RHEUMATOLOGY PRACTICES & THE CARES ACT FINANCIAL ASSISTANCE - - PowerPoint PPT Presentation

RHEUMATOLOGY PRACTICES & THE CARES ACT

FINANCIAL ASSISTANCE & RECOVERY OPTIONS FOR PHYSICIAN PRACTICES APRIL 22, 2020

Please note this presentation contains general information which may not be applicable to all facilities, communities and circumstances. We believe this is the most up-to-date information available currently but is subject to change as circumstances

• warrant. We are not providing legal or accounting advice to any participant. We

encourage you to review your practice’s situation with your lawyer or accountant.

Moderator

Ray Waldrup is the CEO of Articularis Healthcare Group, Inc (AHG) and American Rheumatology Network (ARN) with more than 25 years of experience in healthcare. AHG is the largest rheumatology practice in the country with 41 physicians, 14 advanced practice providers throughout Florida, Georgia, South Carolina, & Tennessee. ARN is a physician led and owned organization committed to improving healthcare by empowering independent rheumatology practices across the nation. Through our network physicians and practice administrators have access to best business practices, innovative practice performance technology, and value-based treatment pathways.

Ray Waldrup

Presenters

Tim Hewson, J.D. Cody Paul, CPA

Featured Panel Members

JJ Littrell, CPA James R. Willey, J.D.

Attorney with Hall Render

jwilley@hallrender.com

Director with Elliott Davis

jj.littrell@elliottdavis.com

Webinar Outline

• Federal financial resources for physician

practices affected by the coronavirus public health emergency

• Highlight compliance concerns associated with

the use of Payroll Protection Program Loans & Relief Fund Awards

• Review accounting & documentation processes
• Panel discussion with question & answer

session

Available Federal Coronavirus Financial Assistance Options

• Employment Retention Credit
• Delay of Payment of Employer Payroll Taxes
• Families First Coronavirus Response Act (FFCRA)
• Emergency Economic Injury Disaster Loans (EIDL)
• Accelerated Advanced Medicare Payment Program
• Paycheck Protection Program (PPP)
• Health & Human Services (HHS) CARES Act Provider Relief Fund

Employment Retention Credit

• Eligibility limited to practices whose gross receipts have dropped by 50% compared to average

gross receipts

• After gross receipts reach 80%, eligibility ends on the first day of the next quarter
• Refundable tax credit equal to 50% of all wages
• Maximum of $5,000 per employee
• Refunded by offsetting employer tax through payroll
• Qualified Wages:
• >100 employees: only employees who did not work due to suspended operations or lost revenue
• <100 employees: all employees

*Not available for PPP applicants

Delay of Payment of Employer Payroll Taxes

• Defer employer’s social security tax (6.2%)
• March 27-December 31, 2020
• Payment for taxes:
• 50% due on December 31, 2021
• Remaining 50% due by December 31, 2022
• To defer tax payments:
• Work with your payroll company for best course of action
• IRS will provide future instructions on how to report deferred payments

*New IRS Guidance: PPP eligible until lender forgives loan

Families First Coronavirus Response Act (FFCRA)

• Expanded paid sick leave (2 weeks) & expanded FMLA (12 weeks total, 2 unpaid plus 10

paid)

• U.S. Department of Labor permits employers to exclude healthcare providers or emergency

responders from expanded sick leave or expanded family leave.

• Healthcare provider includes “anyone employed at any doctor’s office”
• If expanded benefits are offered & paid, the following are reimbursable in whole or in part:
• Tax credits from Federal income taxes
• Social Security and Medicare taxes for employer & employee

*No PPP restrictions

Emergency Economic Injury Disaster Loans (EIDL)

• Repayable loan for businesses less than 500 employees and experiencing “substantial

economic injury” due to COVID-19

• Directions to apply through the Small Business Association (SBA)
• Up to $2 million with a maximum term of 30 years
• Interest rate: 3.75%
• Personal Guarantee not required if loan is less than $200,000
• $10,000 forgivable Emergency Loan Advance

*No PPP restrictions

Accelerated Advanced Medicare Payment Program

• Medicare Administrative Contractor (MAC) calculates payments based on 100% of Medicare

payments for prior 3-month period

• Provider submits claims as usual after issuance
• CMS begins collection 120 days after the date of issuance
• The recoupment will offset from new claims to repay advanced payment
• Apply directly on each individual MAC’s website

Paycheck Protection Program (PPP)

• Funds are currently exhausted, however, additional funding of $310 billion is waiting for

House approval.

• This loan is forgivable if you meet certain conditions
• Funds must be used over 8-week period
• All unforgiven amounts accrue interest at a 1% fixed rate and the loan is due in two years
• All payments are deferred for 6 months, interest will accrue during that period.
• To calculate loan amount: 2.5 x Average monthly “payroll costs”
• Any amount forgiven is not taxed

PPP continued

• You may spend PPP money in 4 categories:
• Payroll costs include:
• Wages
• Health insurance
• Retirement benefits
• State taxes
• Rent
• Mortgage Interest (if practice owns its building)
• Utilities

PPP Loan Forgiveness Reduction

• The Forgiveness Amount is reduced if there is a reduction in the number of employees:
• $$ forgiven x (FTE for 8-week period/ FTE Jan 1, 2020 through Feb 29, 2020)
• Reduction can be eliminated if FTEs/wages restored by June 30, 2020
• Or, a reduction of greater than 25% in wages paid to employees (making under $100k)
• SBA will only forgive 25% of loan proceeds used for non-payroll expenses
• Uncertainty continues over consequences of not using at least 75% of the loan proceeds on payroll

The Treasury Department has indicated an intent to clarify these rules through further guidelines.

