CARES Act Provides Relief for Small Businesses and Healthcare Providers

Mimi Mixon, Manager of Quality Programs Services
Mimi
Quality Programs Services Manager

Jaye Stevens, Quality Programs Services Team Lead
Jaye
Quality Programs Services Team Lead

 

 

The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on Friday, March 27, 2020. The focus of this Act is to provide relief for individuals and businesses that have been negatively impacted by the COVID-19 pandemic. TSI Healthcare’s Quality Programs team has read and analyzed the CARES Act, and in this document, we will summarize key provisions impacting small businesses and healthcare providers to assist your practice.

 Small Business Loan Programs

What are the two main small business loan programs to assist during the COVID-19 pandemic?

  • Economic Injury Disaster Loans (EIDL)
  • Paycheck Protection Program (PPP)

Who is eligible for these programs?

  • Small businesses (under 500 paid employees), other eligible organizations, Tribal businesses, self-employed individuals, and independent contractors may be eligible

What can the loans be used for?

  • Payroll support (includes paid sick, medical, or family leave)
  • Costs related to the continuation of group healthcare benefits during leave
  • Employee salaries
  • Mortgage/rent payments and utilities
  • Other debt obligations
  • Note: Small businesses may apply for both EIDL and PPP. The loans cannot be used for the same purposes. For example, if the PPP is used to cover payroll, you are not able to use the EIDL to also cover payroll

Economic Injury Disaster Loans (EIDLs)

What are EIDLs?

  • $10 billion set aside to cover immediate operating costs for small businesses
    • Update: The SBA has added $50 billion to the loan portion of the EIDL, and an additional $10 billion will be added to the Emergency Cash Advance as part of the Paycheck Protection Program and Health Care Enhancement Act, passed on April 24th
    • As of April 30th, the SBA is not accepting new applications and is still processing EIDL Loan and Advance applications that were already in the queue in the order they were received
  • Capital loans of up to $2 million per small business experiencing temporary loss of revenue to provide economic relief
  • To be eligible to receive an EIDL, the business must have been in operation by January 31, 2020

 What is the process to receive relief?

  • Small businesses must complete the EIDL application and request the EIDL advance
    • As of April 30th, the SBA is not accepting new applications and is still processing EIDL Loan and Advance applications that were already in the queue in the order they were received
      • Additional information on the availability of the EIDL portal to receive new applications has not been released
    • EIDL cash advance of up to $10,000 will be made after a successful application has been submitted
    • The EIDL cash advance will be forgiven if the money is spent on paid leave, maintaining payroll, increased costs due to supply chain disruption, mortgage or lease payments, or repaying obligations that cannot be met due to revenue loss
      • No additional application for the EIDL advance forgiveness is required

Are there any loan forgiveness provisions or loan payment deferments for EIDLs?

  • Beyond forgiveness for the EIDL cash advance, there are no loan forgiveness provisions for EIDLs
  • Businesses that have already applied for EIDLs because of COVID-19 can refinance the EIDLs under the PPP to take advantage of loan forgiveness offered through the Payroll Protection Program (discussed below)
  • The first month’s payments are deferred one year from the date of the promissory note

Can I apply to receive an EIDL if I am receiving other relief?

  • New legislation allows small businesses to receive EIDLs even if they are receiving other loans

How do I apply for an EIDL loan?

  • As of April 30th, additional information on the availability of the EIDL portal to receive new applications for the loan and/or advance has not been released
    • TSI Healthcare will continue to provide updates to our family of clients as new information is released

Paycheck Protection Program (PPP)

What are PPP Loans?

  • $350 billion set aside for job retention and certain other expenses
    • Update: The SBA has added $310 billion to the PPP as part of the Paycheck Protection Program and Health Care Enhancement Act, signed on April 24th
  • Loan up to $10 million per small business to cover payroll and other business expenses that are incurred between February 15, 2020 and June 30, 2020
  • Businesses must have been in operation on February 15, 2020 to be eligible for the loan
  • PPP Loans are available through June 30, 2020

When do I receive relief?

