, as reported to CMS in its most recently filed Cost Report.

This payment is being sent directly to these hospitals via direct deposit. Recipients will receive a minimum distribution of $5 million and a maximum distribution of $50 million.

Reimbursement for Providers Treating Uninsured COVID-19 Patients:
Every health care provider who has provided treatment for uninsured suspected or confirmed COVID-19 patients on or after February 4, 2020 can request claims reimbursement at Medicare rates, subject to available funding. Approximately $12 billion has been allocated to this program, although more could be added in the future. 

Providers can register NOW for the program here and begin submitting claims. ACEP encourages you to review the information in this registration portal. Emergency department visits that lead to an order of or administration of a test (i.e. testing related services) are covered under this program, as long as the claim includes one of three diagnosis codes: Z03.818, Z11.59, or Z20.828. These codes can appear in any position on the claim. In other words, you have the flexibility to submit a testing-related visit claim for reimbursement that includes another diagnosis code as the primary diagnosis instead of one of the three required codes.

However, for any treatment of COVID-19 positive patients, you will only receive reimbursement if the primary diagnosis on the claim is COVID-19 (diagnosis codes B97.29 and U07.1). The billing codes are found here.

The program’s website can be found here and there are two sets of frequently asked questions (set one and set two).

Finally, it is important to note that there are two sets of terms and conditions associated with this program:

On April 30, the Health Resources & Services Administration (HRSA) held a webinar to discuss the program. A summary of the webinar can be found here.

HHS also announced that some providers will receive further, separate funding, including skilled nursing facilities, dentists, and providers that solely take Medicaid. Finally, HHS has not made any decisions about how the additional $75 billion included in the Paycheck Protection Program and Health Care Enhancement Act will be allocated.

Medicare Advanced Payments

In March 2020, the Centers for Medicare & Medicaid Services (CMS) expanded a Medicare advanced payment program that was meant to help health care practitioners with their cash flow during the COVID-19 public health emergency. CMS paid out $106 billion before suspending the program in April, in part because of the unfavorable terms associated with these payments.  Under the original terms, the payments had to be paid back to CMS starting in August. Unpaid loans were eventually subject to an extremely high interest rate of 10.25 percent.

The Continuing Appropriations Act, 2021 and Other Extensions Act, which was enacted on October 1, 2020, included some favorable changes to the program. On October 8, 2020, CMS announced that it was implementing the changes included in the Act. Under the new law, repayment of the advance payments will now begin one year from when hospitals or health care practitioners received them (instead of in August). After that first year, Medicare will automatically recoup 25 percent of Medicare payments otherwise owed to the health care practitioner for eleven months. At the end of the eleven-month period, recoupment will increase to 50 percent for another six months. If the health care practitioners is unable to repay the total amount of the advance payment during this time-period (a total of 29 months), CMS will issue letters requiring repayment of any outstanding balance, subject to an interest rate of four percent (instead of 10.25 percent).

Health care practitioners can also request an Extended Repayment Schedule (ERS) if they are experiencing financial hardships. An ERS is a debt installment payment plan that allows a health care practitioner to pay debts over the course of three years, or up to five years in the case of extreme hardship. 

Small Business Loan Forgiveness

The CARES Act provides loan forgiveness for certain qualifying Small Business Administration (SBA) loans. The details of one such program, the Payroll Protection Program (PPP) are found below:

  • Medical and outpatient clinics are eligible for the SBA program, provided they employ less than 500 employees.
  • The maximum available loan is $10 million.
  • The loan may be used for payroll support, paid sick or medical leave, employee salaries, mortgage, and other debt obligations.
  • There are loan forgiveness programs for certain payroll costs, mortgages, rent, and utilities.
  • On June 5, 2020, President Trump signed into law the Paycheck Protection Program Flexibility Act (PPPFA) that made important changes to the PPP:
    • Reduced the amount of the PPP loan needed to be spent on payroll from 75% to 60%, thus increasing the amount of funds available for other expenses from 25% to 40%;
    • Extending the time period to spend the loans from 8 to 24 weeks;
    • Postponing the date by which workers have to be rehired in order for their salaries to count towards forgiveness from June 30, 2020 until December 31, 2020;
    • adding more exceptions to the requirement that businesses maintain the same level of full-time employees; and
    • Extending the length of the loan from one year to five years.  Now businesses who received loans have five years to pay back any unforgiven loan amounts with a 1% interest rate. 

To find out more information about the SBA’s loan forgiveness programs, please click here.

On May 22, the SBA, in conjunction with the Department of Treasury, issued an interim final reg that includes some important clarifications on how to calculate certain costs for the purposes of figuring out your loan forgiveness amount.

Here are some other useful links:

The original $349 billion allocated to the Payroll Protection Program ran out, and Congress approved an additional $321 billion in the Paycheck Protection Program and Health Care Enhancement Act.

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