In this episode, we are joined by Mike Merola, Managing Partner at Winning Strategies Washington, to discuss the recently passed CARES Act.
Highlights of this episode include:
- Overview of the legislation and how it affects hospitals and the healthcare industry.
- What hospitals will spend the federal funds on from personal protective gear to building new ICUs.
- How Medicare reimbursement is addressed in the bill.
- What provisions in the bill will help hospitals with cash flow issues?
- And more…
Mike Passanante: Hi, this is Mike Passanante and welcome back to the award-winning Hospital Finance Podcast®.
Late last week, the Coronavirus Aid, Relief, and Economic Security Act was passed and signed by President Trump. To give us a breakdown of what is in that bill, I’m joined by Mike Merola from Winning Strategies Washington. Mike, welcome back to the show.
Mike Merola: Thanks Michael. I appreciate the chance to be here with you. It’s been a wild week in Washington and I’m anxious to share some of the details of the package with your audience.
Mike Passanante: Indeed. We’re looking forward to hearing what’s contained in there. So why don’t we start out and obviously there’s things that affect hospitals and then there’s other broader provisions in there, so for purposes of what we’re going to be talking about, we’re going to look specifically at the effect of the legislation on hospitals and other aspects of healthcare that are related to that. So in that vein, why don’t you give us a brief overview of what’s in the legislation?
Mike Merola: Sure. I think from a hospital’s perspective, the most critical piece of the package is this $100 billion– it’s a $100 billion fund that’s going to run through HHS that will cover non-reimbursable expenses, all attributable to COVID-19. I think that’s really what the industry is anxious to learn more about.
Mike Passanante: And so what can they, hospitals, reasonably expect to see from this latest bill?
Mike Merola: Sure, so in terms of the expenses that qualify for funding– and again, we’re going to see the House literally– we’re talking on Friday afternoon, the House just passed it. The president will sign it probably over the weekend, in the next day or so and we’ll see as the agencies put out more guidance on the process but from talking to folks on The Hill, from reading the legislation, examples of the types of things that hospitals will spend this money on include building or retrofitting new ICUs, increased staffing or training, personal protective equipment, building of temporary structures and those types of things. And any of these expenses that– the hospital can both bill the government and bill insurance and then if they get reimbursement from the insurance company, they’ll have to give the money back to the Feds but there’s going to be apparently a very flexible program with time for them to sort through all of that.
Mike Passanante: And how is Medicare reimbursement addressed in the bill?
Mike Merola: What I’ve heard the most excitement about is of the suspension of the sequester which will mean the hospitals have more resources generally. But also, it’s going to allow for increased access to telehealth services as well for seniors and other Medicare beneficiaries and I think that’ll be– I think it’s going to be important for all hospitals but particularly for those in the rural areas to take advantage of.
Mike Passanante: Mike, there’s some other provisions in the bill to help hospitals with cash flow issues, maybe payroll issues during this critical time. Can you explain those for us?
Mike Merola: I think policymakers on The Hill and in the administration understand that COVID-19 has created significant cash flow concerns for many hospitals. So there are supervisions in there to help hospitals receive accelerated payments. Specifically acute care hospitals, critical access hospitals, children’s hospitals and prospective payment system exempt cancer hospitals can request accelerated Medicare payments for inpatient hospital services. And this is an expanded set of hospitals compared with the existing accelerated payment program. So rather than having to wait until claims have been processed, issue payment, Medicare’s going to work with qualified hospitals to estimate their upcoming payment and give that money to the hospital in advance. So qualified facilities can request a lump-sum or a periodic payment reflecting up to six months of Medicare services. The payments will be repaid to Medicare; however, the qualifying hospital wouldn’t be required to start paying CMS back for about four months after receiving the first payment and they’d have at least 12 months to complete repayment without paying interest.
Mike Passanante: And Mike, there’s another provision in there that talks about the SBA Paycheck Protection Program. What can you tell us about that?
Mike Merola: Sure, so this is a $350 billion pot of money that’s going to go do the small business administration that’s really geared towards providing grants to employers, including hospitals, that keep their employees on their payroll. And they can be forgiven for a portion of the grant that’s tied to expenses directly related to sustaining their operations during the pandemic. So that’s payroll, mortgages, those types of things, they would qualify for forgiveness. So that’s something, I think, there’s a lot of interest and excitement about even beyond the hospital sector.
Mike Passanante: Certainly a lot of information in the Act. We’re going to have a summary up on besler.com along with a blog post and podcast associated with this topic that you’re listening to. So if you’d like to dive deeper and get more information about what we’ve just talked about here today, you can go up to besler.com. Mike Merola, thanks so much for joining us on the podcast today and shedding some additional light on this new legislation.
Mike Merola: Thanks, Michael, I’ll talk to you soon.
COVID-19, better known as Coronavirus, has spread throughout the world. Symptoms of this respiratory disease may include fever, cough, and shortness of breath. These symptoms may show up 2 to 14 days after exposure. If you are experiencing these symptoms and have come into contact or are in an area with an ongoing outbreak, please call a hotline and/or consult with a physician. Clean and disinfect high-touch surfaces. For more information, please visit cdc.gov/covid19. Thank you.