April 3rd Newsletter

April 3, 2020

Federal Updates 

Treasury Releases Paycheck Protection Program (PPP) Interim Final Rule

On April 3rd, the Department of the Treasury announced the implementation of sections 1102 and 1106 of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). Section 1102 of the Act temporarily adds a new Small Business Administration program, the Paycheck Protection Program, with $349 billion in available funding. If used for qualifying expenses (payroll, rent, etc.), up to the full amount of the loan may be forgiven. PPP will offer loans of up to $10 million per business. Key aspects of the rule include:

  • All businesses with 500 or fewer employees can apply for loans, including nonprofits, veterans’ organizations, Tribal business concerns, sole proprietorships, self-employed individuals, and independent contractors.
  • Loans will be forgiven so long as the proceeds are used to cover payroll costs, and qualifying mortgage interest, rent, and utility costs. Payroll levels must be maintained, but forgiveness is capped at $100,000 per employee on an annualized basis. Full-time employee headcount must also be maintained.
  • Loan amounts will be for up to two months of average monthly payroll costs plus an additional 25% of that amount. Interest rates for all loans are set at 1%. Loan payments will be deferred for six months, but interest will continue to accrue over that period. The non-forgiven loan amount is due within two years.
  • Businesses that receive an Economic Injury Disaster Loan (EIDL) are also eligible to apply for PPP loans. However, if the EIDL loan was used for payroll costs, the PPP loan must be used to refinance the EIDL loan. If used for other costs, it does not affect PPP eligibility, although the PPP and EIDL loans must be used for different purposes. Any proceeds from a forgiven EIDL advance will be deducted from forgiveness available under PPP. See below for more details on EIDL loans.
  • Interested parties can apply through any eligible SBA lender or through any federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating in the PPP.
  • Small businesses and sole proprietorships can apply starting today (April 3rd). Independent contractors and self-employed individuals can apply for loans through existing SBA lenders beginning April 10th. Applications must be submitted by June 20th.

The interim final rule is available here, and the PPP Borrower Application Form is available here.

 

Other CARES Act Loans and Grants

As a reminder, the CARES Act also established $100 billion in emergency grants to hospitals and other for-profit or not-for-profit entities that provide care for COVID-19 patients through the Public Health and Social Services Emergency Fund. Entities must apply individually for funds under this program using their TIN and a statement of need, and HHS will distribute funds on a rolling basis, so providers should prepare to apply as soon as possible. Additional guidance is expected at any time.

As described above, the CARES Act also expanded the SBA’s long-standing EIDL program, which was originally created to assist businesses, renters, and homeowners located in regions affected by declared disasters. EIDL loans are available directly from the SBA. CARES Act guidance provided for an additional $10 billion to expand the program. Eligible entities may apply for an EIDL here. Key features include:

  • Similar to the PPP, businesses with fewer than 500 employees can apply for loans.
  • The maximum EIDL is a $2 million working capital loan at a 2.7% interest rate for non-profits and a 3.75% interest rate for businesses with up to a 30-year term. Payments are deferred for one year.
  • Up to $200,000 can be approved without a personal guarantee, and approval can be based on a credit score. No collateral is required for loans of $25,000 or less.
  • Eligible applicants for an EIDL can receive a $10,000 emergency grant within three days of application. There is no obligation to repay the grant.

 

CMS Extends MIPS Submission Deadline

On April 3rd, the Centers for Medicare and Medicaid Services (CMS) announced that the Merit-based Incentive Payment System (MIPS) data submission deadline will be extended to April 30th at 8 pm. CMS will also reopen the MIPS extreme and uncontrollable circumstances application for individuals, groups, and virtual groups. Applications submitted by April 30th will override any previous data submission.

More information is available here.

 

CMS Issues Additional COVID-19 Guidance for LTCFs

On April 2nd, CMS and the Centers for Disease Control and Prevention (CDC) released new recommendations for state and local governments and long-term care facilities (LTCFs) in response to the COVID-19 public health emergency. As LTFCs have seen increasingly greater numbers of COVID-19 cases among residents, the agencies have updated the original March 13th guidance with new recommendations, including but not limited to:

  • Ensuring compliance with all CMS and CDC guidance related to infection control;
  • Urging state and local leaders to consider the needs of LTCFs with respect to supplies of PPE and COVID-19 tests;
  • Implementing symptom screening for all staff, residents, and visitors;
  • Ensuring appropriate PPE use; and,
  • Using separate staffing teams and facilities for COVID-19 negative residents, COVID-19 positive residents, and unknown status residents.

The updated guidance is available here.

 

CMS Releases 3rd Set of COVID-19 FAQs

On April 2nd, CMS released the third set of COVID-19 Frequently Asked Questions (FAQs). The newest FAQ covers:

  • Emergency preparedness and response;
  • Eligibility and enrollment flexibilities;
  • Benefit flexibilities;
  • Cost-sharing flexibilities;
  • Financing flexibilities;
  • Workforce flexibilities;
  • Fair hearing flexibilities;
  • COVID-19 T-MSIS Coding Guidance; and,
  • Other miscellaneous topics.

