The Coronavirus Aid, Relief, and Economic Security Act ("CARES Act"), signed into law on March 27, 2020, provides emergency assistance and health care response for individuals, families and businesses affected by the 2020 coronavirus ("COVID-19") pandemic. The CARES Act includes several provisions that could provide relief to physicians as a result of the pandemic. We've provided a list below of 10 such provisions in the CARES Act that may be of interest to physicians based on the laws and guidance published through April 13, 2020.
1. Paycheck Protection Program ("PPP") Loan
- Generally. Certain small business are eligible
for a partially (and in some cases, fully) forgivable SBA
"paycheck protection" loan deployed and originated by
private lenders. These loans will be provided on a first come,
first served basis.
- Loan details. The maximum loan amount is the
lesser of 2.5 times the average total monthly payroll costs or $10
million. The proceeds can be used for certain payroll costs,
benefits, insurance premiums, interest payments and rent and
utilities.
- Forgiveness. Subject to certain limitations,
certain costs incurred during the 8-week period after origination
are forgivable.
2. SBA Economic Injury Disaster Loans and Loan Advance ("EIDL")
- Generally. The CARES Act expands the
availability of the SBA's EIDL's loans and provides for an
emergency grant up to $10,000.
- Loan details. These are lower interest rate
loans of up to $2 million. Principal and interest may be deferred
at the SBA's discretion. The loans can be used to pay for
expenses that could have been met had the disaster not occurred,
including payroll and other operating expenses.
- Emergency grant. If requested, the SBA will distribute an advance on the EIDL loan, of not more than $10,000, which can be used for certain purposes such as maintaining payroll and rent. Businesses are not required to repay any amount of the advance, even if the loan application is subsequently denied.
For a more in-depth overview of these SBA loans, please see Thompson Coburn's previous coverage here.
3. Payroll tax deferral
- Employers and self-insured individuals can generally defer the
employer portion of Social Security taxes required to be paid to
the IRS for the period beginning on March 27, 2020, and ending on
December 31, 2020, as follows: (i) 50% of the employer portion of
any Social Security taxes may be deferred until December 31, 2021,
and (ii) the remaining 50% of such taxes may be deferred until
December 31, 2022.
- To the extent an employer receives a PPP loan under the CARES
Act, the employer may defer deposit and payment of the employer
portion of any Social Security taxes so long as such PPP loan has
not yet been forgiven. Once a PPP loan is forgiven, an employer may
no longer defer any deposits or payments of the employer portion of
any Social Security taxes due after the
date of such loan forgiveness. The employer portion
of any Social Security taxes deferred prior to the forgiveness of
the PPP loan are still eligible for deferral.
4. Employee retention tax credit
- Certain eligible employers can receive a payroll tax credit
against employment taxes. The employee retention payroll tax credit
is generally equal to 50% of the qualifying wages (qualifying wages
capped at $10,000) paid to an employee.
- The employee retention payroll tax credit only applies to wages
after March 12, 2020. Whether wages paid after March 12 to an
employee constitute qualifying wages depends on the number of
employees employed by the employer.
- Employers are generally "eligible employers" to the
extent such employers conduct a trade or business during 2020 and
such employer either (i) was fully or partially suspended due to
governmental order, or (ii) experienced a 50% decline in gross
receipts during a quarter as compared to the same quarter in
2019.
- To the extent the credit generates a tax refund, the employer
can obtain the tax refund by filing IRS Form 7200.
- To the extent the employer receives a PPP loan under the CARES Act, no employee retention payroll tax credit is available.
For a more in-depth overview of the tax provisions from the CARES Act, please see Thompson Coburn's previous coverage here.
5. Direct financial support from HHS
- Generally. The CARES Act provides $100 billion
to reimburse eligible health care providers for health care related
expenses or lost revenues attributable to COVID-19 such as costs
related to building or construction of temporary structures,
leasing of properties, medical supplies and equipment, increased
workforce and training, emergency operation centers, retrofitting
facilities and surge capacity.
- Payments. CMS has started making $30 billion
in direct deposit payments to providers (including payments to
physician practices and solo practitioners who are not part of a
practice group). Eligible providers will receive a portion of the
$30 billion based on such provider's share of total Medicare
FFS reimbursements in 2019. The total FFS payments were
approximately $484 billion in 2019. Therefore, providers will be
able to estimate their payments based on this total 2019 FFS
amount.
6. Medicare advance payments
- Generally. CMS is authorized to provide three
months of advance payments during the pandemic to an eligible
Medicare provider who submits a request to the appropriate Medicare
Administrative Contractor ("MAC").
- Amount of payment; processing time. Most
providers will be able to request up to 100% of the Medicare
payment amount for a three-month period. Each MAC will process
requests within seven calendar days.
- Repayment and recoupment. Physicians billing
under Part B will have 210 days from the date of payment to repay
the balance. If the amount is not paid back within 120 days after
the date of the payment, CMS will begin automatically recouping
payments from newly-submitted claims until the amount is paid in
full.
7. Suspension of 2% Medicare sequester.
Medicare payments between May 1, 2020 through December 31, 2020 will not be subject to the 2% Medicare sequestration that has been required under the Budget Control Act of 2011. This will increase payments to physicians during the COVID-19 outbreak. Providers should note, however, in exchange for this temporary suspension, the CARES Act extends the sequestration policy through 2030.
8. Telehealth
- Coverage of telehealth services are relaxed beginning March 6,
2020, through the duration of the pandemic allowing providers to be
paid by Medicare for evaluation and management visits, mental
health counseling and preventative health screenings through three
main avenues: telehealth visits, virtual check-ins and
e-visits.
- Even though CMS encourages states and private insurers to also
relax telehealth standards during the pandemic, note that the CARES
Act only relaxes the telehealth standards from a Medicare payment
perspective. Accordingly, the applicable state's physician
licensure laws and applicable payor's requirements must be
taken into consideration as well.
9. Diagnostic tests
Health plans are required to cover all diagnostic tests for COVID-19 (without cost-sharing or prior authorization requirements) if certain conditions are met (e.g., the test is approved by the FDA).
10. Limitation of liability for volunteers
Physicians providing volunteer services in response to the COVID-19 outbreak will not be liable under federal or state law for any harm caused by an act or omission in the provision of health care services during the COVID-19 outbreak if certain requirements are met (e.g., the services are within the professional's scope of practice).
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.