Last Updated: May 17th, 4:20 pm: If you’ve applied for the loan under the Paycheck Protection Program of the CARES Act, then it is time to look into what other Coronavirus relief measures are in place for your physician practice.

I will continue to update this post as new information becomes available or I detect errors here.

CARES Act Provider Relief Fund: Part 1

CARES Act Provider Relief Fund: Part 2

HHS Stimulus Grant Amount

Total payment amount from HHS General Distribution (including both Parts 1 and Part 2) amount to 2% of a practice’s Net Revenue in 2018.

Since Total revenue of Medicare facilities and providers for 2018 was $2.5 Trillion and the General Distribution Fund is $50 Billion, a provider should expect to receive (Total Revenue in 2018/$2.5 Trillion x $50 Billion) in Expected Combined General Distribution.

Hence, Part 2 payment will be the difference between this amount and what was received as Part 1 HHS Stimulus grant.

Here is a public list of practices that have received HHS Stimulus grants here.

Medicare Advance Payments

Update: As of April 26, 2020, CMS is not taking any new applications for the Advance Payment program. It is unclear whether there will be additional funding available to resume this program at a later date.

CARES Act dictates that CMS provide accelerated and Advance Payments to any physician during this national emergency who meets the following criteria:

Details of the program:

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Medical Malpractice Premiums

My Medical Malpractice insurer is sending out frequent emails with relief measures. Initially, they allowed a 9 month delay of premium payment to help with current cash flows. Today they introduced a discount on the next three renewals for a policyholder depending on the decrease in your billings compared to prior.

Ask your malpractice agent for any reprieve your insurance company is giving. Or visit your carrier’s website for details.

Employee Retention Tax Credit

This is a small business tax provision under the CARES Act applicable only if you have NOT applied for the Small Business Interruption Loan under the Paycheck Protection Program. So read on if you are one of those.

A business who applies for tax credit under FFCRA may use the Employee Retention Credit, too- but NOT for the same wages.

Many physician practices will meet eligibility since many of them are only doing televisits (partially suspended operations) and/or are likely to meet criteria for significant decline in gross receipts due to severe drop in patient volume.

Deferral of Employer Payroll Taxes

Employers who participate in the Paycheck Protection Program Loans are eligible to defer payment of Payroll Taxes until such time as they receive funding from the PPP loan. They may defer taxes and repay them as per the deadlines above. Once the PPP loan funds hit their account, they may not defer payroll taxes any more.

Expanded Unemployment Assistance

The CARES Act expands on available Unemployment benefits from states and makes them available to workers usually excluded from Unemployment Assistance. There are several programs under the umbrella of Expanded Unemployment Benefits and differ from state to state depending on how each state chooses to implement the CARES Act.

Please check the Department of Labor’s overview and FAQs of Unemployment Insurance Relief During COVID-19 Outbreak here.

Retirement Plan Changes under CARES Act

Retirement Plan Distributions

Retirement Plan Loans

You may choose to take out a loan from your 401(k) as well as a distribution- each to a maximum of $100,000. Some people are using these funds for real estate investments. It is not my cup of tea- I like to keep things simple.

I think, that unless absolutely necessary, it is best to not raid your Retirement Plans through distributions or loans. And it should not become absolutely necessary- that’s what Emergency funds are for. Here are some reasons why:

Cash Balance Plans

For employers who have Cash Balance Plans as part of their group retirement benefits, you may choose to lower the credit formula for your plan or freeze it altogether for the current duration and then unfreeze it when things look better.

This is a good option for those who are experiencing decreased revenues (most of us) and the cash flow to put into the CBP may have dried up.

It also lets us not have to make extra large contributions to make up for market losses.

The plan will need to be amended to make these changes and that will be an additional cost. Talk to your Retirement Advisor and TPA for advice for your own situation.

Required Minimum Distributions

Student Loan Assistance

Recovery Rebate Checks

Facebook Small Business Grants

Facebook is stepping up with grants to small businesses in the form of cash and advertising credits. They are spending $100 million on grants to up to 30,000 small businesses across 30 countries they have a presence in. So the likelihood of getting a grant is pretty small. They are going to decide who to give the grants to based on the community impact of your business.

References:

Thank you for reading. Thoughts? Comments?

5 Responses

  1. So question…what about those of us those of us who are employed physicians? What do we qualify for? Especially with salaries cut (20-50%)….

    1. Hi Reshma, unfortunately, not much. Expanded unemployment benefits (which is little comfort), changes to retirement plans (not very advisable unless in dire straits). Student loan assistance from employer is a good one, though. Individual stimulus checks for trainees, low-income or part-time physicians. Malpractice premium reduction/deferral- if you pay for it yourself (which you probably don’t, as an employee). Once again, entrepreneurship and business ownership has been rewarded.

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