A. The first, $8.3 billion relief package, the Emergency Funding bill, provides aid to government health, and vaccine R&D. This package included:
- Payments for prevention efforts
- Quarantine costs
- Sanitization efforts
- Tracking of the virus
- $3 billion in vaccine research
- Payments to states through grant funding based on a population-based CDC formula
The second, $100 billion relief package, the
Families First Coronavirus Response Act, includes provisions for emergency paid leave for workers and free testing. This package included:
- Two weeks of paid leave for organizations with fewer than 500 employees
- $1 billion increased funding for food assistance programs
- Testing for COVID-19
- Waives all patient cost-sharing for COVID-19 tests
- Applies to Medicare, Medicaid, State Children’s Health Insurance Program (SCHIP), Tricare, Veterans Administration and Indian Health Services
- Medicare covers 100% of payment for COVID-19 tests
- Prohibits prior authorization for COVID-19 testing
- Medicaid eligibility to the uninsured for COVID-19 testing
- Increases federal matching funds for Medicaid program by 6.2%
The third, $2 trillion relief package, the
Coronavirus Aid, Relief and Economic Security (CARES) Act, provides more than $150 billion to the healthcare system, including $100 billion to hospitals, and includes these important measures:
- Suspends 2% sequestration reduction in Medicare payments, beginning May 1 and lasting through Dec. 31, 2020.
- Increases Medicare payments by 20% for coronavirus cases for discharges with principal or secondary diagnosis of COVID-19. The weighting factor for each diagnosis-related group will be increased by 20%. This increase will be for COVID-19 cases during the emergency period (beginning March 13 and ending when the national emergency is declared over).
- Provides accelerated payments through Medicare, periodic lump sum payments to hospitals up to 100% and for critical access hospitals up to 125% for a six-month period. This would be a loan allowed to be repaid twelve months from the date of first payment.
- Delays Medicaid Disproportionate Share Hospital payments from May 22, 2020 to Nov. 30, 2020.
- Provides cash flow for the financial impact from halting elective and non-urgent procedures.
- Provides businesses with 500 or fewer employees access to the Paycheck Protection Program, which assists with payroll costs, group healthcare benefits costs, insurance premiums, employee salaries and commissions, mortgage interest payments, rent, utilities and interest on existing debt. Receiving funds from the Provider Relief Fund does not prohibit a PPP loan, if the loan and relief funding are used for different purposes.
In addition to these loans, the CARES Act also includes several tax savings opportunities, including payroll tax credits and delays, AMT credits, net operating loss carryovers/carrybacks and tax-deductible charitable contributions.
Healthcare companies may also be eligible for payroll tax credits if they:
- Fully or partially suspend operation during any calendar quarter in 2020 due to orders from an appropriate governmental authority limiting commerce, travel, or group meetings (for commercial, social, religious, or other purposes) due to COVID-19; or
- Experience a significant decline in gross receipts during the calendar
If they meet these conditions, they may be eligible for a 50% credit on qualifying wages paid to employees on March 13 through Dec. 31, 2020. All employers are eligible to defer their social security tax liability due March 27 through the earlier of PPP loan forgiveness, if applicable, or December 31, 2020.
As of April 21, Congress was close to finalizing an additional stimulus package that would reportedly allocate $450 billion in funding, including about $350 billion for small business loan programs, $75 billion for hospitals and $25 billion for testing.
For more: Visit our insight on COVID-19 relief packages, here.