Practices are rightly expressing concern about their ability to meet their financial obligations during this time of upheaval. While CAEPS cannot give you legal or accounting advice as your circumstances may be unique, the following information may be helpful in making decisions about what payments to prioritize and is provided for informational purposes
- CARES Act Provider Relief Funds.The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) included $100 billion in funds to provide direct relief for hospitals and other healthcare providers. According to the US Department of Health and Human Services (HHS), the Centers for Medicare and Medicaid Services (CMS) is beginning to distribute $30 billion of those funds. To be eligible to retain these funds, providers must agree not to "balance bill" patients, i.e., "not to seek collection of out-of-pocket payments from a COVID-19 patient that are greater than what the patient would have otherwise been required to pay if the care had been provided by an in-network provider."
Other requirements apply as outlined in these Terms and Conditions and in communications to be sent by CMS to each eligible provider. Members are urged to review these carefully as they decide whether they can meet all attestation requirements. The portal for making such attestations (due 30 days after receiving the funds) is open and linked to this webpage. Other reporting requirements apply to those who receive $150 thousand or more in funds.
Payments will be based on total Medicare Part B Fee-For-Service (FFS) Reimbursements for 2019 (i.e., excluding Medicare Advantage amounts). The amount can be estimated by multiplying total reimbursements by 6.2% (0.062), given there were $484 billion in total Part B FFS payments in 2019 and $30 billion in available funds. These will be made by Taxpayer Identification Number (meaning groups may receive payment for multiple providers) by direct deposit to those with such information on file (look for a payment from Optum Bank with "HHS-STIMULUS" of HHSPAYMENT" as the payment description). Others will receive a check sent to their normal payment address. These are being considered "payments, not loans, to health care providers and will not need to be repaid," [emphasis added], per the HHS announcement. Note that these payments are independent of those for the Medicare Accelerated and Advanced Payment Program (see below) and CARES Act related programs (such as the Paycheck Protection Program) which are loans.
The remaining $70 billion in funds will be distributed in the near future, with a focus on "providers in areas particularly impacted by the COVID-19 outbreak, rural providers, providers of services with lower shares of Medicare reimbursement or who predominantly serve the Medicaid population, and providers requesting reimbursement for the treatment of uninsured Americans," per HHS.
- Property Tax Delays/Penalty Waivers. The normal April 10th delinquency deadline to pay the usual second installment of July 2019-June 2020 Fiscal Year Property Taxes without penalties (the formal due date is February 1st) is looming, and some counties are offering delays or the potential to avoid fees and penalties.
CAEPS recognizes that many may have already paid these taxes or pay them as part of a mortgage payment arrangment. For those of you who have not or cannot make a timely free-standing payment, consider consulting your county website. This would includeverifyingany information below using the appropriate links, as changes may occur after publication of this advisory:
- Alameda - Possible Waivers
- Alpine - No Information on Possible Relief
- Amador - Possible Waivers
- Butte - No Information on Possible Relief
- Calaveras - No Information on Possible Relief
- Colusa - No Information on Possible Relief
- Contra Costa, Statement - Possible Waivers
- Del Norte - Possible Waivers
- El Dorado - Possible Waivers
- Fresno - No Information on Possible Relief (but does prominently offer link to "Request for Penalty Cancellation")
- Glenn - No Information on Possible Relief
- Humboldt - Possible Waivers
- Imperial, Press Release - Possible Waivers
- Inyo - Possible Waivers
- Kern - Extension until May 4th
- Kings, Statement - No Information on Possible Relief
- Lake, FAQ Statement - Possible Waivers
- Lassen - No Information on Possible Relief
- Los Angeles, FAQ Statement - Possible Waivers
- Madera - No Information on Possible Relief
- Marin - Possible Waivers
- Mariposa - No Information on Possible Relief
- Mendocino - Possible Waivers
- Merced - No Information on Possible Relief
- Modoc, Letter - Possible Waivers (Per statement to "work with taxpayers")
- Mono - Possible Waivers (Per "promise" to provide relief to taxpayers allowable under the law)
- Monterey, Press Release - Possible Waivers (Per "promise" to provide relief to taxpayers allowable under the law)
- Napa - Possible Waivers (based on promotion of Statement of California State Association of Counties)
- Nevada - Possible Waivers
- Orange - Possible Waivers
- Placer - Possible Waivers
- Plumas - Possible Waivers
- Riverside - Possible Waivers
- Sacramento - No Information on Possible Relief
- San Benito - Possible Waivers ("Delinquencies can be addressed individually")
- San Bernardino, Release - Possible Waivers
- San Diego - Possible Waivers
- San Francisco, Press Release - Extension until May 4th
