Details, deadlines and how to qualify for the payment.
UPDATE: The due date for the application to Health and Human Services has been extended to September 13, 2020.
As we enter the fifth month of a pandemic, dental practices and other small businesses are attempting to adapt in this ever-changing climate. With the passing of the CARES Act, most of the attention was drawn to Paycheck Protection Program (PPP) loans and bolstered unemployment that helped practices maintain cash flow while state mandates required practices to be closed. Now that most are reopening, the government’s stimulus approach to healthcare seems to be evolving.
Initially not afforded to the dental industry, one of the sections of the CARES Act provided $175 billion in relief funds allocated to the Department of Health & Human Services (HHS) designed to help stimulate hospitals, health care providers and front-line workers combat the virus.
For the past few months, the American Dental Association (ADA) and the American Association of Orthodontists (AAO) have been lobbying for the HHS stimulus funds to be available for dental practices. With a small victory in June, this was expanded to Medicaid/CHIP dental providers. With continued efforts put forth by the ADA and AAO, this is now open to all dental providers as of July 10.
DETAILS AND REIMBURSEMENT
This is neither a loan nor a grant, rather a payment made to the practice up to 2% of the most recently filed tax return revenue. It is important to note that this payment will be considered taxable income to the practice.
The intention behind this stimulus payment is to reimburse the practice for expenses related to prevent, prepare for and respond to coronavirus, including but not limited to:
- 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;
- Acquiring additional resources, including facilities, equipment, supplies, healthcare practices, staffing and technology to expand or preserve care delivery.
The other purpose of this stimulus is to reimburse practices for “lost revenues that are attributable to coronavirus,” meaning any revenue that you as a healthcare provider lost due to coronavirus.
Practice owners will be able to use the funds to replace a decline in revenue for March and April of 2020 compared to March and April of 2019, or as if COVID had not occurred.
With most dental practices losing out on 6-8 weeks of production, this additional funding will help in revenue recovery and ease the cash flow constraints that practices are feeling as PPP funds are starting to be spent down. This can allow for practices to continue to adapt and invest in additional personal protective equipment (PPE) and other infrastructure changes required to help ensure the safety of patients and staff members in this new environment.
The average dental practice that collects approximately $1,500,000 could expect to receive a payment of $30,000 to spend on the items mentioned above. With PPP funds nearly spent for most practices, this can also be used to cover payroll expenses as well.
As of July 10, the HHS website has updated their application process to allow for all dental practices to apply for this additional stimulus until September 13. Applicants will need to create a profile or log into a portal hosted by Optum/United Health Care.
As applicants work through the process, ensure you have the following:
- Tax ID Number
- Most recently filed corporate tax return to report revenues (default is 2018 unless 2019 has already been filed)
- NPI numbers that the practice files claims under
Applicants will have the opportunity to elect to have a check sent via mail or the proceeds wired to an account. If you have already applied under the Provider Relief Fund, regardless if you accepted the money or not, you are not entitled to additional funds.
If your practice tax ID number is not initially recognized, it is suggested applicants call (866) 569-3522 and/or continue to check back in as HHS will be updating their curated provider list.
ATTESTATION AND REGULATION
There are stipulations attached to the acceptance of these funds. The applicant will be required to certify to the adherence of the regulations of the stimulus package and agree to not use the funds to cover expenses that have otherwise been covered by the PPP & EIDL loans.
After receiving the funds, you must confirm both the receipt and amount of the funds and agree to the terms and conditions set forth by HHS pursuant to the CARES Act (see CWA summary of terms). Additionally, there will be future required reporting which has not been finalized by HHS.
CWA recommends our clients apply for this stimulus immediately as many would meet the requirements of using the funds to treat actual or possible COVID-19 patients. They also are able to spend this payment on in-office supplies utilized through the remainder of the calendar year. Applicants will need to be comfortable with the terms and conditions to create a strategy on spending the money.
The landscape of the CARES Act continues to change and through lobbying efforts by leading dental organizations, allowing practices to continue to operate safely and start to establish more sustainable cash flows.