No one is immune from the financial impact of COVID-19, and those in the health care industry have felt its effects more than most. As the pandemic continues, Congress has passed several bills offering financial relief to individuals and businesses, including health care providers. One of the most significant pieces of legislation is the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which was signed into law on March 27, 2020. The following is a summary of the CARES Act’s most notable provisions impacting health care businesses.

Emergency Relief Fund

The CARES Act earmarks $100 billion for reimbursement of “eligible health care providers” for healthcare-related expenses or lost revenues attributable to COVID-19. Eligible providers include “public entities, Medicare or Medicaid enrolled suppliers and providers,” and certain other entities “that provide diagnoses, testing, or care for individuals with possible or actual cases of COVID-19.” The funds, which are available through grants or other mechanisms, may be used to build temporary structures, lease properties, purchase medical supplies and equipment (including personal protective equipment and testing supplies), increase workforce and training, establish emergency operation centers, retrofit facilities and expand surge capacity.

On April 24, 2020, the Paycheck Protection Program and Health Care Enhancement Act was enacted, which, among other things, set aside another $75 billion in emergency relief for health care providers.

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Medicare Relief

The CARES Act also resulted in several changes to Medicare coverage and payment, including:

• Temporarily suspending, from May 1 through the end of 2020, Medicare “sequestration,” which ordinarily reduces payments to providers by 2%.
• Increasing reimbursement by 20% for Medicare patients diagnosed with COVID-19 who are discharged during the emergency declaration period.
• Significantly expanding the availability of accelerated and advance Medicare payments during the emergency period. These payments are now available to certain non-hospital providers impacted by COVID-19, including skilled nursing facilities.
• Temporarily relaxing post-acute care eligibility rules and helping acute care hospitals increase their capacity to treat COVID-19 patients by transferring patients to alternative care settings. For example, during the emergency period, the Act:
  • Waives the “three-hour rule,” which ordinarily requires Medicare beneficiaries in inpatient rehabilitation facilities to receive at least three hours of intensive rehabilitation at least five days per week;
  • Allows long-term care hospitals (LTCHs) to treat a greater percentage of less-intensive patients without jeopardizing their designation; and
  • Suspends the site-neutral payment rate for LTCHs.

The Act also relaxes certain restrictions on reimbursement for telehealth services. We will discuss these provisions in greater detail in a future article.

General Business Relief

The CARES Act provides financial assistance and tax relief for smaller businesses, including medical practices and other health care providers. This includes loans under the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan (EIDL) program, as well as payroll tax deferral and employee retention tax credits for businesses impacted by the COVID-19 pandemic.

These are just a few examples of the many benefits for health care providers and other businesses under the CARES Act. We urge you to contact us to discuss how the CARES Act affects your business, and the steps you should take to ensure that you receive the benefits to which you are entitled.

For more information about financial and other assistance available to health care providers, please contact Kelly Buchheit at [email protected]. Visit ORBA.com to learn more about our Health Care Group.