As many of you know, the recently-passed federal COVID-19 stimulus bill (CARES Act) included a number of financial support options that could help you during this extremely difficult time. I would like to lay out these options and let you know how ACEP is advocating on your behalf to ensure that you’re getting the support and protection you need.
Medicare Advanced Payments
On March 28, 2020 the Centers for Medicare & Medicaid Services (CMS) announced the expansion of an advanced payment program for the duration of the COVID-19 national emergency. This payment program is meant to help health care practitioners with their cash flow during this emergency. Within a week after making the announcement, CMS had already issued $34 billion in advanced payments.
Under this program, Medicare-enrolled providers can request a specific amount up to three months-worth of their historical Medicare payments. This is NOT a grant, as health care practitioners will be required to pay back the payment over time, starting 120 days after the receipt of the payment. Beginning on day 121, CMS will start to recoup the funding by reducing each Medicare claim billed until the full amount is repaid. Health care practitioners must pay back the entire amount by 210-day period (seven months) or face a 10.25 percent interest rate on any unpaid balance.
More details about the program, including eligibility criteria, the application process, and the recoupment/repayment process can be found here. The American Medical Association also put together a frequently asked questions document on this program.
While ACEP appreciates the expansion of this program and believes that it can provide a significant boost to emergency physician practices that are struggling due to decreased emergency department (ED) volumes (which we hear are as high as 50 percent in some cases), we do not support the requirement to pay back the loan in full by 210 days after receipt. It is unclear whether ED volumes will pick up by then and whether emergency physician practices can fully repay the loan. Further, it is not fair that health care practitioners who aren’t able to pay back the full amount in time will be faced with an exorbitant 10.25 percent interest rate! ACEP is currently exploring potential regulatory and legislative fixes to address these issues.
Small Business Loan Forgiveness
The CARES Act provides loan forgiveness for certain qualifying Small Business Administration (SBA) loans. The largest of these programs is the Payroll Protection Program (PPP), which received $349 billion in funding. Under this program, small businesses (businesses with fewer than 500 employees), those who are self-employed, and independent contractors can apply for loans up to 2.5 times their monthly payroll costs ($10 million maximum). The loans have a 1 percent interest rate and must be repaid over a two-year period. However, the loan is forgiven if 75 percent of the loan amount is used on operating expenses within eight weeks of receiving the loan. You can start applying for the loan now, so we encourage you to talk to your lender if you are interested. To find out more information about the SBA’s loan forgiveness programs, please click here.
As I’m sure you’ve heard, the $349 billion allocated to the PPP is quickly running out. ACEP is supportive of efforts in the Senate to pass a bill that would add another $250 billion to the program and is encouraging the House of Representatives to quickly pass a companion bill .
$100 Billion Fund for Health Care Providers
The CARES Act included a $100 billion fund designed to support health care providers affected by the COVID-19 pandemic. From the moment the bill passed, ACEP has pushed the Trump Administration to distribute funding immediately to frontline health care practitioners, especially emergency physicians, who are risking their lives combating the virus and have the greatest risk of missing work because of being exposed to COVID-19.
On March 27, ACEP sent a letter to the Secretary of the Department of Health and Human Services (HHS) asking that HHS prioritize funding for emergency physicians—and on April 3, we sent a follow-up letter specifically requesting that HHS distribute $3.6 billion to emergency physician practices.
Unfortunately, at this time, it seems HHS is headed in a different direction. On Tuesday, CMS Administrator Seema Verma announced that $30 billion of the $100 billion pot would go to all health care providers (including physicians, hospitals, and all other non-physician practitioners and facilities) based on historical Medicare spending.
We strongly disagree with this approach for a few reasons:
- Preferential Treatment Toward Hospitals: Since hospitals have the highest Medicare payments, they will receive the majority of the funding.
- Unfairly Penalizes EM Practices Caring for Underserved Populations: Emergency physician practices that see fewer Medicare patients and have a higher case load of Medicaid and uninsured patients are unfairly penalized under this approach.
- Does Not Prioritize Frontline Healthcare Practitioners: Plain and simple, emergency physicians deserve more support at this time than dermatologists and other non-essential specialties. All things are not equal. Emergency physicians and teams are accepting the highest risk levels for COVID-19. In turn, they should receive the highest level of support from emergency funding instead of being placed on a lengthy list behind hospital systems and non-essential specialties.
However, all is not lost, and we recognize that there will still be funding left out of the $100 billion fund once this first wave of funding is distributed. We therefore have urged HHS, when going forth with the next wave of funding, to use a portion of the remaining funds to support emergency physician practices specifically.
All in all, we know we have our work cut out for us, but please know ACEP will continue to fight for you and work as hard as we can to ensure that you have the resources you need to do your jobs.
Until next week, this is Jeffrey saying, enjoy reading regs with your eggs!