DENTISTS NOW ELIGIBLE FOR CARES ACT PROVIDER RELIEF FUND

Jul 14, 2020

DENTISTS NOW ELIGIBLE FOR CARES ACT PROVIDER RELIEF FUND

The CARES Act, which passed on March 27, allocated $175 billion to a Provider Relief Fund meant to aid doctors on the front lines of COVID-19.  On June 9, HHS announced that it would allocate $15 billion of the Provider Relief Fund to Medicaid and CHIP providers.  Now, thanks to some serious lobbying efforts by the ADA, the program has been opened to dentists, regardless of whether or not they participate in Medicaid.

We recommend that you take advantage of this program – if you are comfortable with the public disclosure of annual practice revenue (more to come on this).

For example, If you meet some basic eligibility tests, you will receive a grant equal to 2% of your annual practice revenue.  If your annual practice revenue is $1,000,000, then your payment will be $20,000.  The catch is that you have to submit your application by July 24.

Here is a series of frequently asked questions relating to the opening of this program to dentists.

APPLICATION

To be eligible, you must meet all of the following six criteria:

  1. Must not have received payment from the initial $50 billion Medicare-focused General Distribution;
  2. Must not have received payment from the $15 billion Medicaid and CHIP Distribution;
  3. Must have either (i)  filed a federal income tax return for fiscal years 2017, 2018 or 2019 or (ii) be an entity exempt from the requirement to file a federal income tax return and have no beneficial owner that is required to file a federal income tax return. (e.g., a state-owned hospital or healthcare clinic); and
  4. Must have provided patient dental care after January 31, 2020; and
  5. Must not have permanently ceased providing patient dental care directly, or indirectly through included subsidiaries; and
  6. If the applicant is an individual, have gross receipts or sales from providing patient dental care reported on Form 1040, Schedule C, Line 1, excluding income reported on a W-2 as a (statutory) employee.

The application is made online using this portal.

 

The first step in the application process is to establish an Optum ID, or Pin, which will be your connection to the portal.  Optum is a subsidiary of United Healthcare Group (UHG), which HHS has partnered with to collect provider data and to distribute government funds.  The government knows it would be too inefficient and under-resourced to oversee this program.

UHG says that to the extent you are providing private information like your email address and practice revenue, it will only use it in connection with the Provider Relief Fund.  If you have privacy concerns, that’s understandable, but, personally, we’d get over that and would apply for the 2% grant – unless the public disclosure (discussed later) is too big of an issue for you.

The funds are being distributed on a rolling basis and should be available within about a month after applying.  The payment will be made by electronic bank transfer (“ACH”) or if you prefer, by check.  Since the ACH transfer is more secure, we would opt for that.

After you establish your PIN, you will have to upload your tax return and other information.  Specifically, you will need the following:

  1. Your most recent federal tax return (2017, 2018 or 2019);
  2. First-quarter 2020 Form 941 or Form 940 Annual Federal Unemployment Tax Return,
  3. HHS’s FTE Worksheet (part of the application)
  4. HHS’s Gross Revenue Worksheet if required by Field 15 (part of the application)

ATTESTATION

Within 90 days after receiving payment, you will have to attest to a series of “Terms and Conditions” found here.

Here is a recap of the relevant Terms and Conditions:

  • The recipient certifies that it provides or provided after January 31, 2020 diagnoses, testing, or care for individuals with possible [emphasis added] or actual cases of COVID-19;
  • The recipient is not currently excluded from participation in Medicare, Medicaid, and other Federal health care programs; and does not currently have Medicare billing privileges revoked;
  • The recipient certifies that the payment will only be used to prevent, prepare for, and respond to coronavirus, and that the payment shall reimburse the recipient only for healthcare-related expenses or lost revenues that are attributable to coronavirus.
  • The recipient certifies that it will not use the payment to reimburse expenses or losses that have been reimbursed from other sources or that other sources are obligated to reimburse.
  • The recipient consents to the Department of Health and Human Services publicly disclosing the payment that recipient may receive from the Relief Fund [emphasis added]. The recipient acknowledges that such disclosure may allow some third parties to estimate the recipient’s gross receipts or sales, program service revenue, or other equivalent information.

Each of these points should be acceptable, with the possible exception of the last one.  If, within 90 days following the receipt of the payment, you don’t affirmatively attest to the Terms and Conditions, then you will be deemed to have accepted them.

The first attestation point above says that you will treat confirmed COVID-19 patients or patients who possibly have the virus.  In a lengthy 54-page FAQ found here at the bottom of page 6, HHS states that it “broadly views every patient as a possible case of COVID-19.”

(By the way, that 54-page FAQ is very comprehensive and will answer most any question you or your CPA will have about this program.)

The sticking point that many will have is the public disclosure.  This is indeed unfortunate.  If you receive a $20,000 payment, it won’t be hard to extrapolate that your annual practice income is $1,000,000.

For your information, here is where you can search who has received a payment and how large their payment is.

If you don’t want to accept the Terms and Conditions, you can reject the funds during the attestation period.  But, not returning the money within 90 days and not accepting the Terms and Conditions will be deemed acceptance of them.

HOW TO USE THE FUNDS

The Terms and Conditions state that the payments can only be used to “prevent, prepare for, and respond to coronavirus and shall reimburse the recipient only for healthcare-related expenses or lost revenues [emphasis added] that are attributable to coronavirus.”  According the FAQ at the bottom of page 8, the phrase “healthcare-related expenses attributable to coronavirus” is broad and covers a range of items and services purchased to prevent, prepare for, and respond to coronavirus, including:

  • supplies used to provide healthcare services for possible or actual COVID-19 patients;
  • equipment used to provide healthcare services for possible or actual COVID-19 patients;
  • workforce training;
  • developing and staffing emergency operation centers;
  • reporting COVID-19 test results to federal, state, or local governments;
  • building or constructing temporary structures to expand capacity for COVID-19 patient care or to provide healthcare services to non-COVID-19 patients in a separate area from where COVID-19 patients are being treated;
  • acquiring additional resources, including facilities, equipment, supplies, healthcare practices, staffing, and technology to expand or preserve care delivery.

If you aren’t spending money on these things, then you can use the funds to replace “lost revenues that are attributable to coronavirus.”  This means any revenue that you as a healthcare provider lost due to coronavirus. This may include revenue losses associated with fewer outpatient visits, canceled elective procedures or services, or increased uncompensated care.  This is a low bar considering that practices were shut down by government fiat resulting in fewer patient visits, canceled elective procedures, etc.

One last point – this payment will be taxable income.  We don’t yet know whether the IRS will view this like it views a forgiven PPP loan, where the expenses that the grant is used to pay are non-deductible.  That remains an open point, though we remain cautiously optimistic that this will be resolved in both cases in taxpayers’ favor.

DOWNLOAD HHS INSTRUCTIONS HERE

Collier & Associates, Inc. will update our blog as the CARES Act progresses. We take pride in continuing to keep our subscribers and website visitors updated on current events during this extraordinary time.

We will work diligently to answer general inquiries via our website if time permits and in a little more detail within our Newsletters. However, if your questions are detailed in nature, please request to set up a conference call for a formal legal consultation. Thank you.

DISCLOSURE

Collier & Associates, Inc. provides this information as a service to clients and other friends for educational purposes only. It should not be construed or relied on as legal advice or to create a lawyer-client relationship. Readers should not act on this information without seeking advice from professional advisors.

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