- San Joaquin - No Information on Possible Relief
- San Luis Obispo - Possible Waivers
- San Mateo - Extension until May 4th
- Santa Barbara - Possible Waivers
- Santa Clara - Possible Waivers (also offers partial payments)
- Santa Cruz - Possible Waivers
- Shasta, Statement - Possible Waivers
- Sierra - No Information on Possible Relief
- Siskiyou - No Information on Possible Relief
- Solano, Statement - Possible Waivers
- Sonoma, Press Release - Possible Waivers
- Stanislaus - Possible Waivers
- Sutter, FAQ Statement - Possible Waivers
- Tehama - No Information on Possible Relief
- Trinity - No Information on Possible Relief
- Tulare - No Information on Possible Relief
- Tuolumne - Possible Waivers
- Ventura - Possible Waivers
- Yolo - Possible Waivers
- Yuba - No Information on Possible Relief
Accelerated and Advanced Payments Program for Medicare. Permits providers to receive up front 100 percent of their historical Medicare payment amounts for a three-month period. In addition, claims submitted in the interim will continue to be paid at normal rates. This is essentially an interest-free loan that will be recouped by Noridian from claims processed on or after 120 daysfrom the date of any accelerated payment. Any unpaid remainder would be due within 90 days once recoupment begins.
Applications (Updated Form) can be submitted to Noridian Healthcare Solutions, the Medical Administrative Contractor for the Jurisdiction that includes California, which is anticipated to issue the payments within seven days of the request. New: Noridian is offering webinars that address this issue. CMS has also made available a press release and a fact sheet describing the program, which, among other things, indicates that to qualify for the payments, the provider or supplier must:
- Have billed Medicare for claims within 180 days immediately prior to the date of signature on the provider's/ supplier's request form,
- Not be in bankruptcy,
- Not be under active medical review or program integrity investigation, and
- Not have any outstanding delinquent Medicare overpayments.
- Federal and State tax payments and returns for both 2019 (final) and 2020 (estimated) should be deferrable until July 15th.
- IRS Coronavirus Tax Relief
- Mortgages related to Fannie Mae or Freddie Mac may allow forbearance for up to 12 months.
- Absent further federal or state intervention, contact individual lenders, lessors, credit card companies, etc., to make individual arrangements.
- Explore City/County Based assistance programs (e.g., these for San Francisco and Los Angeles).
- Pre-existing or new (issued by September 27, 2020) non-disaster related SBA Loans (e.g., 7(a), 504, and microloans) will have all loan payments, interest, and fees covered by the SBA for six months.
- Special federal tax treatment is available when accessing up to $100,000 in retirement account assets related to a COVID-19 diagnosis or business interruption. Among other benefits, the 10-percent early withdrawal penalty is waived for withdrawals after January 1, 2020, and any incurred tax can be spread over three years. The funds can also be recontributed for 3-years. Plan administrators should have details.
- A refundable tax credit against qualifying Social Security taxes can be available to those whose operations were fully or partially suspended due to a COVID-19 government-mandated shut-down order, or who suffer a greater that 50% decline in revenue compared to the corresponding calendar quarter of the prior year. Note this is NOT available to an entity that obtains a PPP loan, and it is reduced by any payroll credit related to the Families First Coronavirus Response Act mandate to provide paid sick leave and paid family and medical leave. Consult your accountant or payroll service.
- In general, businesses may defer payment of most employer federal payroll taxes and half of self-employed tax liability imposed between the March 27 and December 31, 2020. Deferred amounts will be payable in two equal installments due by December 31, 2021 and December 31, 2022 respectively.Note that this deferral option is eliminated if you receive debt forgiveness under the Paycheck Protection Program and unrelated to the payroll tax credit related to mandated Paid Sick Leave under the Families First Coronavirus Act. Closely coordinate with your accountant or any commercial payroll service you might use to take advantage of this option.
A Pandemic Unemployment Assistance program has been established through December 31, 2020 to provide payment to those not traditionally eligible for unemployment benefits (self-employed, independent contractors, and others) who are unable to work as a result of the coronavirus public health emergency. As of this writing, no formal guidance regarding this has been provided about these new provisions on the website of the Employment Development Department, which manages Unemployment Insurance, so it isunclear if there will be an attempt to restrict this benefit. If you -- in consultation with your accountant, as appropriate -- believe you are eligible, it would be reasonable to apply. Unemployment Insurance payments are taxable income at the federal (but not California) level. Should you receive such benefits and desire federal tax withholding, you can submit Internal Revenue Form W-4V to the EDD.
