Coronavirus Aid, Relief, and Economic Security (CARES) Act: What You Need To Know
On March 27, the Coronavirus Aid, Relief, and Economic Security (CARES) Act—the third coronavirus relief package—was enacted into law. The legislation includes a number of provisions to support physicians and provide relief for small businesses, including physician practices. Key provisions include:
- A new loan program for small businesses, with loan forgiveness opportunities, to assist with payroll, utility payments, and other overhead costs
- Opportunities for direct financial support for hospitals, physician practices, and others to cover unreimbursed health care related expenses or lost revenues attributable to the public health emergency
- Liability protections for volunteer physicians during the COVID-19 emergency
- Coverage of COVID-19 in vitro diagnostic products without cost sharing
The CARES Act is a significant step forward in addressing the national public health crisis caused by COVID-19, but much remains to be done to fully address the impacts of the pandemic on physicians, patients, and the health care system. ACOG continues to advocate for you, your practices, and your patients with Congress and the Administration. We are working tirelessly to ensure that any future federal action prioritizes the necessary support, resources, and tools physicians need to stay safe and healthy, keep your practices afloat, and continue to provide exceptional patient-centered care.
The summary below contains information on key provisions related to physician practice and the provision of care in the wake of COVID-19, but is not an exhaustive list of elements that may affect the health care system and employers.
Support for Physicians and Physician Practices
Small businesses and nonprofits with up to 500 employees, including physician practices, can apply for loans of up to $10 million.
Allowable uses include payroll support, paid sick or medical leave, insurance premiums, mortgage, rent, and utility payments.
The covered loan period is February 15, 2020 to June 30, 2020. Loan forgiveness is available on a sliding scale based on employee retention on December 31, 2020, with up to 100% loan forgiveness available for those with employee retention rates of 100%. Also allows for complete deferment of loan payments for 6-12 months, a maximum term of 10 years, and a maximum interest rate of 4%.
Eligible businesses must have been operational on February 15, 2020 and had employees to whom it paid salaries and payroll taxes or paid an independent contractor. Businesses must not be receiving other funds for the same uses from another Small Business Administration (SBA) program, but may have outstanding SBA loans for other purposes.
Small businesses and other select entities suffering substantial economic injury are eligible for an Economic Injury Disaster Loan (EIDL) related to COVID-19.
EIDLs are lower interest loans of up to $2 million, with principal and interest deferment available for up to four years that are available to pay for expenses that could have been met had the disaster not occurred, including payroll and other operating expenses.
EIDLs provide an emergency advance, that does not need to be repaid, of up to $10,000 to small businesses and private non-profits harmed by COVID-19 within three days of applying for an SBA Economic Injury Disaster Loan.
To provide immediate relief to small businesses with certain non-disaster Small Business Administration (SBA) loans. SBA will cover all loan payments on these SBA loans, including principal, interest, and fees, for six months. Also available to new borrowers who take out loans within six months of enactment of the CARES Act.
Provides a refundable payroll tax credit for 50% of wages paid during the COVID-19 emergency. This applies if an employer's operations were suspended partially or fully as a result of a shut-down order or gross receipts declined by more than 50% compared to the same quarter the year prior.
For employers with greater than 100 full-time employees, qualified wages are wages paid to employees when they are not providing services due to the COVID-19-related circumstances described above. For eligible employers with 100 or fewer full-time employees, all employee wages qualify for the credit, whether the employer is open for business or subject to a shut-down order.
The credit is provided for an employee's first $10,000 of compensation, including health benefits, and is applicable for wages paid from March 13 to December 31, 2020.
Establishes a new program to provide grants to hospitals, public entities, not-for-profit and for-profit entities, and Medicare and Medicaid enrolled suppliers and providers to cover unreimbursed health care related expenses or lost revenues attributable to the public health emergency resulting from COVID-19. Additional details to be determined by the Secretary of Health and Human Services.