  • Since the PPP loans are administered by existing banks and lenders enrolled with the Small Business Administration (SBA) program as well as other lenders who meet the SBA qualifications, the distribution timeline of the loan will be determined by the lender

Are there any loan forgiveness provisions or loan payment deferments for PPP loans?

  • The first month’s payments are deferred for 6 months
  • The SBA may forgive a portion of the loan that covers the first eight weeks of payroll, mortgage interest, rent, and utility payments
    • The 8 week period begins on the date of the first PPP disbursement
    • Borrowers must use 75% of the loan amount for payroll costs in order to be eligible for loan forgiveness
    • Please note the loan forgiveness amount may be decreased if certain conditions related to number of employees and salaries are not met
  • Eligible loan recipients seeking loan forgiveness must apply with the lender after the 8 week period and include the number of employees and their pay rates

How do I apply for a PPP loan?

  • Update: The SBA began accepting new Paycheck Protection Program applications from participating lenders on Monday, April 27, 2020 at 10:30am EDT
  • Fill out the PPP application and work with your lender to ensure that the application is submitted to the SBA and continue to check in with your lender during the entirety of the process
  • To find a local lender that is accepting PPP applications, click here

Additional Loan Resources

CMS Expansion of Accelerated and Advance Payment Program

What are Accelerated/Advance payments?

  • CMS previously provided accelerated or advance payments during the COVID-19 public health emergency to any Medicare provider who submitted a request to their Medicare Administrative Contractor (MAC) prior to April 26th and met eligibility requirements

How do I apply for Accelerated/Advanced Payments?

  • On April 26, 2020 CMS announced a suspension to the Medicare Advance Payment Program to Part B suppliers effective immediately

 What is the process for receiving and repaying the Accelerated/Advanced Payments?

  • Eligible Medicare providers who received advance payments have 210 days from the date the payment was received to repay the balance of the advance
    • After 120 business days, Medicare will automatically begin to recoup the balance of the advance through newly submitted claims

Additional resources for the Accelerated/Advanced Payments

Business Taxes

When will required installments of business income tax be due?

  • Business income tax installment due dates are delayed and will not be due until October 15, 2020

When will employer payroll taxes be due?

  • Employers are able to defer 2020 payroll tax payments until 2021 and 2022
    • Payments for 50% of the taxes for the payroll tax deferral period will be December 31, 2021
      • The remaining payroll tax amount will be due December 31, 2022
    • Certain employers who retain employees may be eligible to receive a credit against payroll taxes for 50% of eligible employee wages paid or incurred from March 13, 2020 to December 31, 2020
    • Penalties for failure to make deposit of employment tax (Social Security tax) during this emergency is waived
      • Note: employers must continue to pay the employer portion of Medicare taxes

Medicare and Telehealth Expansion and the Impact on Providers and Practices

  • All Medicare sequestration payment reductions are temporarily suspended from May 1, 2020 through December 31, 2020
  • $29 million in grants available per year for the next 5 years for telehealth resource centers
    • Practices seeking guidance or assistance regarding telehealth should contact their regional telehealth resource center
    • Federally Qualified Health Centers (FQHCs) and Rural Health Centers (RHCs) are now able to provide telehealth services
    • Providers no longer have to have seen the patient face to face within the last 3 years in order to provide telehealth services to the patient
    • Telehealth platforms have been expanded to include non-HIPAA compliant applications to encourage providers and patients to utilize telehealth during the pandemic

Provisions for Hospitalists

  • Discharges during the emergency period for patients with a diagnosis of COVID-19 will have an increasing weighting factor for each diagnosis-related group by 15% for the Medicare Hospital Inpatient Prospective Payment System
  • Accelerated payment policy for Medicare payments to be distributed more quickly to hospitals
    • Expansion the types of hospitals that may be eligible to apply for and receive an advance on Medicare payments
    • The prepayment amount of expected Medicare payments has been increased from 70% to 100%, and to 125% for critical access hospitals
    • Recoupment of overpayments have been delayed to 120 days
    • Due date for outstanding balances has been extended to 1 year

