COVID-19 Resources: Upcoming Obligations and Deadlines
on November 24, 2020
By: Craig Douglas, Vice President of Payer and Member Relations
The COVID-19 pandemic has impacted all of us immensely in 2020, not only from a personal standpoint, but from a professional perspective as well. From the business side of things, many DMEPOS businesses saw a sharp decline in business due to patients and physicians alike canceling non-essential appointments and elective procedures that would have resulted in the need for DMEPOS items. Other providers saw their referral stream remain fairly steady or maybe even increase slightly. Providers who were located in COVID-19 hotspots and provide oxygen, ventilators, hospital beds, etc., all of which are key in treating COVID-19 patients in the home, likely saw an increase in referrals for those types of equipment, even while referrals for other types of equipment fell off for them. Regardless of where you fell along that spectrum, there were several government programs that have been created and rolled out this year to help businesses, including, and in some cases, especially for, healthcare providers.
While there were other programs as well, the main two programs were far and away the Paycheck Protection Program (PPP), and the HHS Provider Relief Fund (PRF). Now that the respective application windows have closed, and barring any new rounds of either program for which you can apply, you are either in the process of using those funds up or have fully used them up, and are now at a point where you need to start preparing your documentation which, if done properly, will mean you get to keep all of the money you received and not have to pay it back to the respective programs. Let’s explore what that looks like for each of the respective programs.
Paycheck Protection Program
To date, over 5.2 million businesses in the United States received PPP loans totaling more than $525B. If the recipients of the loans used the funds appropriately and as spelled out in the terms and conditions of the program, the funds can be converted to a grant that does not need to be paid back. Recipients of PPP funds had to use the funds to cover certain types of business expenses, and they had a set period of time in which the money was to be used, which was referred to as their “covered period” and ranged from 8 weeks to 24 weeks. During that covered period, they needed to keep track of the various expenses that the loan dollars were used to cover in order to prove compliance with the program. Most recipients have reached or will soon reach the end of their covered period. From the last day of their covered period, recipients have up to 10 months to go back to their lender and apply for loan forgiveness. To protect the financial health of their company, business owners must track these expenses carefully, and make sure they reach out to their lender with proper documentation of how the funds were used and within the 10 month window in order to have their forgiveness application processed and approved. Failure to do so could result in having to pay back the money received, plus 1% interest.
The forgiveness application has been made simpler in the past couple of months. While it may get simpler yet (there is no guarantee that will happen), and you do have 10 months from your covered period ending to complete the forgiveness application, there may be an increased incentive to get the forgiveness application done before the end of the year purely from a tax perspective. You can and should consult with your accountant as well as your lending institution to decide what is best for your business.
HHS Provider Relief Fund
Through the passage of multiple pieces of legislation, many healthcare providers qualified for and received a portion of $175B that was set aside to help them prevent, prepare for, and respond to COVID-19. Funds were distributed in multiple phases and targeted distributions. Depending on your provider type, you could be considered eligible for certain distributions but ineligible for others. This $175B allocation of monies to healthcare providers is commonly referred to as the HHS Provider Relief Fund (PRF). Much like the PPP, the monies received by providers through this program do not need to be paid back, assuming the dollars are used for approved expense types and according to the terms and conditions of the program.
As with the PPP, recipients of HHS PRF payments need to make sure they familiarize themselves with the terms and conditions associated with receiving and keeping those payments. Failure to do so could and likely will result in them needing to pay back the money they received. In addition to the standard terms and conditions, there are a few other very important things to keep in mind to protect the financial stability of your business:
- In order to keep the money that was received, it must be used up in full by June 30, 2021. Any unused dollars will need to be returned to HHS.
- Any provider that received over $10,000 in total payments through the HHS PRF is subject to reporting on how the dollars were utilized by their business. The reporting window will open for providers on January 15, 2021, and the deadline for the first report submission will be February 15, 2021. If the funds were used up entirely prior to that time, they will only need to submit that one report. If the money was not completely used, it will need to be used by June 30, 2021, and they will submit a 2nd and final report no later than July 31, 2021.
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