- Other Tax Changes
- Loss limitations applicable to pass-through businesses and sole proprietors have been modified so excess business losses may limit taxes and permit preservation of cash flow.
- Prior Alternative Minimum Tax (AMT) credits can be recovered in an accelerated fashion permitting entities to claim a refund now and obtain additional cash flow during the COVID-19 emergency.
- Business interest expense allowances have been increased from 30 percent to 50 percent of taxable income (with appropriate adjustments) for 2019 and 2020, permitting increased liquidity through a reduced cost of capital.
- Qualified improvement property rule changes allow some facilities improvements to be written off immediately rather than be amortized over the life of a building (typically 39 years), with the potential to amend prior returns.
- Net Operating Losses (NOL) arising in a tax year beginning in 2018, 2019, or 2020 can now be carried back five years. The provision also temporarily removes the taxable income limitation to allow an NOL to fully offset income.
Some commercial business packages include business interruption insurance (note this link is meant to provide a general description of this type of insurance and may not reflect the specific terms of any coverage you may have). Such insurance may offer coverage for "interruption for civil or military authority." If part of your coverage, consult your insurance professional to assess any possible recovery.
Business Loans/Emergency Funding
Useful Business Loan Links
- US Chamber of Commerce Coronavirus Emergency Loan Small Business Guide and Checklist (Focuses on Payroll Protection Program)
- US Small Business Administration Disaster Assistance Loans (some "non-disaster," but compare terms to other credit you may have available).
- PAYCHECK PROTECTION LOAN APPLICATION WEBSITES
- 1st Century Bank - ACTIVE (Requires a business relationship)
- Bank of America - ACTIVE (Requires a Small Business lending and Small Business checking relationship as of February 15, 2020; or a Small Business checking account open no later than February 15, 2020 and not having have a business credit or borrowing relationship with another bank)
- Banc of California - ACTIVE (Contact "Relationship Manager" or PPP by Phone/Online Request)
- Bank of Marin - Pending (Has applied to be an approved SBA Lender, so may be several days)
- Bank of San Francisco - APPEARS ON HOLD (No longer invites inquiries to an email address; no indication of need for prior affiliation)
- Bank of the West - ACTIVE (Requires a pre-existing business checking account prior to February 15)
- Banner Bank - ACTIVE (Submit downloadable form by email; requires banking relationship)
- California Bank and Trust - ACTIVE (For current customers; Appears to Allow New Customers as outlined on "Application Checklist")
- CapitalOne - ACTIVE (Login to your business account and select the “Contact me” button when you receive the Paycheck Protection Program message to receive e-mail updates; unclear if this gives you any priority; requires a business banking relationship)
- Chase - ACTIVE (If you previously submitted basic information, log-in on the PPP webpage to complete application; Requires prior banking relationship an log-in; brief form will generate call back/contact from Banker)
- Citibank - ACTIVE (Updated Link; Only Citibank Small Business Customers).
- Citizens Business Bank - ACTIVE (Customers with a banking or lending relationship at Citizens Business Bank are eligible to apply; contact your Business Financial Center or the SBA Group at 866.465.4SBA.)
- City National Bank - ACTIVE (Contact Relationship Manager, so implies prior relationship)
- East West Bank- ACTIVE (Limited to existing clients with a business checking account for the specific business entity; contact bank directly)
- Epoch Lending - ACTIVE (Out-of State mortgage lender but accepting applications from the entire country; no prior relationship required.)
- NEW Kabbage - ACTIVE (No Prior Relationship Required)
- Live Oak Bank - ON HOLD FOR ADDITIONAL APPLICATIONS (Online bank operating nationwide; continues accepting contact information for interested applicants)
- Pacific Western Bank - ACTIVE (Contact your "Relationship Manager" to begin the application.)
- NEW PayPal - ACTIVE (No Prior Relationship Required)
- Silicon Valley Bank - ACTIVE (Appears limited to current clients)
- Sunwest Bank - ACTIVE (Allows New Customers)
- TD Bank - ACTIVE (requires a pre-existing business account relationship)
- Wells Fargo Bank - ACTIVE
- Torrey Pines Bank - ACTIVE (Appears to require banking relationship)
- Union Bank - ACTIVE [Link NOT ACTIVE, BUT PROCESS IS TO COMPLETE SBA FORM AND TAKE TO A BRANCH (per phone discussion with an agent)].
- US Bank - ACTIVE: Complete an Inquiry Form (if you haven't already) to be contacted for the full application.