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COVID-19 Practice Financial Assistance

Last updated 10/2/2020

Practice Re-opening Resources

  • ACP’s Clinician’s Guide includes some resources to help guide practices in plans for re-opening.  Resources include guides, checklists, staffing and workflow modifications, and materials for communicating with patients.
  • The CDC offers a framework for providing non-COVID-19 care during the pandemic.
  • ACP offers clinical and public policy guidance on how to resume some economic, social and medical care activities to mitigate COVID-19 and allow expansion of healthcare capacity.

There are several mechanisms in the CARES Act to assist in mitigating financial shortfalls due to COVID-19:

Provider Relief Fund Payments:

Relief Fund Payments are intended to provide funds to hospitals, physicians, and other healthcare entities to cover COVID-related expenses and revenue losses.  These are payments, not loans, so recipients do not need to pay them back, but there are reporting requirements and other restrictions per the Terms and Conditions for accepting the payments. There have been several distributions of general allocation payments, plus one for Medicaid and CHIP providers, and several “targeted” allocations.  For more information about each distribution, click here.

  • These FAQs offer clarification on  various aspects of the PRF program.
  • The IRS provided clarification that Provider Relief Fund payments are considered taxable income.  ACP is advocating Congress to change that.
  • Recipients of Provider Relief Funds (all distributions) will be required to submit detailed reports 
    • This fact sheet provides summary and timeline of reporting requirements.
    • This guidance provides more detailed reporting requirements for entities that received $10,000 or more, including general and COVID-related expenses and income loss.
    • Key dates: 
      • January 15, 2021 – Reporting portal opens
      • Feb 15, 2021 – First reporting deadline for all providers on use of funds
      • July 31, 2021 – Final reporting deadline for providers who did not fully expend PRF funds prior to 12/31/2020.
    • Regardless of which payments you have received, it is important to keep detailed records (receipts, payments, etc) of how you spend the money.  You must retain the records for 3 yrs from the date of receipt.
  • Beginning October 5, physicians may apply for a third distribution of Provider Relief Fun payments to cover financial losses and changes in operating expenses. The application portal will be open October 5 through November 6, 2020. Read the full announcement here to see if you are eligible and the how the payment will be distributed. Additional details can be found here as soon as they are available.

Medicare’s Accelerated and Advance Payment Program

The Accelerated and Advance Payment Program was suspended as of April 26. 

  • The changes to the Medicare Accelerated and Advance Payment Program include:
    • Extending the deadline to begin repaying the loan to 365 days from receipt of the payment.  (The balance would be due no later than September 2022.)
    • The per-claim recoupment amount will change from 100% to 25% for the first 11 months, and then 50% of claims withheld for an additional six months.
    • If not repaid in full, the interest rate will be 4% (down from 10.25%).
    • Clinicians will have 29 months (up from 1 year) to fully repay the loan.
  • For those who received payments through this program, this FAQ explains the payback terms.

Small Business Administration Programs

The Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan (EIDL) emergency advance, which are managed by the Small Business Administration (SBA), offer low-interest loans to small businesses to cover payroll, benefits, rent, mortgage, utilities, and other business expenses.  

  • The Paycheck Protection Program Flexibility Act of 2020 became law on June 5, 2020.  The legislation lowers the amount required to be spent on payroll costs from 75% to 60%.  It also extends the “covered period” to 24 weeks (through Dec. 31), allows PPP borrowers to defer payroll tax payments, establishes 5 years as the minimum maturity term for the balance remaining after forgiveness, and provides greater flexibility to rehire employees that would otherwise reduce the amount forgiven. Specifically, this law:
    • Establishes a minimum maturity of five years for a paycheck protection loan with a remaining balance after forgiveness.
    • Extends the covered period during which a loan recipient may use such funds for certain expenses while remaining eligible for forgiveness.
    • Raises the non-payroll portion of a forgivable covered loan amount from the current 25% up to 40% (and lowers the payroll portion from 75% to 60%).
    • Extends the period in which an employer may rehire or eliminate a reduction in employment, salary, or wages that would otherwise reduce the forgivable amount of a paycheck protection loan. However, the forgivable amount must be determined without regard to a reduction in the number of employees if the recipient is (1) unable to rehire former employees and is unable to to hire similarly qualified employees, or (2) unable to return to the same level of business activity due to compliance with federal requirements or guidance related to COVID-19.
    • Revises the deferral period for paycheck protection loans, allowing recipients to defer payments until they receive compensation for forgiven amounts. Recipients who do not apply for forgiveness shall have 10 months from the program's expiration to begin making payments.
    • Eliminates a provision that makes a PPP loan recipient who has such indebtedness forgiven ineligible to defer payroll tax payments.
  • Loan forgiveness applications: The SBA released an application to submit to lenders when seeking loan forgiveness. The application contains instructions, a PPP Loan Forgiveness Calculation Form, and the PPP Schedule A (including a PPP Schedule A Worksheet). The deadline to apply has been extended to August 8, 2020.
  • This fact sheet for borrowers and FAQs from the Department of Treasury provide a lot of guidance and clarification on the PPP loan program. 
  • EIDL applicants who have already submitted their applications will continue to be processed on a first-come, first-served basis.
  • The AICPA offers an updated downloadable Loan Forgiveness Calculator and FAQs regarding the most recent changes and guidance to the SBA’s PPP program. (Updated 6/26) 

Other Tax Benefits

There are some tax benefits available to employers, including medical practices, designed to keep employees on the payroll.  [Note: It is important to talk to your accountant or financial advisor about the different programs, as some do interact with or are contraindicated with the above PPP loans.]  

  • Employee Retention Credit - The Employee Retention Credit is a fully refundable tax credit for employers equal to 50% of qualified wages (including allocable qualified health plan expenses) that Eligible Employers pay their employees. The IRS has issued some FAQs on the Employee Retention Credit, including eligibility, payback, and the interaction with other programs.
  • Payroll tax deferral - 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.  This is now allowed based on the PPP Flexibilities Act (passed 6/5/2020).
  • The CARES Act also includes provisions related to student loans.  Under the law, no federal student loans are required between March 13 and September 30, 2020, and interest will drop to zero during that time period.  In addition, employers can pay up to $5,250 toward an employee’s student loans tax-free through the end of the year. Normally, these payments are treated as wages, but until December 31, 2020, these payments can be excluded from income and payroll taxes – benefitting both the employer and those receiving the repayment assistance.