Keep Your Practice Open
Using CARES Funds
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Click to Edit Master Title Style
The Accessibility, Availability, and Impact of the
CARES Act
Coronavirus Aid, Relief & Economic
Security Act
Daphne L. Kackloudis, JD Ashley B. Watson, JD
Table of Contents
• Provider Relief Fund
• Telehealth
• Accelerated and Advanced Payment Program
• Paycheck Protection Program (PPP)
• Main Street Lending Program
• Emergency Economic Injury Disaster Loan (EIDL)
• Employee Retention Tax Credit
• Employer Payroll Tax Deferral
• What’s Next?
• Takeaways
Introduction
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• Who are we?
• What is BMD?
Background
• The Coronavirus Aid, Relief, and Economic
Security Act (CARES Act) was designed to
provide financial support and resources to
individuals and businesses affected by the
COVID-19 pandemic.
• Signed into law on March 27, 2020.
• $2 trillion stimulus bill: The largest stimulus bill
in U.S. history and Congress’ third major piece
of legislation to address the COVID-19 crisis.
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Provider Relief Fund
• $100 billion in relief funds.
• Payments NOT loans. Do not need to be repaid.
• Can be used to support healthcare-related
expenses or lost revenue attributable to
COVID-19.
• Ensures that uninsured patients can get testing
and treatment.
– NO BALANCE BILLING.
– Other payors have agreed to waive all cost-sharing
for patients who need COVID-related care.
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Provider Relief Fund Updates
• General Allocation - $50 billion
– $30 billion distributed between 4/10 and 4/17 to providers based on Medicare fee-for-service payments
– $20 billion distributed starting 4/24 based on net patient revenue in 2018
• Must submit revenue information on HHS portal
• Targeted Allocations –
– $10 billion: Hospitals in areas that have been particularly impacted by COVID-19
• Hospitals must apply by midnight TONIGHT
– $10 billion: Rural health clinics and hospitals
• Distributed as early as next week, based on operating expenses
– $400 million: Indian Health Service facilities – Treatment of the uninsured
• Every health care provider who has provided treatment for uninsured COVID-19 patients on or after February 4, 2020, can request claims reimbursement through the program and will be reimbursed at Medicare rates, subject to available funding. • Services not covered by traditional Medicare will also not be covered under this
program (no hospice, treatment without COVID-19 as primary diagnosis, etc.) • To receive payments: Enroll as a provider participant, check patient eligibility and
benefits, submit patient information, submit claims, and receive payment via direct deposit.
• Providers can register for the program on April 27, 2020, and begin submitting claims on or around May 6, 2020. Portal: coviduninsuredclaim.hrsa.gov.
Eligible Providers
• Definition of “eligible health care providers” broadly, under the
CARES Act to include:
– Providers that received Medicare fee-for-service (FFS) reimbursements in 2019;
– with a valid Tax Identification Number, and
– who provide diagnoses, testing, or care for individuals with possible or actual cases of COVID-19.
• Providers will be distributed a portion of the initial $30 billion
based on their share of total Medicare FFS reimbursements
in 2019.
– A community hospital billed Medicare FFS $121 million in 2019. To determine how much they would receive, use this equation:
• $121,000,000/$484,000,000,000 x $30,000,000,000 = $7,500,000
• Non-participating providers are NOT eligible to receive
payments unless they accepted assignment and received
Medicare FFS payments at some point in 2019.
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Allowable Expenses
• Funds must be used to reimburse the provider
only for health care-related expenses or lost
revenues that are attributable to coronavirus:
– building or construction of temporary structures,
– leasing of properties,
– medical supplies and equipment including personal
protective equipment and testing supplies,
– increased workforce and trainings,
– emergency operation centers,
– retrofitting facilities, and
– surge capacity.
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Payment
• HHS has partnered with UnitedHealth Group (UHG)
to provide rapid payment to providers eligible for the
distribution of the initial $30 billion in funds.
– Providers will be paid via Automated Clearing House
account information on file with UHG or the Centers for
Medicare & Medicaid Services (CMS). Payments are sent
to the TIN that bills Medicare (i.e. to the group practice
and not the individual physician)
– The automatic payments will come to providers via Optum
Bank with "HHSPAYMENT" as the payment description.
• Providers who normally receive a paper check for
reimbursement from CMS, will receive a paper
check in the mail for this payment as well, within the
next few weeks.
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Attestation
• Within 30 days of receiving the payment, providers must sign
an attestation confirming receipt of the funds and agreeing to
the terms and conditions of payment. The portal for signing
the attestation is open.
– Not returning the payment within 30 days of receipt will be viewed as acceptance of the Terms and Conditions.
