AMARILLO, TX – In a much-anticipated, and often in doubt move, Congress finally gave us another stimulus package to discuss here. Many of the details that Medtrade Monday readers will be most interested in are yet to come, so expect a more in-depth analysis of items like the expanded Payroll Protection Program in weeks to come, but for now we summarize the key provisions at a high level and with a basic understanding that, much like all of the COVID legislation discussed in the past, there will be lots of new information to come. The key provisions relevant to the largest part of our audience follow.
On December 21, 2020, Congress passed this legislation as part of a larger spending deal. The votes in both the Senate and House overwhelmingly supported the passage of the legislation. After much political wrangling for a week plus over the amount of the individual direct payments, President Trump finally signed the bill into law on December 27, 2020. Congress continues to negotiate additional direct individual payments as of the time this article is being authored.
Clarification on Tax Treatment of PPP Loans
Congress clarified its intent that forgiven PPP loans would not be treated as taxable income and that all expenditures made with PPP funds will continue to be deductible consistent with current tax rules. These provisions were made necessary by the May 2020 guidance from the Department of Treasury indicating that all expenditures made using PPP funds would be treated as non-deductible expenses. The deductibility of these expenses and tax treatment of PPP loans applies not only to prior loans but also those loans made possible by the new stimulus package, as detailed below. Similar tax treatment for other programs under the CARES Act is included, though applicability to Provider Relief Fund (“PRF”) grants remains in question.
Provider Relief Fund Reporting
The new legislation adds an additional $3 billion to the PRF and provides new flexibility in reporting requirements. The included changes in permitted revenue loss calculations, which we will explore in detail in follow-up articles, introduce significant doubt about the current PRF reporting methodology and timelines currently required by HHS. We are awaiting HHS clarification on the many questions that need to be answered in this area.
Additional Round of PPP Loans
An important part of the new stimulus package includes an additional $284 billion in funding for another round of forgivable PPP loans. Small business owners will be able to apply for this second round regardless of whether their entity received funding in the first round of PPP loans offered. Basic eligibility requirements are a 25% decrease in revenue in any one quarter of 2020 compared to 2019. Other important program changes include a requirement of less than 300 employees. Loans will be capped at $2 million and will be calculated in a manner similar to the first round, at 2.5 times average monthly payroll. Forgiveness requirements will also be similar and detailed in follow-up articles but there will be simplified forgiveness processes for loans under $150,000. Additional details will be provided once the SBA has the opportunity to issue its legislatively required guidance.
Individual Stimulus Checks
The current law provides for $600 individual payments for all eligible adults along with $600 per qualifying child age 16 years and younger. The amount of the checks begin to decrease at an adjusted gross income of $75,000 for individuals and $150,000 for those filing jointly. There is some indication that these checks will begin going out immediately and may be in process by the time you read this article. As mentioned above, Congress is currently working to pass stand-alone legislation providing larger individual payment checks.
Federal Unemployment Benefits
The CARES Act provided for $600 per week unemployment benefits in addition to those benefits unemployed individuals were entitled to receive under their state programs. That funding lapsed at the end of July but an executive order provided for $300 weekly benefits through the end of 2020. The most recent stimulus package provides for an additional 11 weeks of $300 weekly federal unemployment benefits.
Medicare Payment Changes
The package provides for a one-time 3.75% increase in the Medicare Physician Fee Schedule for 2021 (and only 2021). This amount adjusts the effects of the fee schedule budget neutrality rules and provides additional assistance by way of payment to physicians and other clinics. Further, the law extends the suspension of the sequestration for Medicare fee-for-service payments for an additional three months, through March 31, 2021. The CARES Act had previously suspended the 2% reduction for fiscal year 2020 only.
Obviously, this new stimulus package is a welcome shot in the arm to the US economy and meets at least a portion of the current need for COVID legislation. There is still a lot to learn and we will continue to provide updates as possible. There is also an expectation that President-elect Biden will push additional legislation as his first action as President later this month. After 2020, all we can do is buckle up and be ready for another interesting ride. After all, we made it through 2020, right…???
AAHOMECARE’S EDUCATIONAL WEBINAR
How to Properly Utilize Telehealth to Provide Cost-Effective Services
Presented by: Jeffrey S. Baird, Esq., Brown & Fortunato, P.C.
Tuesday, January 19, 2021
1:30-2:30 p.m. CENTRAL TIME
Over the past several years, telehealth has methodically become a part of health care. The pandemic changed this. The pandemic has shoved telehealth to the forefront and the law is quickly adapting to give telehealth a much more prominent place in health care. Many restrictions have been lifted during the pandemic…and a number of these restrictions will remain lifted after the pandemic. This program will discuss federal and state laws governing telehealth during the pandemic and the expected changes in the law after the pandemic is over. Specifically for the DME supplier, this program will discuss whether Medicare will pay the supplier for a product when (i) the physician’s order results from a telehealth encounter, (ii) the patient lives in a non-rural area, and (iii) the patient has the telehealth encounter from his home. The program will then change directions and discuss how the DME supplier can utilize video technology to (i) provide required services to patients, (ii) provide “value-added” services to patients, and (iii) educate patients, caregivers and physicians regarding the array of products and services offered by the supplier.
Jeffrey S. Baird, JD, is Chairman of the Health Care Group at Brown & Fortunato, PC, a law firm with a national health care practice based in Texas. He represents pharmacies, infusion companies, HME companies, manufacturers and other health care providers throughout the United States. Mr. Baird is Board Certified in Health Law by the Texas Board of Legal Specialization and can be reached at (806) 345-6320 or firstname.lastname@example.org.
Kelly T. Custer, JD, is an attorney with the Health Care Group at Brown & Fortunato, PC, a law firm with a national health care practice based in Texas. He represents pharmacies, infusion companies, HME companies and other health care providers throughout the United States. Mr. Custer can be reached at (806) 345-6343 or email@example.com.