Valuable Insights: Financial Support Available For Providers Through The CARES Act
Kathleen Gravelle – Chief Risk Officer
April 26, 2020 Update
CMS announced that it is reevaluating the amounts that will be paid under its Accelerated Payment Program and suspending its Advance Payment Program to Part B suppliers effective immediately.
April 24, 2020 Update
On 4/24/2020, the President signed a new wave of legislation which provides additional funding for the Paycheck Protection Program (PPP) and Economic Injury Disaster Loans (EIDL). The stimulus package includes $310 billion for the PPP and $60 billion for the EIDL. It is recommended that those interested in applying do so as soon as the Small Business Administration reopens these programs, as analysts predict funding will be depleted in less than 10 days. As a reminder, the Valuable Insights webcast and summary below provide details about each program and how to apply.
The recently enacted Coronavirus Aid, Relief, and Economic Security (CARES) Act includes several programs and resources available to physicians and physician practices. Watch this webcast, or refer to the summary below for an overview of the following CARES Act provisions:
- Paycheck Protection Program
- Economic Injury Disaster Loan (EIDL) and Advance
- CMS Accelerated and Advance Payment Program
Paycheck Protection Program (PPP)
The PPP allows small businesses with fewer than 500 employees to apply for a loan of up to 250% of average monthly payroll costs to cover payroll and other qualifying business expenses such as mortgage interest, rent, and utilities. Loan amounts covering up to eight weeks of qualifying expenses are eligible for forgiveness if a business either retains all employees on payroll without reducing salaries by more than 25% or rehires employees to reach prior staffing levels by June 1, 2020.
Details of the PPP from the Small Business Administration: https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/paycheck-protection-program-ppp
Find an eligible lender for a PPP loan: https://www.sba.gov/paycheckprotection/find
FAQs on the PPP from the US Treasury Department: https://home.treasury.gov/system/files/136/PPP--Fact-Sheet.pdf
Economic Injury Disaster Loan (EIDL) Emergency Advance
The EIDL allows small businesses to apply for low interest loans to pay for business expenses that could have been met had the disaster not occurred. Once a business has applied for an EIDL, they can request an emergency advance of up to $10,000 which does not need to be repaid. Business can apply for both a PPP loan and EIDL advance, however the loans may not be used for the same expenses and the advance portion received under the EIDL would be subtracted from the amount forgiven in the PPP.
Details of the EIDL Emergency Advance from the Small Business Association: https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/economic-injury-disaster-loan-emergency-advance
Online application: https://covid19relief.sba.gov/#/
CMS Accelerated and Advance Payment Program
CMS is authorized to provide advanced payments to providers who meet eligibility criteria. Most providers will be able to request up to 100% of their Medicare payment amount from October to December 2019. Providers must submit a request with their designated Medicare Administrative Contractor (MAC), and requests will be reviewed and advanced payments issued within seven days of the request. Recoupment of advanced payments will automatically begin 120 days after disbursement. Providers billing Medicare Part B will have 210 days for repayment without interest.
Locate your designated MAC: https://www.cms.gov/Medicare/Medicare-Contracting/FFSProvCustSvcGen/MAC-Website-List
CMS Advanced Payment Fact Sheet: https://www.cms.gov/files/document/accelerated-and-advanced-payments-fact-sheet.pdf
Small Business Administration Coronavirus Small Business Guidance and Loan Resources: https://www.sba.gov/page/coronavirus-covid-19-small-business-guidance-loan-resources
Small Business Administration Resources, including SBA District office locator and links to other organizations offering small business information, advice, and counseling: https://www.sba.gov/content/find-local-sba-office
Documents You’ll Need to Apply:
- Complete copies, including all schedules, of your federal and state tax returns for your business for the last two years*
- If the most recent federal income tax return has not been filed, a year-end profit and loss statement and balance sheet for that tax year is acceptable.
- A current year-to-date profit and loss statement*
- Monthly sales figures (SBA Form 1368)
- Complete copies, including all schedules, of the most recent federal income tax returns for each principal owning 20 percent or more of the applicant business, each general partner or managing member, and each affiliate when any owner has more than a 50 percent ownership in the affiliate business*
- A Personal Financial Statement (SBA Form 413) for:
- the applicant (if a sole proprietorship); or
- each principal owning 20 percent or more of the applicant business, each general partner or managing member
- A schedule of Liabilities listing all fixed debts. (SBA Form 2202 may be used)
*Government entities are encouraging businesses to apply for aid online, and as such, you should have PDF copies of these documents for submission online.