May 2020 O&P Almanac

Page 26

COVER STORY

PATIENT CARE in a Pandemic

Accessing Grants and Loans

As O&P facilities grapple with the consequences of fewer patients and reduced revenues and profits, most firms are turning to grants and loans to keep their operations afloat. Fifty-eight percent of O&P patient-care facilities surveyed by AOPA in April said they had received a relief payment from the U.S. Department of Health and Human Services (HHS). HHS began releasing $30 billion of the $100 billion Public Health and Social Services Emergency Fund that is part of the CARES Act in late April. The payments, deposited directly in providers’ business accounts, are not loans and do not need to be repaid, but they did come with certain terms and conditions for acceptance and retention. 24

MAY 2020 | O&P ALMANAC

PHOTO: Getty Images/Tom Pennington

When the coronavirus pandemic began to wreak havoc on lives and businesses across the United States in March, AOPA found “very consistent language that clearly considers the continued operation of healthcare facilities as ‘essential’ services that are exempt.” The exemption “applies to both patients, who may continue to receive care from healthcare facilities, and employees, who may continue to work at these facilities,” the organization wrote in a statement on its website. But while O&P clinics have been deemed essential services in virtually all states where such decrees were issued, that doesn’t mean they’ve been employing standard operating procedures, says Barry Smith, a lawyer and longtime broker of O&P business sales. Social distancing—keeping everyone six feet apart and using appropriate protective gear—is the guiding principle. O&P facilities have adopted “what seems to be a universal policy—only one person can come [into the facility with] the patient at the most, and it’s better if the patient can come by themselves,” Smith explains. “Some clinics are rotating clinicians so that all clinicians are not there all days, so that if one clinician gets sick, maybe not all clinicians need to go into quarantine.” Many facilities have removed some chairs in their waiting rooms, “and they’re spaced six feet apart.”

CMS offered an additional source of relief in early April, expanding the Medicare Accelerated and Advanced Payment Program to increase cash flow for impacted providers. CMS temporarily revamped the program to include a larger number of Part A and Part B Medicare providers and to reduce the time frames for issuing payments from several weeks to approximately seven days. The updated program allowed eligible providers, such as those that had billed Medicare within the past 180 days and met other requirements, to request up to three months of expected Medicare payments to be made if their business operations had been impacted by COVID-19. While several O&P companies were able to take

advantage of these advanced payments, CMS announced in late April it was suspending the program for Medicare Part B providers, including O&P providers, and would no longer accept new applications for advanced payments for these providers. CMS announced in late April that another $20 billion allocated to Medicare providers in the CARES Act was set to be distributed in two ways—as an automatic distribution to Medicare providers who previously submitted cost reports, and in subsequent waves of distribution based on applications in a General Distribution Portal. Medicare providers that have already received a payment from the Provider Relief Fund are eligible to apply for additional funds by submitting data about their annual revenues and estimated COVID-19 related losses via the portal, accessible at https:// covid19.linkhealth.com/docusign/#/ step/1. While the relief payments and Medicare advanced payments were helpful to those able to access them, these funds did not go far enough in meeting shortfalls for most companies, so many are securing loans, says Tim Stoltz, CPA, CFP, MTAX, a partner at Bestgate Tax and Accounting Advisors in Frederick, Maryland. Stoltz, whose firm advises many O&P and medical practitioners, says his colleagues pivoted to a near-total focus on informing clients about federal assistance options and smart tax strategies in response to the pandemic’s devastating toll on business revenues. He and his colleagues encouraged all small businesses to apply for Paycheck Protection Program (PPP) loans, which he calls “the centerpiece” of the federal economic relief package for small businesses. Congress approved the PPP program in March, authorizing $349 billion in forgivable loans to small businesses to pay their employees during the COVID-19 crisis. The money ran out fast, as businesses flooded the government with requests for assistance. Congress added another $310 billion to the program in late April.