Paycheck Protection Program Flexibility Act
Following the signing of the Paycheck Protection Program Flexibility Act, the Secretary of the Treasury and the Small Business Administration (SBA) made a joint statement on implementing the changes to the program.
The Treasury and SBA clarified that partial loan forgiveness will still be available with the amendments made to the PPP, a concern based on language within the bill that could be interpreted as saying borrowers would not be eligible for any forgiveness unless 60% of the PPP funds were spent on payroll. The joint statement explains that borrowers using less than 60% of the loan on payroll “will continue to be eligible for partial loan forgiveness, subject to at least 60 percent of the loan forgiveness amount having been used for payroll costs.”
Additionally, the statement clarified that only borrowers with loans awarded on or after June 5th will benefit from the extended loan maturity as outlined by the flex act which extends the repayment from 2 years to 5 years.
Lastly, the Treasury and SBA announced that there would be new guidance forthcoming on executing all the changes of the flex act which include updated borrower and forgiveness applications.
As a reminder, those interested in PPP loans will have until June 30th, 2020 to apply as the PPP flex act did not modify the end date to the program.
HHS Provider Relief Fund
Medicaid and CHIP providers will now be able to apply for a new round of funding available from the Health and Human Services (HHS) Provider Relief Fund. HHS expects to distribute $15 Billion towards providers who have yet to receive any payments from the program.
Although most groups receiving this communication will not qualify for this additional round of funding (due to having already received payments from the original $50 billion general distribution), we wanted to share this information on the newest development of the program.
In order to be eligible for the Medicaid targeted allocation, a provider must meet the following requirements:
- must not have received payment from the $50 billion General Distribution – even if the payment was rejected/returned to HHS. Providers who received payments from other targeted allocations (such as the rural or skilled nursing facility distributions) are still eligible to apply.
- must have provided patient care after January 31, 2020
- must have directly billed Medicaid or own a subsidiary that has billed Medicaid for healthcare-related services during the period of January 1, 2018, to December 31, 2019
- must have filed a federal income tax return for fiscal years 2017, 2018 or 2019 or be an entity exempt from the requirement to file a federal income tax return
- must not have permanently ceased providing patient care directly, or indirectly through included subsidiaries
- For individual applicants, have gross receipts or sales from providing patient care reported on Form 1040, Schedule C, Line 1, excluding income reported on a W-2 as a (statutory) employee.
Those eligible are required to submit revenue information through an enhanced General Distribution Portal by July 20th, 2020 in order to receive payment. HHS will distribute payments based on 2% of reported gross revenues of patient care as reported on tax documentation for CY 2017, or 2018, or 2019 submitted through the application process.
HHS released several new FAQs on 6/9/2020 which cover the new Medicaid targeted allocation, available HERE.
At this time, HHS has yet to release further guidance on the reporting requirements for recipients of the Provider Relief Fund.
Additional direction on both the Paycheck Protection Program and the HHS Provider Relief Fund is expected in the upcoming weeks. As always, ADVOCATE will continue to keep you informed on the issues impacting medical groups as they develop.
Manager, Regulatory Affairs