The novel coronavirus represents a threat to the modern world. The pandemic swept the country with fury and an economic stranglehold. For medical professionals and private practice owners, the pandemic’s disruption means to struggle and a sudden loss of revenue. Congress, however, passed the Coronavirus Aid, Relief and Economic Security (CARES) Act in late March, reports the American Hospital Association. The President signed it into law on March 27, 2020. The $2 trillion stimulus package will help struggling medical practices avoid bankruptcy in several key ways.
The biggest benefit to medical practices and health professionals under the CARES Act lies within the new loan opportunities. For example, loans are available through the Small Business Administration (SBA). This aspect of funding comes from the Act’s Paycheck Protection Program. In fact, applicants can apply online here. These loans target organizations with fewer than 500 employees in the hopes of avoiding economic collapse. The CARE Act makes “hospitals and health systems that do not also maintain a qualifying 501 (c)(3) status” ineligible. Thus, private practices that are not part of a larger health or hospital conglomerate may access funds more easily.
The funds under this program may pay for salaries and benefits to employees, as well as state and local taxes. Practices may pay rent, utilities, mortgage payments, and interest on existing debt as well. Borrowers also have the benefit of deferred payments on the loans for at least six months. Deferment may go as far as one year.
If borrowers retain employees or rehire employees by June 1, 2020, the SBA will forgive the loan.
Payroll Tax Delay Will Save Short-Term Revenue
All employers, except for those receiving funds under the Paycheck Protection Program, are eligible for the Payroll Tax Delay. This loan allows employers to defer the 6.2% FICA tax on wages paid below $137,700 in 2020 for nine months. With that in mind, all back payments during the period are due as follows:
- 50% on December 31, 2021.
- 50% on December 31, 2022.
Most importantly, this resource is available immediately. Those wishing to take advantage of it only, need not remit taxes to the government for the FICA tax.
Additional Business Loans for Larger Health Organizations Are Available.
Another portion of the stimulus created a fund of $500 billion for disbursement. These loans are not specific to medical practices either. The legislation, however, gives the power to grant and implement loans to organizations having between 500 and 10,000 employees. Unfortunately, they may be unavailable for individual practices.
Health and Human Services Funding for Health Providers Affected by COVID-19.
The legislation further created $100 billion in grants. They are through the U.S. Department of Health and Human Services (HHS). The approved grant terms include a broad list of eligible health providers as well.
The grants provide funding for expenses incurred that are ineligible for reimbursement, as well as the expenses from lost revenues. Such expenses might include added training for staff, PPE, and revenue lost from decreased patient visits. As a result, dentists and chiropractors may also apply for the grant when HHS releases official details.
Despite the early information, private practices that provide medically necessary service may apply. Those that must treat those people without insurance will benefit from the grant as well. As explained by Healthcare Dive, “HHS says some will go to help pay to treat the uninsured.”
How to Apply for Grants With HHS.
Interested medical professionals must follow a specific process for applying for COVID-19 relief grants through HHS. The COVID-19 grant application process remains the same as prior to the pandemic. However, reports indicate that officials will create a new portal in the coming weeks. For now, follow these steps:
- First, register with the Data Universal Numbering System.
- Second, register with the System for Award Management.
- Third, register with Grants.gov.
- Fourth, search and apply for available grants through the Grants.gov site.
What About the CDC and Funding Options for Private Practices?
Private practices that reside in COVID-19 hot zones and support COVID-19 treatment also have options. They may access funds through the Centers for Disease Control and Prevention (CDC). According to HHS.Gov, this new resource will provide $186 million in funding. Unlike other funding options, the CDC and HHS will reach out to organizations and jurisdictions to access initial funding.
The pandemic continues to cause disruption. It is vital to know your funding options. The immediate changes to the industry warrant imparting patient care through telehealth technology and avoiding the spread of the disease. If your organization needs help in implementing telehealth, an online patient portal, and an electronic health record software, PrognoCIS is here to help. Visit PrognoCIS online to learn more now.