American College Of Surgeons - Inspiring Quality: Highest Standards, Better Outcomes

Federal and State Regulatory and Legislative Issues

ACS Practice Protection Committee

The ACS Practice Protection Committee has been formed to address issues of economic viability that surgical practices are facing as a result of the extraordinary demands placed on them during the COVID-19 pandemic. This workgroup will be ongoing and active to help Fellows with the economic challenges that lie ahead as the situation evolves. With the assistance of ACS staff in the Washington office, the workgroup has put together a resource document specifically targeted at the various options available to provide a rapid infusion of operating capital into surgical practices.

Financial Support Options for Surgeons

Recently, a series of actions have been taken by the Federal government to reduce the financial stress caused by the response to COVID-19. These include easier access to small business loans (including to individuals who would not have previously been eligible), loan forgiveness, advances on anticipated Medicare payments, and deferrals on certain loan and tax payments.

These programs have overlapping eligibility and differing requirements, so figuring out which ones apply or are best for your specific situation can seem daunting. However, these programs are meant to help businesses, including physician practices, stay afloat during this unique, time limited crisis, and are therefore designed to be as streamlined as possible with expedited decisions on whether you qualify. The resources provided here are for informational purposes, please confer with your accountant or tax advisor before taking any action.

To determine which program or programs may suit your situation, there are several questions to consider:

  1. Is a large portion of your practice’s income derived from Medicare?
    If so, you may want to take advantage of the Medicare Advance payments announced by CMS. However, be aware that Medicare will begin to withhold payments later in the year to balance the advance paid against your charges for services billed in the future.
  2. How much help do you or your practice need?
    Economic Injury Disaster Loans can provide up to $2 million, while Paycheck Protection Program (PPP) loans can provide 2.5 times your monthly payroll costs, up to $10 million. Medicare advance payments are based on previous Medicare billed charges.
  3. How quickly do you need to receive funds?
    Economic Injury Disaster Loans or Medicare Advance payments may be a good fit for those in need of a quick capital infusion to keep their practice viable.
  4. Are you trying to avoid furloughs or layoffs, or would you consider recalling furloughed staff before 30 June?
    The PPP is intended to help small businesses and keep them from laying off employees or reducing wages. The PPP may even apply to non-profits, sole proprietorships and independent contractors. These loans may also be fully or partially forgiven if used it to maintain staffing levels and salaries or to rehire furloughed employees during the crisis.

The government websites provided below have been improved, are updated frequently with regards to content, and have been found to be “user friendly” and intuitive.

Medicare Advance Payments Program

The Centers for Medicare and Medicare Services (CMS) recently expanded the Accelerated and Advance Payments Program. Surgeons and others may request advanced Medicare payments to address cash flow issues based on historical payments. You may request up to 3 months of Medicare payments by sending a request form directly to your MAC. These forms vary and will be found on your MAC’s website. To qualify, you must have billed Medicare for claims within 180 days and you may not be in bankruptcy, under active medical review or program integrity investigation, or have any outstanding delinquent Medicare overpayments. MACs have been directed to process requests within 7 days.

These payments are essentially an interest free loan against future Medicare claims. Applicants who receive advance payments will continue to bill and receive payments normally for 120 days, after that, all billed claims will automatically be used to offset their advance payment balance. The entire balance must be repaid within 210 days of when it was received.

More information about this program can be found here.

Economic Injury Disaster Loans

Among the provisions included in the Coronavirus Aid, Relief, and Economic Security (CARES) Act was a significant shoring up of resources and expanding of availability of loans via the Small Business Administration (SBA). One of these is the Economic Injury Disaster Loan program.

The SBA’s Economic Injury Disaster Loan program provides small businesses with working capital loans of up to $2 million that can provide vital economic support designed to help overcome the temporary loss of revenue. In response to the COVID-19 pandemic, small business owners in all 50 states, Washington DC, and U.S. territories are eligible to apply. Note that these loans may have favorable terms, but they are not forgiven.

Fellows may learn more about Economic Injury Disaster Loans and apply here.

This program is administered through the Small Business Administration.

This is an article describing one entrepreneur’s experience in applying for an Economic Injury Disaster Loan.

The Paycheck Protection Program

The Paycheck Protection Program or PPP is an expedited loan program intended to help businesses keep their doors open and their staff on payroll. If used for the allowed purposes such as payroll, mortgage interest, rent or utilities, up to the full amount may be forgiven.

According to recent SBA guidance, starting April 3, 2020, small businesses and sole proprietorships can apply. Starting April 10, 2020, independent contractors and self-employed individuals can apply. The SBA encourages eligible entities to apply as quickly as possible due to the funding cap.

The application for the PPP will be submitted through your local SBA affiliated bank or financial institution, but regardless of where you apply you are likely to be asked for the following documentation. Having this information ready will expedite the process:

  • 2019 IRS tax documents such as quarterly 940, 941 or 944 payroll tax reports.
  • The most recent 12 months of payroll information including gross wages for all employees and officers, paid time off, vacation pay, FMLA, and State and local tax information.
  • 2019 IRS form 1099s for any independent contractors that would otherwise be considered an employee.
  • Health insurance premiums cost for you and your employees (the portion paid for by the proprietor)
  • Cost of company funded contributions to retirement plans such as 401K or IRA plans.

Application form

More information about the Paycheck Protection Program may be found here.

Information specific to the PPP and non-profit 501(c)3 organizations can be found here.

Help for Those with Student Loans

Those with student loans may be eligible for relief, particularly if their loans are held by the federal government. More information from the Department of Education can be found here.

Additional Tax Help for Those Trying to Retain Employees

Surgeons may also have questions related to the tax provisions from recent congressional activity related to the pandemic. For specifics, we urge you to contact you tax professional or financial advisor.

There are certain tax provisions intended to help ease the burden of the COVID-19 crisis on small businesses. The Treasury Department and the Internal Revenue Service have launched an Employee Retention Credit, designed to encourage businesses to keep employees on their payroll. The refundable tax credit is 50% of up to $10,000 in wages paid by an eligible employer whose business has been financially impacted by COVID-19. More information can be found on the IRS website.

Employers may also be able to defer the Social Security portion their payroll taxes that would have been due for the 2020 tax year to 2021 and 2022. The first half of employer payroll taxes must be remitted by December 31, 2021, and the remaining amount is due by December 31, 2022. More information can be found here.

Again, we urge you to contact your tax professional for specific advice, especially since some of the tax provisions may be mutually exclusive with the PPP.

COVID-19 State Government Resources and Engagement

Fellows and members of the American College of Surgeons (ACS) who want to know how their state governments and local chapters are responding to the COVID-19 pandemic can learn more here. This page provides links to websites that summarize state actions; the American Medical Association’s state advocacy center, with topics of interest including costs for testing, access to care, and telehealth, expanding Medicaid coverage, enforcement of existing responsibilities, workers’ compensation, and liability; information from the National Governors Association website; details about the status of individual state legislatures; use of SurgeonsVoice; and a list of state health departments and state health officials. Updates on ACS state chapter activities also are provided.