Final Analysis: COVID-19 Government Stimulus Packages

Published in Government Relations on October 20, 2021

Healthcare providers were presented with several economic stimulus programs to relieve some of the burdens brought on by the COVID-19 public health emergency (PHE). During a recent presentation, VGM’s Mark Higley, VP of Regulatory Affairs, and Craig Douglas, VP of Payer & Member Relations, have summarized these programs, what is required of providers to stay compliant, and the tax implications surrounding these programs. 

HHS Provider Relief Fund (PRF) and Updated Reporting Requirements 

Providers did not need to apply for this program to receive funds. Providers who received over $10,000 in funds must adhere to the reporting periods based on payment timeframes: 

  • Period 1:  
    • Funds received April 10-June 30, 2020  
    • Funds must be used up by June 30, 2021 
    • Reporting portal opened July 1, 2021 
    • Complete report by September 30, 2021 
  • Period 2:  
    • Received funds July 1-December 31, 2020 
    • Funds must be used up by December 31, 2021 
    • Reporting portal will open January 1, 2022 
    • Complete report by March 31, 2022 
  • Period 3:  
    • Funds received January 1-June 30, 2021 
    • Funds must be used up by June 30, 2022 
    • Reporting portal will open July 1, 2022 
    • Complete report by September 30, 2022  
  • Period 4:  
    • Funds received July 1-December 31, 2021 
    • Funds must be used up by December 31, 2022 
    • Reporting portal will open January 1, 2023 
    • Complete report by March 31, 2023 

Remember that PRF funds must be used to prevent, prepare for, and respond to coronavirus, and all expenses need to be supported by adequate documentation. Tax-wise, the payments received from the PRF are included in gross income for for-profit providers. Provider relief funds monies received are taxable unless the entity is not for profit. 

Resources: 

Medicare Advanced Payments 

The COVID-19 Accelerated or Advance Payment (CAAP) program was created as a result of the PHE, and providers had to apply to receive these funds.  

Repayment Requirements: 

  • Repayment begins one year from the payment issue date and continuing for 11 months, Medicare payments owed to providers will be recouped at 25%. 
  • After the 11 months end, Medicare payments owed to providers will be recouped at a rate of 50% for six months.  
  • After the six months end, a letter for any remaining balance of the payment(s) will be issued. If a provider doesn't satisfy that within 30 days, 4% interest begins to accrue

Resources: 

Economic Injury Disaster Loans (EIDL) Advance Payments 

Due to the PHE, the Small Business Association (SBA) added an advanced payment feature to loans, which did not have to be repaid. EIDL applicants can qualify for up to $15,000 without repayment, but eligibility criteria must be met. The Targeted EIDL Advance provides funding of up to $10,000 to eligible applicants, and the Supplemental Targeted Advance provides an additional payment of $5,000 to eligible applicants.

Resources: 

Payroll Protection Program (PPP) Taxation 

The CARES Act excludes the forgiveness of PPP loans from federal gross income and federal income tax. For providers who received payroll protection loans, those payments are exempt from federal income tax. 

State tax implications and expenses incurred: 

  • Forgiven loan amounts may be subject to state income taxation. 
  • In the several states that have “rolling conformity” to the IRC, these forgiven loans will likely not be subject to tax.  
  • Providers should know the status of their states’ conformity rules to plan accordingly. 
  • Congress approved the deductibility of covered expenses paid with PPP funds. So, when used for the appropriate expenses, those funds are deductible. 
  • Some states may deny the deduction or require income inclusion and allow the deduction. Visit https://taxfoundation.org/state-tax-forgiven-ppp-loans/ to find the latest information on their state rules. 
  • Taxpayers may consider filing extensions. 
  • Small business owners should talk with a tax adviser familiar with their state's tax laws before filing. 

New OSHA Requirements 

OSHA’s COVID-19 Emergency Temporary Standard (ETS) has appeared on the Federal Register website as an Interim Final Rule with request for comments. This ETS directs OSHA to reduce the risk for workers who are at risk of contracting COVID-19 in workplaces including healthcare facilities, DME suppliers, and home health agencies.  

What Providers Need to Keep in Mind: 

  • Implementation of these regulations and additional restrictions could vary by state.  
  • Providers must comply with these requirements.  

Resources: 

For any questions, please contact Craig Douglas at [email protected] or 319-290-3535 and Mark Higley at [email protected] or 319-504-9515.


TAGS

  1. covid-19
  2. osha
  3. paycheck protection program
  4. phe

From Our Experts

The PHE Is Over: What's Next? thumbnail The PHE Is Over: What's Next? In today's episode of Industry Matters, Mandi Joyner, Senior Director of Marketing at VGM & Associates, talks with three of VGM's payer, billing, and reimbursement experts Ronda Buhrmester, Dan Fedor, and Craig Douglas about the end of the Public Health Emergency (PHE) and what that means for members. Adam Miller and Tom Powers Attend Policy Forum in Washington D.C. thumbnail Adam Miller and Tom Powers Attend Policy Forum in Washington D.C. On Wednesday, May 10, the AOPA Policy Forum held in Washington D.C. brought together over 100 stakeholders, manufacturers, and practitioners in the field of orthotics and prosthetics (O&P). John Gallagher and Greg Packer Attend Successful Fly-In on Capitol Hill thumbnail John Gallagher and Greg Packer Attend Successful Fly-In on Capitol Hill On May 10, John Gallagher, VP of VGM Government Relations, and Greg Packer, President of U.S. Rehab, participated in the AAHomecare Fly-In event in Washington D.C. The purpose of their attendance was to discuss key industry issues with members of Congress and their staff. FAHCS Secures Major Victory for HME Industry in Florida thumbnail FAHCS Secures Major Victory for HME Industry in Florida FAHCS secures a significant victory for the HME industry in Florida with a 7.5% rate increase to Medicaid Fee Schedule. Washington Governor Signs SB 5218 to Remove Sales Tax From CRT Equipment thumbnail Washington Governor Signs SB 5218 to Remove Sales Tax From CRT Equipment On May 4 in Olympia, Washington, Governor Jay Inslee signed SB 5218 into effect. This bill exempts complex rehab technology (CRT) equipment from sales tax, making it more accessible and affordable for those in need of it. CMS Proposes New Rules to Strengthen Transparency and Access to Quality Care in Medicaid and CHIP Programs thumbnail CMS Proposes New Rules to Strengthen Transparency and Access to Quality Care in Medicaid and CHIP Programs CMS has released a two new proposed rules that look to strengthen transparency as well as access to quality care within the Medicaid and CHIP programs. One of the proposed rules is titled Ensuring Access to Medicaid Services and the other is Managed Care Access, Finance, and Quality. S. 1294, A Bill to Provide a 75/25 Blended Rate for Non-Rural, Non-CBA Supplier Has Been Introduced thumbnail S. 1294, A Bill to Provide a 75/25 Blended Rate for Non-Rural, Non-CBA Supplier Has Been Introduced S. 1294, a bill to provide a 75/25 blended rate for non-rural, non-CBA suppliers has been introduced. Now we ask that everyone reach out to their senators asking for their support of this crucial bill. Read more about the bill and see an easy way to reach out to your senators. Washington State Passes Bill Exempting Sales Tax on Complex Rehab Technology: A Testimony to the Power of Advocacy and Collaboration thumbnail Washington State Passes Bill Exempting Sales Tax on Complex Rehab Technology: A Testimony to the Power of Advocacy and Collaboration Congratulations to Don Whitney of Inland Medical and the PAMES state association, along with the entire state of Washington, on the recent passing of SB 5218.