The Omnibus and Coronavirus Relief Bill was passed by Congress on December 21, 2020. The Bill, over 5,000 pages, titled The Consolidated Appropriations Act, 2021 (Omnibus and Coronavirus Relief Bill) will directly or indirectly impact every part of the healthcare delivery system. Some of the major issues we have been following include:
Paycheck Protection Program
The Bill provides about $300 billion for the Paycheck Protection Program. The period for applying for loans would extend to March 31, 2021. Loans would be limited to $2 million for most borrowers, down from $10 million provided under the CARES Act. Organizations who received a PPP loan under the CARES Act would be able to apply for a second draw loan if certain conditions are met (principally less than 300 employees and who experienced lost revenues of 25% or more from 2019 to 2020).
Business expenses allowable under the PPP loans would be expanded to include items like PPE, operational expenses, and other costs; however, the 60% payroll rule would continue.
The Bill causes debt forgiveness to remain tax-free, but provides language directing the IRS to allow those expenses used to qualify for loan forgiveness to be deductible. Of course, this was always the intent of the CARES Act even though the IRS had attempted to mitigate the tax benefit to borrowers.
Provider Relief Funds
The Provider Relief Fund (PRF) section of the Bill includes a small amount of additional PRF funding plus some key policy changes to the program. It would provide an additional $3 billion to the PRF and provides some potential assistance regarding the calculation of lost revenues.
The bill contains two key payment increases for Medicare providers:
- The sequester moratorium, which went into effect in May, will be extended for another three months until March 31, 2021.
- There will be a one-time, one-year 3.75% payment bump to the entire Medicare Physician Fee Schedule.
RHC and FQHC Payment for Hospice Services
Beginning on January 1, 2022, Rural Health Centers (RHCs) and Federally Qualified Health Centers (FQHCs) can receive payment for hospice services furnished while serving as attending physicians for their patients under Medicare Part B.
There are many provisions of the Omnibus and Coronavirus Relief Bill that need to be reviewed and reported. We will provide much more detail once the Bill has been more thoroughly digested.