Lender Request List

• IRS payroll tax forms:
• IRS Form 940
• IRS Form 941
• W-3
• Monthly health insurance invoices
• Employer contribution to retirement/401k

PPP Application Process & Calculating your Loan

Sample bank loan calculator:

PPP Record Keeping Considerations

• Keep a separate bank account
• Only make distributions or payments from the new account that directly tie to your payroll,

rent and utilities

• Create a budget and plan out the next 8 weeks of payroll costs, rent, and utilities
• To get maximum amount forgiven, use at least 75% of loan proceeds on payroll

Borrower Certifications

• Uncertainty of current economic conditions makes it necessary for the loan request to

support ongoing operations

• Loan proceeds will be used to: (a) retain workers and maintain payroll; or (b) to make

mortgage, lease, and utility payments

• Good faith standard

HHS CARES Act Provider Relief Fund Grant Program

• Public relations messaging:
• HHS Secretary Verma: “No strings attached.”
• HHS Announcement: “These are payments, not loans, and will not need to be repaid.”
• Terms & Conditions:
• Significant strings attached
• Clawback if all terms & conditions are not met
• Legal risks
• Attestation could be false claim
• Retention could violate reverse False Claims Act
• Up to $21,916/claim plus treble damages

Outline of Terms & Conditions

• Good standing with Medicare
• Use Restrictions:
• Expenses or losses reimbursed or reimbursable from “other sources”
• HHS has not said what that means
• Reporting
• Agree to any report & all documentation later developed by HHS
• Risk of agreeing to a future undefined event
• Documentation
• Maintain “appropriate” records & cost documentation

Attestation

• Attestation Form (as of 4/16/2020)
• No clarity on terms & conditions
• Clawbacks for non-compliance
• Adjustments possible
• Must provide HHS with “all information” related to disposition & use of funds
• Review process/mandatory participation
• HHS does not define review process
• What if you keep the money but fail to attest within 30 days?
• Implied attestation & acceptance of all terms & conditions

Possible Qualifying Expenses

• Overtime
• Remote work software & hardware, supplies, etc.
• Outside advisory fees
• Accountants
• Lawyers
• Consultants (IT, business)
• Additional PPE
• Additional cleaning costs to maintain safe work environment
• Signage/advertising; telehealth

Possible Lost Revenues Documentation

• Compare to budgeted revenue
• Compare to prior year’s revenue
• Increase baseline if prior 2020 revenues increased
• Should baseline be decreased if prior 2020 decrease?
• Consider the following:
• Cancelled patient visits
• Cancelled infusion visits

Accounting & Documentation Processes for Relief Grant

• Terms & conditions require all recipients maintain appropriate records & cost

documentation

• Robust accounting & documentation recommended to show HHS grant is used for purposes

that do not overlap with other programs, third party payor reimbursement or insurance proceeds

• Show your work
• List all assumptions

Outline of Future Report

• Future program instructions may require additional reports as HHS Secretary deems

necessary to ensure compliance with conditions imposed on this payment

• Submit to HHS Secretary & the Pandemic Response Accountability Committee a report:
• Total $ received under:
• The CARES Act
• Coronavirus Preparedness & Response Supplemental Act
• Families First Coronavirus Response Act
• Any other Act primarily making appropriations for coronavirus response & related activities
• Total $ expended or obligated for each project or activity
• Detailed list of projects or activities for which “large” covered funds were spent
• Estimated number of jobs created or retained

Panel Discussion: Practical Approaches to Uncertainties

• How do we reduce compliance risk?
• How do we prepare for appropriate accounting & documentation when rules are

still being written?

• Do we know what the reporting period is for qualified expenses or lost revenue

for the HHS grant?

• How do we navigate various attestations & certifications from various programs

administered by different agencies?

• How will agencies view a practice’s compliance efforts?

Questions?

• Submit your question to

Caitlyn in the Chat at the bottom right of your screen.

• The Moderator will read

the question aloud before the panel members begin responding.

Tim Hewson, J.D. Ray Waldrup Cody Paul, CPA James Willey, J.D. JJ Littrell, CPA

Want to Learn More?

Check out our website: www.americanrheum.com for more COVID19 resources. Follow us on LinkedIn & Twitter!

• @ColinEdgertonMD
• @RheumatologyRay

American Rheumatology Network (“ARN”) is a physician led and owned organization committed to improving healthcare by empowering independent rheumatology practices across the nation. Through our network physicians and practice administrators have access to best business practices, innovative practice performance technology, and value-based treatment pathways. Please visit our website at americanrheum.com for more information.

Thank you to UCB for sponsoring this webinar!