• Terms and Conditions include:
– The Recipient certifies that it billed Medicare FFS in 2019; provides or provided diagnoses, testing, or care for individuals with possible or actual cases of COVID-19 after January 31, 2020; is not currently terminated from participation in Medicare; is not currently excluded from participation in Medicare, Medicaid, and other Federal health care programs; and does not currently have Medicare billing privileges revoked.
– The Recipient certifies that the Payment will only be used to prevent, prepare for, and respond to coronavirus, and shall reimburse the Recipient only for health care related expenses or lost revenues that are attributable to coronavirus.
– A provider may not use these funds to pay for expenses or losses that have been reimbursed from other sources.
Attestation, cont.
• Providers may not seek collection of out-of-pocket payments from a COVID-19 patient that are greater than what the patient would have otherwise been required to pay if the care had been provided by an in-network provider.
• Recipients shall maintain appropriate records and cost documentation including, as applicable, documentation required by 45 CFR § 75.302 – Financial management and 45 CFR § 75.361 through 75.365 – Record Retention and Access, and other information required by future program instructions to substantiate the reimbursement of costs.
– Providers must adopt a written policy that includes a documented process for ensuring proper allowability of costs and expenses in furtherance of the Provider Relief Fund Terms and Conditions.
– 3 year audit lookback period.
• Funds may not be used for:
– The salary of executive officials above $197,300 (Level II); – Lobbying of any kind;
– Abortions or embryo research;
– Enforcement of most nondisclosure agreements; – Human trafficking; and more.
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Attestation, cont.
• Any provider that receives more than $150,000 total in CARES Act funds must submit a report that contains:
– Total amount of funds received from HHS;
– the amount of funds received that were expended or obligated for each project or activity;
– a detailed list of all projects or activities for which large covered funds were expended or obligated, including: the name and description of the project or activity, and the estimated number of jobs created or retained by the project or activity, where applicable; and
– detailed information on any level of sub-contracts or subgrants awarded by the covered recipient or its subcontractors or subgrantees, to include the data elements required to comply with the Federal Funding Accountability and Transparency Act of 2006 allowing aggregate reporting on awards below $50,000 or to individuals, as prescribed by the Director of the Office of Management and Budget.
• Not later than 10 days after the end of each calendar quarter • Includes funds from:
– CARES Act
– Coronavirus Preparedness and Response Supplemental Appropriations Act – Families First Coronavirus Response Act, or
– Any other Act primarily making appropriations for the coronavirus response and related activities
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Recommendations
• Identify a compliance officer or individual who will be responsible for
these funds.
• Adopt a written policy and procedure to ensure compliance with the
Terms and Conditions. This policy should be incorporated into your
Compliance Plan.
• Adopt a written compliant financial record-keeping process.
– It should cover how you are allocating appropriate expenses as well as properly documenting “lost revenue”.
• Adopt a written billing policy and update your Patient Financial
Responsibility Form.
– Under the FFCRA and the CARES Act, private insurance plans are required to waive patient co-sharing payment requirements. Providers should have a documented plan for compliance.
• Providers that received money under another federal
COVID-related program (PPP, EIDL, etc.) must separately account for such
funds and maintain appropriate records.
– No double dipping!
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Telehealth
• The CARES Act and other waiver actions taken by HHS has
greatly increased the availability and reimbursability of
telehealth
• Requirements for synchronous technology (audio & visual
components) have been waived for most Medicare telehealth visits • Medicaid and commercial payors are also loosening up their
requirements
• COVID-19 Telehealth Program (FCC) - $200 million
• Reimbursements to providers that purchase telecommunications, information services, and connected devices necessary to provide telehealth services to patients in response to the coronavirus pandemic
• Nonprofit and public eligible health care providers ONLY • Will not reimburse IT costs or training costs
• Apply at https://www.fcc.gov/covid-19-telehealth-program • Funding is first-com, first-served
Accelerated and Advance Payment Program
• CMS is authorized to provide accelerated or advance payments
during the period of the public health emergency to any eligible
Medicare provider/supplier who submits a request to the
appropriate Medicare Administrative Contractor (MAC).
• Eligible providers include:
– Billed Medicare for claims within the previous 180 days, – Are not in bankruptcy,
– Are not under active medical review or program integrity investigation, and – Do not have any outstanding delinquent Medicare overpayments.
• CMS indicated that advance payments must be requested at the
individual NPI level, as this is how the MACs calculate the amount
of payments to be advanced. If everyone in a group wants to
request an advance payment, each physician would need to
complete a form with their NPI. The payments will be made in the
same way other Medicare payments are made. Therefore, if the
group’s claims are paid to a particular TIN, that is where the
advance payment will be sent.
