CARES Act Information - DoctorsManagement CARES Act Information - DoctorsManagement

Information on the CARES Act

March 30, 2020

by Sean Weiss, Partner & VP of Compliance

Here’s a summary for you:

“Yesterday  President Trump signed the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) into law.  As you know from the news over the past few days, this is an extensive piece of legislation that will significantly increase the amount of money being pumped into the economy for the benefit of small and midsized businesses. I’ve heard from many of you, and I know you’re facing big decisions about keeping or laying off your staff. The primary purpose of many of the provisions of the CARES Act are geared toward helping businesses keep and pay its employees during the COVID-19 pandemic, and the loans being made available through the SBA under the Paycheck Protection Program part of the CARES Act may be a viable option.

Here are some pertinent details about the PPP loans:

  • Maximum loan amount is the lesser of (i) $10MM and (ii) that amount which is equal to 2.5 times the borrower’s average payroll for the prior year (not counting compensation to employees exceeding $100k/year).
  • Maximum interest rate on the loan is 4% and a payback period of 10 years.
  • No personal guarantees or collateral required.
  • Loan proceeds must be used for payroll, rent, mortgage, utilities, and interest on existing debts.
  • Loans must be issued prior to July 1, 2020 (so time is of the essence).
  • Borrowers are eligible for loan forgiveness on the amount actually spent on qualifying uses (above) in the 8 weeks following the loan’s origination.
  • Loan forgiveness will be reduced by any reduction in employees retained compared to the prior year and by the reduction in pay of any employee beyond 25% of their prior year compensation (so you are motivated to keep as many employees as feasible).

If you are interested in pursuing a PPP loan, you should contact your lender of choice, to see if they are one of the many financial institutions offering these loans. They will be trying to figure out the mechanics as well, but the Small Business Administration will be providing them with expedited guidance and 100% guarantees on the funding they extend. Additionally, many of the prerequisites and conditions to obtaining a typical Section 7(a) SBA loan are being waived, so these applications should go from start to finish much quicker than we are used to with SBA loans.  I would advise contacting your lender as soon as possible, since they will be getting many, many requests for these types of loans.”

The PPP is basically the way to go. Make sure to work closely with your lender of choice. Just know the banks are still trying to figure out their process.

 

Sean M. Weiss is a Partner and serves as VP/Chief Compliance Officer for DoctorsManagement, LLC based in Knoxville, TN. DoctorsManagement, LLC services more than 20,000 clients nation-wide and has been in existence since 1956. Weiss serves as an Investigator and expert witness in Federal and State cases as well as an expert or lead in Administrative Law Judge Hearings. During his 25-year career, Weiss has engaged in more than 200 cases working with law firms and health systems across the country. Weiss serves as a third-party compliance and regulatory officer for more than a dozen health care organizations across the country of varying sizes. For more information on Sean M. Weiss or DoctorsManagement, LLC visit us online at www.doctors-management.com or contact us directly at 800.635.4040. You can also follow Sean on his biweekly Blog on LinkedIn (Sean M. Weiss “The Compliance Guy”) or at www.thecomplianceguyblog.com

What to do next…

  1. If you need help with an audit appeal or regulatory compliance concern, contact us at (800) 635-4040 or via email at info@drsmgmt.com.
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Why do thousands of providers trust DoctorsManagement to help improve their compliance programs and the health of their business?

Experienced compliance professionals. Our compliance services are structured by a chief compliance officer and supported by a team that includes physicians, attorneys and a team of experienced auditors. The team has many decades of combined experience helping protect the interests of physicians and the organizations they serve.

Quality of coders and auditors. Our US-based auditors receive ongoing training and support from our education division, NAMAS (National Alliance of Medical Auditing Specialists). All team members possess over 15 years of experience and hold both the Certified Professional Coder (CPC®) as well as the Certified Professional Medical Auditor (CPMA®) credentials.

Proprietary risk-assessment technology – our auditing team uses ComplianceRiskAnalyzer(CRA)®, a sophisticated analytics solution that assesses critical risk areas. It enables our auditors to precisely select encounters that pose the greatest risk of triggering an audit so that they can be reviewed and the risk can be mitigated.

Synergy – DoctorsManagement is a full-service healthcare consultancy firm. The many departments within our firm work together to help clients rise above the complexities faced by today’s healthcare professionals. As a result, you receive quality solutions from a team of individuals who are current on every aspect of the business of medicine.