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Q&A on the CARES Act’s Impact on Health Care Providers

Q: What is the CARES Act?

A: The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) is the latest law passed by Congress and signed by President Trump on March 27, 2020, to address the COVID-19 pandemic (the Pandemic). The more than 800-page law allocates more than $2 trillion toward various sectors of the economy to start addressing the widespread financial impact of the Pandemic, including many provisions that pertain to the health care sector.

Q: What is the Public Health and Social Services Emergency Fund?

A: The health care community lobbied aggressively to ensure that providers received direct economic benefits in the CARES Act to ease the burden of lost revenue due to the costs of treating COVID-19 patients and the reduction of other health care services. The CARES Act directs $100 billion to the Public Health and Social Services Emergency Fund to support hospitals, physician groups and other health care providers. The exact eligibility criteria and application process have not been announced though more information should be available in the coming days.

Q: Are the loans available from the Small Business Administration to help practice groups maintain their businesses and pay employees during the Pandemic?

A: Yes. The CARES Act also includes the Small Business Administration’s Paycheck Protection Program, a federally backed loan program that can provide up to $10 million in loans to help cover payroll, rent, interest on mortgage payments (but not the principal mortgage) and utilities. For purposes of this program, payroll expenses are capped at $100,000 on an annualized basis for each employee, as prorated for the period from February 15, 2020 to June 30, 2020.

Employers must maintain their staffing levels similar to pre-Pandemic levels in order to receive forgiveness for loans from the Paycheck Protection Program. Loan recipients will be eligible for loan forgiveness in an amount equal to their payrolls costs, paid sick or medical leave, insurance premiums, interest payments on mortgages, rent payments, and utility payments for an eight-week period beginning on the date of the loan’s origination.  

Q: Does the CARES Act impact health care reimbursement rates?

A: Yes. A planned 2% Medicare sequester will be suspended from May 2020 to December 2020. Hospitals treating Medicare patients with COVID-19 will receive a 20% add-on payment for Medicare reimbursements for inpatient care.

Q: Will the CARES Act help providers access additional Personal Protection Equipment?

A: Yes. The CARES Act calls for spending an additional $27 billion from an emergency fund so medical professionals can receive more personal protection equipment (PPE). These funds will be managed by the Assistant Secretary for Preparedness and Response, part of the U.S. Department of Health and Human Services, so that PPE can be purchased and distributed through the Strategic National Stockpile.

Q: Does the CARES Act address liability concerns of health care providers during the Pandemic?

A: Yes. The CARES Act limits liability for volunteer health care professionals during the COVID-19 emergency response for health care provided within the scope of the volunteer’s licensure and made in good faith to fight COVID-19. Certain exceptions to this liability limitation exist, including for harm that was caused “by an act or omission constituting willful or criminal misconduct, gross negligence, reckless misconduct, or a conscious flagrant indifference to the rights or safety of the individual harmed by the health care professional” or if the provider was intoxicated when providing care.

Q: Is the CARES Act the last piece of legislation Congress will pass to help providers during the Pandemic?

A: Unlikely. Debate has already begun about the need for additional stimulus packages and legislation addressing other aspects of Pandemic-related health care, such as broader liability protections for health care providers treating patients with COVID-19, have already been introduced. Providers should continue to monitor the rapidly evolving legal landscape for the latest changes impacting health care practice during the Pandemic.

Please contact the Gordon Feinblatt Health Care team if you have questions about how the current status of any regulations or executive orders impacts your practice.

Barry F. Rosen
410-576-4224 • brosen@gfrlaw.com

Alexandria K. Montanio
410-576-4278 • amontanio@gfrlaw.com

Christopher R. Rahl
410-576-4222 • crahl@gfrlaw.com

Margaret M. Witherup
410-576-4145 • mwitherup@gfrlaw.com

For additional information on the impact of the coronavirus, visit our COVID-19 information hub for a list of up-to-date content.