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• Qualified providers/suppliers will be asked to request a
specific amount using an Accelerated or Advance Payment
Request form provided on each MAC’s website. Most
providers and suppliers will be able to request up to 100% of
the Medicare payment amount for a three-month period.
Inpatient acute care hospitals, children’s hospitals, and
certain cancer hospitals are able to request up to 100% of the
Medicare payment amount for a six-month period. Critical
access hospitals (CAH) can request up to 125% of their
payment amount for a six-month period.
– You do not have to do the math! The request will automatically be 100% of the claims from Oct-Dec 2019. You can request less and ask for more later.
• Payments should be issued within 7 days of the MAC
receiving the request.
• CMS has extended the repayment of these payments to
begin 120 days after the date of payment.
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Accelerated and Advance Payment Program
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• Repayment: At the end of the 120-day period, the
recoupment process will begin and every claim
submitted by the provider/supplier will be offset from the
new claims to repay the accelerated/advanced payment.
– Inpatient acute care hospitals, children’s hospitals, certain
cancer hospitals, and Critical Access Hospitals (CAH) have up
to one year from the date the accelerated payment was made to
repay the balance.
– All other Part A providers and Part B suppliers will have 210
days from the date of the accelerated or advance payment was
made to repay the balance.
– For the small subset of Part A providers who receive Period
Interim Payment (PIP), the accelerated payment will be included
in the reconciliation and settlement of the final cost report.
– If extensions are needed, a 10.25% interest will likely be
charged
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Accelerated and Advance Payment Program
Paycheck Protection Program (PPP)
• PPP offers loans for the following types of
businesses experiencing revenue disruption as
a result of COVID-19:
• Small businesses with fewer than 500 employees.
• Select types of businesses with fewer than 1,500
employees.
• 501(c)(3) non-profits with fewer than 500 workers.
• Some 501(c)(19) veteran organizations.
• Self-employed workers, sole proprietors, and
freelance or gig economy workers.
Paycheck Protection Program (PPP)
• SBA’s 500-employee threshold includes all types of employees: full-time,part-time, and any other status. • Loan Forgiveness
• Borrower under PPP shall be eligible for loan forgiveness equal to the amount spent by Borrower during an 8-week period after the origination date on (i) rent, (ii) payroll costs for workers making less than $100K, (iii) interest on a
mortgage, and (iv) utility payments.
• The amount forgiven may not exceed the principal of the loan.
• If businesses can restore normal payroll in the eight-week period, they should be able to get the loan forgiven, effectively making the loan a grant.
• The Department of the Treasury and the Small Business Administration (SBA) have added stipulations to the PPP loan forgiveness. According to this guidance, not more than 25% of the forgiven amount may be for non-payroll costs and compensation levels of employees must be maintained— rather than the Congressional stipulation of not reducing compensation beyond 25%.
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Paycheck Protection Program
• The first $349 billion of the PPP was exhausted on
April 16, only 14 days after the application opened.
• "The SBA has processed more than 14 years'
worth of loans in less than 14 days," according to
a joint statement from U.S. Treasury secretary
Steven T. Mnuchin and SBA administrator Jovita
Carranza.
• An additional $320 billion for small businesses
was included in the newest stimulus bill passed by
the Senate on 4/21. It is expected that the House
will also approve on 4/23.
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Main Street Lending Program
• This program is meant to support lending to small and
medium-sized businesses that were in good financial
standing before COVID-19.
• Eligible businesses:
– 10,000 or less employees, or – 2019 revenues of $2.5 billion or less
– Cannot be participating in the Primary Market Corporate Credit Facility
– Can participate in PPP
• Loans have 4 year maturity and principal/interest deferred for
one year. Interest rates are between 2.5-4%.
• Lenders may originate new loans or increase the size of
existing loans.
• Up to $600 billion available but it is unclear exactly how this
will be administered
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Main Street Lending Program
• Banks that qualify as “eligible lenders” will make loans under the
Program, rather than the Federal Reserve or Treasury.
• Loans must be between $1 million and $25 million in most
circumstances.
– Loans are NOT forgivable.
• Borrowers must attest that they require financing due to the exigent
circumstances presented by the COVID-19 pandemic, and that,
using the proceeds of the Program loan, it will make reasonable
efforts to maintain its payroll and retain its employees during the
term of such Program loan (at least 90% retention).
• There are other employee compensation restrictions for employees
that make between $425,000 and $3 million.
• Borrowers may not use funds to repay or refinance existing debt
and businesses must pay off the Main Street loan before repaying
other loan commitments of lesser priority.
• More guidance to come in the next few days.
