On June 3, 2020, Congress passed the Paycheck Protection Program Flexibility Act of 2020 (PPPFA) that modifies the Paycheck Protection Program (PPP) that was put in place as part of the Coronavirus Aid, Relief and Security (CARES) Act. The PPP is a potentially forgivable loan administered by the Small Business Administration (SBA). This latest legislation changes some of the terms and requirements that will lead to loan forgiveness as we outlined in our recent article.
There are many variables to consider in addressing the uncertainties that lie ahead. While we know there is a lot of excellent information available, our hope is that we have been able to curate some relevant guidance that will help your practice thrive again in this period of uncertainty. Areas of focus for your practice should include:
The supply of health care today is directly affected by our care delivery systems. Hospitals have been working hard to meet the demand caused by the pandemic while preserving resources needed for safety. Additionally, in order to do their part in lessening the spread, they have had to quickly adapt to meet precautionary measures and reduce non-urgent and elective care.
The Paycheck Protection Program (PPP) is a loan from the bank that will have to be repaid by the practice with interest unless all or a portion of the loan is forgiven through meeting certain requirements. Practices with a PPP loan need to be proactive and put themselves in the best possible position for maximum loan forgiveness. The window of opportunity for forgiveness closes 8 weeks (56 days) from the date the funds are received. Determine this outside date first, and have it burned in the minds of accountants and bookkeepers who provide service to your practice.
The latest legislation designed to assist businesses during the COVID-19 public health emergency is known as the “Paycheck Protection Program and Health Care Enhancement Act”, signed into law on April 24, 2020. It provides $484 billion to supplement the programs initiated under the CARES Act, including $310 billion of additional funding for the Paycheck Protection Program (PPP) loans administered by the Small Business Administration (SBA). There have also been revisions to the Medicare Accelerated and Advance Payment Program and expansion of the HHS “Lost Revenue/Increased Cost” Grants.
The flurry of legislative and regulatory activity over the past two months leaves us with our heads spinning! Some funding, such as the $30 billion distribution of CARES Act Grant Funds, came to practices automatically and unexpectedly while other sources such as the Paycheck Protection Program through the Small Business Administration (SBA) have taken a lot of work with little result so far. We reviewed as many federal programs as possible in our recent articles HHS Provider Relief Payment and Your Radiology Practice and What We Know - Federal Relief Programs That Could Assist Radiology Practices, and additional funding has been promised. Practice managers have to be aware of the follow-up steps that are required following the receipt of money from any of these funding sources.
This article was updated on
April 16, 2020.
Radiology practices are still trying to understand all of the implications of the payment sent automatically on April 10 by the Department of Health & Human Services (HHS). Our article Update - CARES Act Relief Program Grant Fund Payments Delivered by HHS outlined the program, but many questions remain.
When the CARES ACT was passed on March 27, details about the specific allocation of the $100 billion were not initially revealed. Today, April 10, $30 billion is currently being distributed to all Medicare providers in the first round of funding disbursement.
As of March 27, 2020, three pieces of legislation had been passed to address the economic impact of the COVID-19 coronavirus Public Health Emergency (PHE) and more legislation is expected. Because they were hastily drafted and passed, technical corrections and interpretations are being issued regularly. At the same time, certain agencies like the Centers for Medicare and Medicaid Services (CMS) are using the declared PHE to amend their own regulations to assist the healthcare community. The legislation covers vast areas of the economy, but we will focus on those features that might be of interest to a medical practice or any other small business with fewer than 500 employees.
With the expanded eligibility of the Medicare Accelerated Payment Program, additional entities will now qualify for, essentially, an interest-free loan. Within the CARES Act, physicians and other Medicare Part B Suppliers are now eligible to receive a needed increase to cash flow during the COVID-19 pandemic. (Supplier is a physician or other practitioner that delivers health care services under Medicare, excluding a provider).