Allows employers and self-employed individuals to defer payment of the employer share of the Social Security tax they otherwise are responsible for paying to the federal government with respect to their employees. Requires that the deferred employment tax be paid over the following two years, with half of the amount required to be paid by December 31, 2021 and the other half by December 31, 2022.
Provides $1 billion to the Department of Defense to invest in manufacturing capabilities in order to increase production of PPE and medical equipment to meet the demand of health care workers nationwide.
Requires that certain medical supplies, including PPE and supplies necessary for the administration of drugs and diagnostic tests, be included in the strategic national stockpile.
Places new requirements on device manufacturers to notify the HHS Secretary of potential or likely shortages of medical devices that are life-supporting, life-sustaining, used in emergency medical care, or during surgery. It also allows for expedited inspection and review to curb any potential shortages. The list will be made publicly available unless otherwise determined by the HHS Secretary and will include relevant information about the device and the reason for the shortage.
Cancels payments and suspends interest accrual for all federal student loan borrowers with federally-held loans through September 30, 2020.
Provides economic assistance to health care providers who are on the front lines treating patients with COVID-19 by temporarily suspending automatic Medicare sequestration payment cuts. These cuts would have reduced payments to providers by 2%, from May 1 through December 31, 2020.
Establishes liability protections for health care professionals who provide volunteer health care services during the COVID-19 emergency, if the professional is providing health care services that are within the scope of their license, registration, or certification in response to the COVID-19 emergency.
Provides a safe harbor for high-deductible health plans stating that plans can still be treated as high deductible plans if they fail to have a deductible for telehealth and other remote services.
Removes the requirement previously enacted under the first coronavirus response package (Public Law 116-123) which stated that a doctor had to have treated a patient within the last three years to use expanded telehealth authorities under Medicare. Eliminating this requirement will enable beneficiaries to access telehealth services in their home and from a broader range of providers.
Allows federally qualified health centers (FQHCs) and rural health clinics to furnish telehealth services to beneficiaries in their home or another location during the COVID-19 emergency and be reimbursed for these services at a rate that is similar to payment provided for comparable services under the Medicare physician fee schedule.
Clarifies existing law to ensure that all beneficiaries are able to receive all tests for COVID-19 through Medicaid with no cost-sharing.
Expands public and private insurance coverage with no cost sharing of testing for COVID-19 to include in vitro diagnostic products approved by states, as well as those approved by the FDA.
For the COVID-19 testing that is covered with no cost to patients, requires an insurer to pay either the rate specified in a contract between the lab and the insurer, or, if there is no contract, a cash price posted by the lab. This section requires each laboratory provider of a diagnostic test for COVID-19 to publicize the cash price for the test on a public internet website of such lab.
Until the end of the public health emergency, every laboratory that performs or analyzes a test that is intended to detect SARS-CoV-2, or to diagnose a possible case of COVID-19, must report the results to the Secretary of Health and Human Services. The format, timing, and frequency of reporting will be determined by the Secretary through regulations.
Allows HHS to reassign members of the National Health Service Corps to sites close to the one to which they were originally assigned, with the Corps member’s voluntary agreement, in order to respond to the COVID-19 public health emergency.
Directs $1.32 billion to community health centers for the detection of SARS-CoV-2 or the prevention, diagnosis, and treatment of COVID-19.
Reauthorizes a number of public health programs, including:
- Telehealth Network and Telehealth Resource Centers Grant Programs
- Rural Health Care Services Outreach, Rural Health Network Development, and Small Health Care Provider Quality Improvement Grant Programs
- Healthy Start Program
- Community Health Centers program
- National Health Service Corps program
- Teaching Health Center Graduate Medical Education program
- Special Diabetes Program and Special Diabetes Program for Indians
CARES Act Frequently Asked Questions
The CARES Act was passed to assist business owners with immediate financial
relief during the COVID-19 pandemic. These FAQs will assist you, your practice managers, and your consultants in identifying what is right for you.