Home Health & Hospice Week

Critical: Know which ones require repayment, and which ones don’t.

Home health and hospice agencies struggling financially under the COVID-19 quarantine and pandemic — or expecting to — now have new funding available from three distinct federal resources.

Payments and loans from the Coronavirus Aid, Relief, and Economic Security (CARES) Act Paycheck Protection Program (PPP) administered by the Small Business Administration, the CARES Act Provider Relief fund, and Medicare’s expanded Accelerated Payment program may all be very welcome by HHAs and hospices, but they are not the same, finance experts warn.

“Money is coming from three pots,” explains finance expert Dave Macke with VonLehman & Co. in Fort Wright, Kentucky. The requirements and procedures for each type of funding vary, and “managing all this cash is going to be a challenge,” Macke cautions.

Compare the three types of funding:

1. CARES Act Paycheck Protection Program (PPP) administered by the SBA.

Repayment required: No, as long as you meet certain conditions including keeping all employees on the payroll for eight weeks after the loan (or quickly rehiring) and using the funds for payroll, rent, mortgage interest, or utilities.Partial payments may be required.

Who’s eligible: Small business with 500 or fewer employees, or that meet certain other requirements.

Amount available per provider: 2.5 times a company’s monthly payroll (you must submit documentation of the payroll expenses).

Total amount available: $349 billion, but indicators are positive that Congress will increase the amount in the next COVID-19 stimulus legislation.

Application required: Yes, companies can apply through any existing SBA 7(a) lender or through any federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating, of which there are more than 1,800.“Other regulated lenders will be available to make these loans once they are approved and enrolled in the program,” the SBA says. Applications don’t include typical SBA requirements, such as proving inability to find financing from another source.

Timeline: The program has gotten off to a slow start, with approved lenders overwhelmed with applications and not-yet-approved lenders cooling their heels. At press time, the SBA reported having approved more than 1 million loans through 4,664 lenders as of April 13.

Additional documentation required: Yes, you must show you meet the employment requirements and spent the money on eligible expenses.

Repayment schedule: If you don’t meet loan forgiveness requirements, you must repay the loan within two years at a fixed rate of 1 percent. Payments are deferred the first six months, although interest still accrues.

More information: Details of the PPP program are at https://home.treasury.gov/policy-issues/cares/assistance-for-small-businesses.

2. CARES Act Provider Relief.

Repayment required: No, as long as you meet reporting requirements (see story, p. 103).

Who’s eligible: Health care providers that received Medicare fee-for-service funds in 2019.

Amount available per provider: Your percentage of total Medicare FFS reimbursements in 2019. (To calculate, divide your 2019 FFS revenues by the total, $484 billion, and multiply by the amount available, $30 billion.)

Total amount available: $30 billion, with another $70 billion in relief coming to “targeted” groups such as rural providers and areas particularly impacted by the pandemic.

Timeline: Funding came through quickly for most providers, within days of the program’s April 7 announcement.

Application required: No, the Department of Health and Human Services deposited the funds automatically in most providers’ bank accounts starting April 10.

Additional documentation required: Yes, you must submit a report to HHS detailing how you spent the funds or lost revenue.

Repayment schedule: None, if you satisfy reporting requirements.

More information: Details of the CARES Act Provider Relief Fund program are at www.hhs.gov/provider-relief/index.html.

3. Expanded Accelerated and Advance Payment program.

Repayment required: Yes.

Who’s eligible: Health care providers that have billed Medicare for claims in the last 180 days; aren’t in bankruptcy; aren’t under active medical review or program integrity investigation, and don’t have outstanding delinquent Medicare overpayments.

Amount available per provider: Equal to Medicare FFS payments in the three-month period from October to December 2019.

Total amount available: No cap announced.

Application required: Yes, a simple, brief (usually one-page) form specific to your HHH Medicare Administrative Contractor.

Timeline: MACs should be taking four to six days to approve and release payments, as opposed to the usual three to four weeks for regular accelerated payment requests, the Centers for Medicare & Medicaid Services says.

Additional documentation required: No, usual Medicare reporting applies.

Repayment schedule: Providers have 210 days from the date of the accelerated or advance payment was made to repay the balance, with recoupments starting after day 120.

More information: Details of the expansion are at www.cms.gov/files/document/Accelerated-and-Advanced-Payments-Fact-Sheet.pdf.