Frequently Asked Questions from Connecting CARES Act Funding Options for Health Care Providers Webinar
Below are the frequently asked questions from "Connecting CARES Act Funding Options for Health Care Providers" held on April 30, 2020. Click here to watch the recorded version of the webinar.
PPP Loan Information
Q: Are the expenses covered by the PPP loan deductible?
A: As of May 5, the answer is no. However, in a letter sent to the Secretary of the Treasury on May 5, Congress requested a review of the current position of non-deductibility, indicating “we are writing to express our concern with the position taken by Treasury and the IRS in Notice 2020-32, which is contrary to congressional intent. Notice 2020-32 provides that otherwise deductible business expenses are not deductible if the taxpayer is the recipient of a Paycheck Protection Program (PPP) loan that is subsequently forgiven. We believe the position taken in the Notice ignores the overarching intent of the PPP, as well as the specific intent of Congress to allow deductions in the case of PPP loan recipients”. We will update this information as further updates and guidance are provided.
Q: Does agency staffing count as an eligible use of the Provider Relief Fund under the terms and conditions of the funding?
A: If the agency staff is replacing existing staff (not adding any new positions), only the incremental cost above the cost of an employee would be eligible. However, if you needed to use agency staff for new positions related to the compliance requirements for the Provider Relief Fund, the total cost should be an eligible use. Example, if you hired a temporary security guard as a result of Covid-19 where a previous position did not exist and that person falls under the compliance guidelines, then the entire expense of that security guard could be considered an appropriate use. As always, check with the FAQs on the HHS website for any updates.
Q: How long can you defer the payment of the employer’s portion of the Social Security Tax (6.2%) without penalty?
A: “Employers who have received a PPP loan may defer deposit and payment of the employer's share of Social Security tax that otherwise would be required to be made beginning on March 27, 2020, through the date the lender issues a decision to forgive the loan in accordance with paragraph (g) of section 1106 of the CARES Act”.
HHS Stimulus Funding
Q: Has there been any discussion about funding for providers who do little or no Medicare?
A: In the initial $100B Provider Relief Fund distribution, HHS indicated that “There are some providers who will receive further, separate funding, including skilled nursing facilities, dentists and providers that solely take Medicaid”. As of 5/5/2020, HHS has not indicated a specific amount to be distributed or how these funds would be allocated.
Q: What are the reporting requirements for providers who have received HHS Provider Relief Funds?
A: As of 5/5/2020, HHS has not published the reporting requirements. The only guidance is in the Terms and Conditions document, which states: "The Recipient shall submit reports as the Secretary determines are needed to ensure compliance with conditions that are imposed on this Payment, and such reports shall be in such form, with such content, as specified by the Secretary in future program instructions directed to all Recipients."
Q: We did not receive a Provider Relief Fund payment from the first distribution. Can we apply for the second round?
A: You must have received a first distribution before you can apply for the second. If you received Medicare payments in 2019 and did not get a first-round distribution, call the Provider Relief Hotline at 866-569-3522. We understand that there were some issues between CMS and United Healthcare who is the contractor distributing the PRF.
Q: I understand that HHS has not clarified what information needs to be submitted and in what format related to documenting sources and uses of the Provider Relief Fund. However, are there any current guidelines of when that information must be provided?
A: If the combination of all Relief Fund Payments from HHS (regardless of the Act in which it was authorized) is greater than $150,000, you will need to proactively submit quarterly financial information on the sources and uses of those funds – no later than 10 days after the end of the calendar quarter. The information needs to be in an auditable format – meaning if audited by HHS you have the detailed supporting information available for audit.
Q: What are the restrictions on use of the HHS Relief Funds?
A: HHS stated the Relief Funds are to be used to: “prevent, prepare for, and respond to coronavirus, and that the Payment shall reimburse the Recipient only for health care related expenses or lost revenues that are attributable to coronavirus”. They also provided guidance that almost any patient would be considered a potential for coronavirus. It is imperative that you keep track of the sources and uses of all funds as applying different funding sources to cover the same cost is prohibited (generally known as “double dipping”). Since the Relief Funds can be used to cover lost revenue, calculate your lost revenue and determine how much additional HHS funding you received, if any. If any excess funding, document your source and use of those funds as well with the stated criteria.
Q: Can a provider receiving Provider Relief Funds have their reported financial information become public information?
A: Part of the attestation of the second round of funding states: “The Recipient consents to the Department of Health and Human Services publicly disclosing the Payment that Recipient may receive from the Relief Fund. The Recipient acknowledges that such disclosure may allow some third parties to estimate the Recipient’s gross receipts or sales, program service revenue, or other equivalent information”.
Q: Can you provide more information on the required attestation needed for the HHS Provider Relief Funding?
A: An attestation is required for both the first and second round of the Provider Relief Funding. It is the responsibility of the provider who received funds to be proactive and go to https://www.hhs.gov/coronavirus/cares-act-provider-relief-fund/index.html which will have links to the attestation pages as well as details related to the use of funds.
Q: The Provider Relief Funds allow for using the money for lost revenue. How is that calculated?
A: HHS offers the following options for estimating lost revenues: 1) Compare year-over-year revenue or 2) Compare budgeted to actual revenue. For April 2020, providers may estimate the total monthly loss based on data from the first few weeks and extrapolation from March data. You may use a reasonable method of estimating the revenue during March and April compared to the same period had COVID-19 not appeared. For example, if you have a budget prepared without taking into account the impact of COVID-19, the estimated lost revenue could be the difference between your budgeted revenue and actual revenue. It would also be reasonable to compare the revenues to the same period last year.
Telehealth and Telemedicine
Q: Does an outpatient dialysis facility qualify as an Originating Site for telehealth services?
A: Yes, according to CMS, dialysis facilities are on the list of facilities qualifying as originating sites.
Q: How much is the Originating Site Medicare payment?
A: The Medicare Learning Network (MM11560) lists the amount as $26.65 per call.