Provider Relief Fund Updates
The Department of Health and Human Services (HHS) issued several announcements relating to the Provider Relief Fund over the past week, impacting two important deadlines for the program. Announced on May 22nd, recipients of the Provider Relief Fund now have 90 days to complete the attestation to accept the terms and conditions or return the funds. If a provider keeps the funds without completing the attestation, they will be deemed as having accepted the terms and conditions by HHS.
Providers seeking a second payment from the $50 billion general distribution of the Provider Relief Fund will have until June 3rd to submit revenue data to HHS. To receive a second payment, a provider must meet the following criteria:
- Have already received an initial payment from the Provider Relief Fund prior to April 24th
- Accept the terms and conditions of the first payment by completing an attestation
- Submit revenue data to HHS for the second payment through the General Distribution Portal. The portal will ask for the following:
- “Gross Receipts or Sales” or “Program Service Revenue” as submitted on its federal income tax return
- Estimated revenue losses in March 2020 and April 2020 due to COVID-19
- A copy of the most recent federal tax return
- A listing of the TINs for any subsidiary organizations that received relief funds but did not file separate tax returns
- Accept the terms and conditions of the second payment through the General Distribution Portal
Providers who do not submit their revenue information by June 3rd will no longer be eligible to receive potential additional funding from the $50 billion General Distribution. However, HHS does indicate the possibility of additional funding being available in the future. Those that have cases pending will not be impacted by the June 3rd cutoff date.
The HHS press release announcing the June 3rd deadline is available HERE.
The HHS press release concerning the attestation extension is available HERE.
Additionally, HHS has included new FAQs (added 5/19 – 5/21) providing guidance to organizations that have recently sold or acquired practices or have complex affiliations. HHS clarifies that HHS funds can be transferred from a parent organization to its subsidiaries and outlines situations where funds cannot be transferred from a previous owner to a new owner.
Can an organization that sold its only practice or facility under a change in ownership in 2019 and is no longer providing services, accept payment and transfer it to the new owner? (Added 5/19/2020)
No. A provider that sold its only practice or facility must reject the Provider Relief Fund payment because it cannot attest that it was providing diagnoses, testing, or care for individuals with possible or actual cases of COVID-19 on or after January 31, 2020, as required by the Terms and Conditions. Seller organizations should not transfer a payment received from HHS to another entity. If the current TIN owner has not yet received any payment from the Provider Relief Fund, it may still receive funds in other distributions.
Can a provider that purchased a TIN in 2019 accept a Provider Relief Fund payment from a previous owner and complete the attestation for the Terms and Conditions? (Added 5/19/2020)
No. The new TIN owner cannot accept the payment from another entity nor attest to the Terms and Conditions on behalf of the previous owner to retain the Provider Relief Fund payment. If the new TIN owner did not receive a direct payment under the General Distribution, it is not eligible to receive a payment under the General Distribution. However, the new TIN owner may still receive funds in other distributions.
The FAQs are available HERE.
Paycheck Protection Program Interim Rule
The Small Business Association issued two interim final rules to formalize guidance for the newly available loan forgiveness application, released last week. Much of the content duplicates information provided in the instructions of the application but the SBA did provide new and useful information for borrowers and lenders beginning the forgiveness process. Items of significance include the following:
- Owner-employees can count retirement plan expenses and health plan expenses in their payroll costs, but all these items in total are limited to the $100,000 salary cap.
- Lenders are responsible for rendering a decision on loan forgiveness and have 60 days from receipt of the application to report their decision to the SBA. The SBA, however, has the authority to reverse the forgiveness decision if they determine the borrower was ineligible to receive a PPP loan. Any balance due on a PPP loan must be repaid by the borrower on or before the two-year anniversary of when the loan was made.
- If the borrower has made payments on the loan before forgiveness is determined, the lender must return the excess amount to the borrower including accrued interest.
- The SBA provides examples on calculating reduced forgiveness amounts when a borrower encounters reduction in staffing levels and/or wage reductions.
- Borrowers who experienced lowered staffing levels during their PPP loan’s covered period will have their forgiveness reduced proportionately by the percentage in FTE reduction. For example – if a borrower reduced their headcount by 20% during the covered period then their forgiveness amount will also be reduced by 20%
- Borrowers who reduce salary or wages in excess of 25% of an employee’s base salary/wages between January 1st, 2020 and March 31st, 2020 will calculate the amount of wage reductions, in dollars, above the 25% safe harbor and subtract that number from the total forgiveness amount.
- A new set of safe harbors are put in place to protect borrowers from a reduction in FTE employees due to an employee’s actions, including when an employee is fired for cause, voluntarily resigns or voluntarily requests a reduction in hours. The SBA explains that borrowers do not need to reduce their FTE level calculations in these situations but will need to maintain records to demonstrate these circumstances in case the SBA should request them.
- Employers who offer to rehire employees but have their offers declined will need to report the employee’s refusal by filing a form with the state unemployment agency. However, the SBA has not yet shared which form will be required.
For further details on the interim rule, see Kaplan Financial Education’s blog HERE.
As always, ADVOCATE will continue to keep you informed on the issues impacting medical groups as they develop.
Manager, Regulatory Affairs