Additional questions and requests to CMS’s dedicated COVID-19 mailbox at MedicaidCOVID19@cms.hhs.gov. The FAQ is available here.

 

FCC Issues Report and Order on Emergency $200 Million COVID-19 Telehealth Program

On April 2nd, the Federal Communications Commission (FCC) released the report and order on the COVID-19 Telehealth Program, which was established by the CARES Act to provide up to $1 million each to eligible health care providers nationwide to purchase telecommunications, information services, and connected devices for the purposes of facilitating telehealth. Although this is an extension of the existing Rural Health Care (RHC) program, providers do not need to be located in a rural location. Eligible providers include not-for-profit hospitals, medical schools and colleges, Federally Qualified Health Centers (FQHCs), community mental health centers, local health departments, rural health clinics, skilled nursing facilities (SNFs), or collaborations of the above types of agencies. Applicants must identify the kind of services and devices they intend to purchase, but once awarded, may purchase additional eligible equipment without modifying. FCC will start accepting applications once the Office of Management and Budget (OMB) accepts the Report and Order, which is expected shortly.

The document also establishes a $100 million Connected Care Pilot Program which will distribute funds to providers over three years explore how to best extend telehealth and other connected care services to low-income Americans and veterans.

The Report and Order is available here.

 

N95 Respirator Extended Use, Re-Use and Decontamination Guidelines

Given the national shortage of fitted N95 respirators, the CDC recently issued updated pandemic-related guidance on best practices for extended use and re-use to maintain supplies. The guidance can be found here.

Independent groups, such as the COVID-19 Healthcare Coalition, have been evaluating and recommending decontamination methods in emergency contexts for N95 respirators. The Coalition study can be found here.

 

State Updates

Governor Cuomo Announces Updates on Hospital Beds, Upcoming Executive Order to Address Ventilator Shortages

Today (April 3rd), Governor Cuomo held a press conference during which he announced that the temporary hospital at the Javits Center will be converted to a hospital for COVID-19 patients only. This change will add 2,500 beds to the current capacity for COVID-19 cases. The Governor also addressed continuing issues obtaining a sufficient supply of ventilators, and announced that he will be issuing an Executive Order allowing the State to take ventilators and personal protective equipment (PPE) from hospitals who have an adequate supply and redistribute it to hospitals in need. The Governor emphasized that such equipment will either be returned to those hospitals, or they will be reimbursed for it.

 

Approved SFY 2021 NYS Budget Authorizes Raising Up to $11B in Short-Term Bonds and Credit

The Governor also briefly discussed the New York State Fiscal Year 2021 Enacted Budget, which was finalized and released yesterday. SPG will release a full summary of the budget over the weekend, but initial COVID-19-related provisions of the budget are outlined below:

State Revenue

  • The Budget authorizes the State, through Dormitory Authority and Urban Development Corporation, to issue up to $8 billion in short-term bonds to raise funds necessary to replace quarterly taxes postponed due to COVID-19 and to establish lines of credit of up to $3 billion to cover state expenses temporarily. These facilities would mature in one year, but could be rolled over and refinanced in future years, without regard to debt limits in existing law.
  • To adjust for COVID-19-related expenses, the Budget Director will review the budget during three periods of one month, two months, and six months, respectively, starting April 1st. The Director will be empowered to propose adjustments to appropriations during each period in order to balance the budget due to COVID-19 effects. The legislature will have the ability to approve a different plan, but if they do not, the Executive plan will go into effect.
  • The Budget Director will have the authority to review and approve an allocation plan for any disbursement of federal aid received in response to COVID-19.
  • The EFLA bill allows for an immediate transfer of $250 million to “any funds or accounts” needed to maintain “essential governmental operations” that have been impacted by executive orders or other responses to COVID-19.
  • The budget establishes the Public Health Emergency Charitable Gifts Fund, in which the State would be able to receive donations related to a public health emergency (i.e., COVID-19).

Providers and Payers

  • The Budget enacts the Emergency or Disaster Treatment Protection Act, which grants health care facilities, professionals, and volunteer organizations immunity from criminal or civil liability for actions that occur in the course of providing health care services during the COVID-19 emergency, unless due to intentional misconduct or gross negligence. The waiver is not strictly limited to COVID-19 treatment.
    • “Facilities” include Article 28, 31, and 16 licensed programs or any other facility authorized by a COVID-19 emergency rule.
    • “Professionals” include physicians, physician extenders, pharmacists, nurses, midwives, psychologists, social workers, other mental health practitioners, respiratory therapists, clinical laboratory workers, nursing attendants or certified nursing aides, emergency medical technicians, home care services workers, administrators and executives, and any other person authorized by a COVID-19 emergency rule.
  • Insurers will not be permitted on retrospective review to deny claims for emergency department and inpatient services related to COVID-19 treatment during the emergency.

Other

  • $1.2 billion is appropriated for elementary and secondary schools through the Education Stabilization Fund, to be funded with federal aid through the CARES Act.

The New York State FY 2021 Budget can be found here.