When the Provider Relief Fund was established as part of the CARES Act, dentists were mentioned for future relief. Finally, on July 10, the U.S. Department of Health and Human Services (HHS) announced it had expanded the Medicaid program to include dentists. However, dentists must act quickly—the deadline to apply for the program is July 24.
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Here are a few quick facts regarding the Provider Relief Fund that are important to consider.
How does the Provider Relief Fund work?
According to the HHS, each provider can expect to receive a payment of approximately 2% of their previous year’s gross revenue from patient care. For example, if you reported $1,000,000 in gross revenue in 2019, you would be eligible for a payment of $20,000. That said, the final payment amount could fluctuate; the HHS information regarding this is fairly vague.
How can you use these funds?
Provider Relief Funds may be used to cover revenue losses caused by COVID-19 as well as other health care-related expenses incurred by preventing, preparing for, and responding to the coronavirus. Examples of these expenses include supplies, equipment, training, and temporary structures used to provide health care services for possible or actual COVID-19 patients.
What should you consider before applying?
Although the Provider Relief Fund delivers economic relief, there are a few strings attached to the program. First, if you receive any payment from it, your business name and the payment amount will be public information. As a result, it’s possible anyone could calculate your 2019 gross revenue amount.
You must also certify that the funds received “will only be used to prevent, prepare for, and respond to coronavirus, and that the [money received] shall reimburse the Recipient only for health care related expenses or lost revenues that are attributable to coronavirus.” That said, the HHS hasn’t been crystal clear on how dental offices will need to document the use of the funds. Nevertheless, you should be prepared to keep detailed records of your expenditures.
There are additional reporting requirements to know about, too, especially if you were to receive more than $150,000 in combined government benefits (i.e., PPP loans, EIDL grants/loans, and FFCRA Sick Pay Credits). Language ambiguities exist in the rules as well, which makes it hard to say exactly how they will apply to dental offices.
Are you eligible for a payment?
To be eligible to receive a payment, you must not have received a payment from the $50 billion Medicare-focused general distribution or the Medicaid and CHIP distribution. You must also have filed a federal income tax for fiscal years 2017, 2018, or 2019 (unless you are exempt from filing).
What’s more, you must have provided patient dental care after January 31, 2020, and have not permanently ceased to provide patient care. You must have reported your gross receipts or sales from providing patient care on Form 1040 or another applicable form.
Think your dental office could benefit? Apply by July 24.
Again, the deadline for dentists to take advantage of this program is fast approaching. But it’s wise to avoid applying just because you can. As we mentioned, there is fine print to scrutinize as well as a few potential consequences to weigh. That said, if you’re in a difficult position and worried about your office’s ability to continue serving patients, the Provider Relief Fund could be a much-needed lifeline.
If you have questions about the Provider Relief Fund or are unsure if you should apply, KHA is here to be your trusted advisor. We can also guide you through the application process and help you calculate your benefit. Contact us today to get started.
These sources are simply included for informational purposes. KHA Accountants, PLLC, its partners and others do not provide any assurance as to the accuracy of these items or the information included therein. As such, KHA Accountants, PLLC cannot be held liable for any information derived from referenced sources. There are many unknowns at this time regarding what other stimulus (grants or other loan options) may become available with pending and future bills, executive orders, or emergency declarations to follow, that may become laws. Consult your legal and business advisors prior to making financing decisions. This is intended for illustrative and discussion purposes only.