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Emergency Economic Injury Disaster
Loan (EIDL) Advance
• In response to the Coronavirus (COVID-19) pandemic, small business owners in all U.S. states, Washington D.C., and territories are eligible to apply for an Economic Injury Disaster Loan advance of up to $10,000. This advance will provide economic relief to businesses that are currently experiencing a temporary loss of revenue.
• This loan advance will not have to be repaid and is considered a grant. • When small businesses submit their applications for the EIDL loan, they
can indicate they are interested in the emergency advance at the same time.
• There are no personal guarantees needed for loans less than $200,000. Businesses should have documentation ready to show their operating expenses and revenue.
• Note that the SBA is not currently accepting applications for the EIDL CoVID-19 related assistance program or EIDL Advances but this may re-open with more federal funding.
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EIDL Terms
• The $10,000 EIDL advance is forgivable and can be used for a wide
range of business needs including 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 losses.
• Aside from the $10,000 grant, the rest of the loan is not forgivable.
• The loan will have a 3.75% interest rate for small businesses and a
2.75% interest rate for nonprofits.
• Repayment can be deferred for six months. The maximum term of
repayment is 30 years.
• Can a business get an EIDL and a PPP loan?
• Yes, small businesses can get both an EIDL and a PPP loan as long as they don’t pay for the same expenses.
• However, be sure to check with your financial advisor or lender before taking both types of loans if you are not sure of the specifics.
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Employee Retention Tax Credit
• A fully refundable tax credit for employers equal to 50% of qualified wages (including allocable qualified health plan expenses).
• Credit applies to qualified wages paid after March 12, 2020, and before January 1, 2021.
• The maximum amount of qualified wages for each employee for all calendar quarters is $10,000, so that the maximum credit for an Eligible Employer for qualified wages paid to any employee is $5,000.
• Eligible Employers for the purposes of the Employee Retention Credit are those that carry on a trade or business during calendar year 2020, including a tax-exempt organization, that either:
• Fully or partially suspends operation during any calendar quarter in 2020 due to orders from an appropriate governmental authority limiting commerce, travel, or group meetings (for commercial, social, religious, or other purposes) due to COVID-19; or
• Experiences a significant decline in gross receipts during the calendar quarter.
• Note: Self-employed individuals are not eligible for this credit for their self-employment services or earnings.
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Employee Retention Tax Credit
• When is the operation of a trade or business partially
suspended for the purposes of the Employee Retention
Credit?
– The operation of a trade or business may be partially suspended if an appropriate governmental authority imposes restrictions upon the business operations by limiting commerce, travel, or group meetings (for commercial, social, religious, or other purposes) due to COVID-19 such that the operation can still continue to operate but not at its normal capacity.
– Example: A state governor issues an executive order closing all restaurants, bars, and similar establishments in the state in order to reduce the spread of COVID-19. However, the executive order allows those establishments to continue food or beverage sales to the public on a carry-out, drive-through, or delivery basis. This results in a partial suspension of the operations of the trade or business due to an order of an appropriate governmental authority with respect to any
restaurants, bars, and similar establishments in the state that provided full sit-down service, a dining room, or other on-site eating facilities for customers prior to the executive order.
Employer Payroll Tax Deferral
• The CARES Act allows employers to defer the deposit and payment of the employer's share of Social Security taxes and self-employed individuals to defer payment of certain self-employment taxes.
• Applies to employer's share of Social Security tax that would otherwise be required to be made during the period beginning on March 27, 2020, and ending December 31, 2020.
• Information will be provided in the near future to instruct employers how to reflect the deferred deposits and payments otherwise due on or after March 27, 2020 for the first quarter of 2020 (January – March 2020). In no case will Employers be required to make a special election to be able to defer deposits and payments of these employment taxes.
• Once an employer receives a decision from its lender that its PPP loan is forgiven, the employer is no longer eligible to defer deposit and payment of the employer's share of Social Security tax due after that date.
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What’s Coming Next?
• Congress continues to negotiate about how best to pass additional
COVID-19 relief funding although the Senate passed an interim bill
on 4/21.
• It is expected that the House will pass this bill as early as 4/23.
• The interim funding bill includes:
– $320 billion in additional funding for the PPP.
– Approximately $75 billion in additional funding for the Public Health and Social Services Emergency Fund to support providers experiencing revenue loss as a result of COVID-19 (in addition to the $100 billion already authorized and currently being finalized for distribution by the Department of Health and Human Services)
– $25 billion in new funding to support national COVID-19 testing efforts, including those at community health centers
– $60 billion for the Economic Injury Disaster Loan program
– Possible additional funding to support state and local governments
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