Impact on Medical Product Supplies

  • Adding personal protective equipment (PPE), supplies, drugs, and vaccines to the national stockpile
  • The FDA will prioritize and expedite the reviews and release of new drug applications to treat COVID-19
  • Prevent essential medical device shortages with manufacturers producing essential medical devices by requiring manufacturers to provide 6-month notice if they discontinue production on these devices
  • Tests intended to diagnose COVID-19 may be marketed if they meet development standards, and the developers are pursuing an emergency use authorization

 Access to Healthcare for COVID-19 Patients

  • Coronavirus preventive service, item, or immunization intended to prevent or mitigate COVID-19 must be covered by group health plans and health insurance
  • Group health plans as well as group or individual health insurance coverage will provide coverage with no cost sharing requirements, prior authorization, or other medical management requirements for items and services furnished during the public health emergency declaration
  • Group health plan and health insurers will reimburse the provider of COVID-19 diagnostic testing in the amount that equals the cash price for the service as listed by the provider on a public website, or at a negotiated rate reached by the insurer and provider
    • Providers of a COVID-19 diagnostic test must publish the cash price for the test on their website, or be subject to a monetary penalty

Support for Healthcare Providers

  • $100 billion set aside providers and hospitals on the front lines of coronavirus
    • Update: The Department of Health and Human Services has added $75 billion as part of this Public Health and Social Services Emergency Fund, as the Paycheck Protection Program and Health Care Enhancement Act has been signed into law. Previously, $30 billion has been paid out to Medicare providers as part of this fund. The HHS announced on 4/23/2020 that $20 billion in additional funds will be distributed to healthcare providers beginning 4/24/2020, on a weekly basis. TSI Healthcare will continue to update our clients as we receive information of how this $75 billion will be distributed.
    • Please review our Provider Relief Fund FAQ document, located on TSI Healthcare’s Covid-19 Resource Page (password: tsiresource) for additional information about these funds including required next steps
  • $1.32 billion in grants for COVID-19 testing by federally funded healthcare centers
  • Reduced liability for volunteer health care professionals during the emergency response for services rendered within the volunteer’s scope of practice and job duties

DISCLAIMER: THE INFORMATION PROVIDED ON THIS PAGE IS FOR INFORMATIONAL PURPOSES ONLY, AND IS SUBJECT TO CHANGE BASED ON FUTURE GUIDANCE FROM THE DEPARTMENT OF THE TREASURY, THE WHITE HOUSE, AND OR MANAGING AGENCIES. TSI DOES NOT REPRESENT, OR INTEND TO PROVIDE, LEGAL OR FINANCIAL ADVICE ON THE SUBJECT MATTER DISCUSSED HEREIN, OR ON WHETHER THIS INFORMATION MAY OR MAY NOT BENEFIT YOUR PRACTICE.  FOR MORE INFORMATION ON THE CARES ACT, PLEASE VISIT: https://www.hhs.gov/provider-relief/index.html or https://home.treasury.gov/policy-issues/cares. Failure to meet regulatory requirements or failure to implement and utilize the necessary technology will impact eligibility, and may result in missed incentives and/or penalties. TSI Healthcare (TSI) attempts to provide basic guidance of current policy, CMS guidelines, and NextGen documentation. TSI does not present findings or guidance as expert advice regarding  federal policies, their requirements, data collection methods, or reporting guidelines. Quality Payment Program requirements and other incentives programs are defined by the various agencies and offices of the US Federal Government and are subject to change. As guidelines change, NextGen’s approach and TSI’s guidance may also be adjusted without notice. TSI does not administer incentive payments, guarantee eligibility, or guarantee the accuracy of analysis and any statements about the program. TSI Healthcare and the NextGen family of products and services can only provide the tools to achieve these requirements; however, the responsibility remains on the provider to achieve, correctly collect data, maintain documentation, and report on each measurement. Should the Client have any questions as to the interpretation of the Quality Payment Program, CARES Act, or other relevant rules, regulation or incentive programs, and/or their application to the specific practice, the Client should contact the appropriate government agency directly.

Updated: 5/1/2020