American College of Surgeons Advocacy Practice Protection Committee Financial Resources Available to Assist Surgeons
Provider Relief Funds from the Public Health and Social Services Emergency Fund
On September 10, 2021, HRSA announced the upcoming release of an additional $25.5 billion to aid practices and facilities feeling the ongoing effects of the COVID-19 Pandemic. This sum includes two funding opportunities. First, $17 billion as a "Phase 4 General Distribution" from the Provider Relief Fund (PRF) based on lost revenue or changes in operating expenses from July 1, 2020, to March 31, 2021. Second, $8.5 billion in American Rescue Plan Rural (ARP Rural) funding based on the amount of services provided to Medicaid, Medicare and CHIP patients who live in rural areas. Interested parties will be able to apply for both funding opportunities beginning on September 29, 2021, using a single streamlined application on the HRSA website. HRSA suggests that prior to applying, physicians search the Rural Health Grants Eligibility Analyzer to see which areas are designated as rural for purposes of the ARP Rural funds and begin gather necessary documentation to demonstrate lost revenues or additional practice costs for the second half of 2020 and the first quarter of 2021. Check the HRSA Future Payments page for additional information on requirements.
In addition, HRSA has also opened up a new period for reconsideration of Phase 3 PRF distributions along with detailed information on the methodology used to determine the payment amounts. The process and deadlines for requesting reconsideration are not yet available but will be posted on the HRSA PRF website when they have been finalized.
Provider Relief Funds can be used only for specified purposes and only in cases where the physician, facility or other provider meet the requirements of the program. Acceptance of funds (or failure to return funds within 15 days,) implies acceptance of the terms and agreements including reporting requirements with specified deadlines. Allowable expenses include money spent to prevent, prepare for, and respond to coronavirus. You can also use funds to offset revenues lost due to the coronavirus. You must adequately document that the funds were used for approved purposes. HHS continues to update the FAQs and the Terms & Conditions for these payments frequently as it has adapted to the challenges of implementation and announced additional funding opportunities and requirements. Updates to the reporting requirements were made most recently in June to reduce reporting burden, and a 60 day grace period for the first reporting period was announced in light of recent natural disasters and other factors causing difficulty with compliance. A summary of the June changes can be found here and information on the grace period and future updates can be found on the PRF Reporting Requirements and Auditing page.
Economic Injury Disaster Loans (EIDL)
On September 8, the SBA announced several changes to the EIDL that could benefit existing and future borrowers. The EIDL program "provides economic relief to small businesses and nonprofit organizations that are currently experiencing a temporary loss of revenue" in the form of low interest loans with favorable terms (see general information). The new changes increase the maximum loan amount for the EIDL from $500,000 to $2 million and increase the deferment period to 24 months. Other changes simplified the application process and increased flexibility on how loan proceeds can be used. The higher loan limits go into effect on October 8 and the other changes are effective immediately and in some cases are retroactive to existing borrowers. Those interested should review this information on the application process on the SBA website.
As part of the response to the ongoing health emergency, the program was expanded to provide rapid advance grants of up to $10,000 for businesses suffering financial losses. These advances were briefly discontinued but have since been expanded to up to $15,000 through the addition of a "Supplemental Targeted Advance" and designated for only the hardest hit businesses, Qualified applicants are those in low-income communities that can demonstrate at least 30% reduction in revenue (50% for the supplemental advance) and which have fewer than 300 employees (10 employees for the supplemental advance). The new targeted advances were initially opened only to prior applicants in low-income areas who had previously received grants between $1000 and $9000 and those who had prior applications rejected when funds ran out. Interested parties who think they may qualify should check the SBA website to see the current status of new applications.
Student Loan Relief
On August 6, 2021, President Biden issued a statement once again extending the relief on federal student loan payments, this time through January 31, 2022. The current relief applies to payments and interest accrual and prohibits debt collection on defaulted loans. Borrowers should contact their lender or loan servicer to see if they qualify. President Biden indicated in the statement that this would be the final extension of the relief on student loan repayment.
Some surgeons with student loans may also benefit from an extension of a tax credit for employers who make student loan payments on their employees' behalf. Under the provision, employers may receive a tax deduction for up to $5,250 per employee for such loan payments. This provision originally expired at the end of 2020 but has now been extended through the end of 2025. Surgeons with school loans are encouraged to ask their employers if they offer loan repayment benefits. We will update this section as additional relief or information becomes available.
Paycheck Protection Program (PPP)
The final Paycheck Protection Program extension ended on May 31, 2021. The Paycheck Protection Program was created in early 2020 in an effort to keep businesses solvent and workers on payroll. Loan funds used for the specified allowable purposes can be forgiven up to the full amount of the loan. Eligible expenses include payroll, mortgage interest, rent and utilities and under the terms of the new legislation, other operating costs, property damage from social disturbances not reimbursed through insurance, and the cost of PPE and efforts to protect employees from COVID-19. Borrowers are no longer required to deduct any EIDL Advances from their PPP loan forgiveness amount.
Check the SBA's PPP Loan Forgiveness page for terms, conditions and the application process for forgiveness of both First and Second Draw PPP loans.
PPP loan forgiveness rules have changed twice, first on June 5, 2020 with the enactment of the Paycheck Protection Program (PPP) Flexibility Act and subsequently with passage of the Consolidated Appropriations Act in December. Provisions of the law will relax rules for the PPP giving borrowers more time to spend funds received and to use those funds for a broader set of expenses while still qualifying to have all or a portion of the loan forgiven. Access information on SBA PPP loan forgiveness on their website and download the new streamlined form for those who received loans of less than $150,000. Due to the complexity of this program, Fellows should consider enlisting the services of their professional tax advisor if they have questions about their loan and the loan forgiveness rules.
The Consolidated Appropriations Act makes a number of favorable tax changes related to the PPP, clarifying that amounts forgiven under either an initial PPP distribution or a subsequent distribution will not be included in gross income for tax purposes. Further, the legislation states that no deduction shall be denied due to this exclusion from gross income. This reverses previous statements from the IRS indicating that business expenses paid with forgiven PPP funds would not qualify for deductions. The ACS continues to urge Fellows who received PPP loans or other assistance to consult with their accountant, tax professional or attorney.
Note: To increase transparency, the SBA and Treasury will continue to release information about borrowers who participate in the PPP. The names of recipients, the amounts they received (broken into ranges of dollar amounts received), and demographic data will be publicly disclosed on loans exceeding $150,000. It should be noted that personal identification information will be withheld.
Medicare Advance and Accelerated Payments
UPDATE: CMS has begun recovering Advance and Accelerated Payments requested due to the COVID-19 PHE.
If you applied for and received Advance or Accelerated Payments from Medicare during the COVID-19 PHE, CMS has likely already begun recovering those payments. Starting one year after the approval of your first requested advance, CMS will begin withholding 25 percent of Medicare payments. This recoupment will continue for an additional 11 months, at which time, if the full amount has not been repaid the withhold will increase to 50 percent for an additional six months. If the full amount still has not been recouped after the additional six months, CMS will send a demand letter for repayment and in 30 days will begin charging interest at a rate of 4 percent. Additional information on the recoupment process can be found on the CMS website or on this Medicare Learning Network factsheet.