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A role for rural hospitals in the coronavirus (COVID-19) pandemic

Mar 27, 2020

Rural and community hospitals could fill a major gap in a healthcare system that will likely be overloaded, in varying degrees, for at least the next 18 months due to the COVID-19 global pandemic.  Congress is in the process of passing the Coronavirus Aid, Relief, and Economic Security Act (“the Cares Act”) that provides unprecedented relief designed to help business in general, but specific allocations for hospitals. Many of the benefits require no action by hospitals, such as a 20 percent increase in reimbursement for treatment of COVID-19 patients, a delay of scheduled Disproportionate Share Hospital (DSH) reductions and limitation of liability for volunteer health care professionals during COVID-19 crisis.  However, some important assistance under the Cares Act will require prompt action by hospitals to benefit including:

• Expansion of the Medicare hospital accelerated payment program during the COVID-19 public health emergency will provide hospitals, especially in rural areas, a 6 month advanced lump sum or periodic payment, based on net reimbursement represented by unbilled discharges or unpaid bills. Hospitals may also be entitled to payment that are increased up to 100 percent of the prior period payments, with Critical Access Hospitals able to receive up to 125 percent increase. Hospitals would be required to start paying down the loan out of recoupment from claims after 4 months and would have 12 months to complete repayment without interest.
• The Paycheck Protection Program will provide loans to for-profit and non-profit small businesses up to $10 million for expenses such as payroll, benefits and rent for the time period of February 15 - June 30, 2020.  A substantial amount of the loan may be forgivable if the employers does not lay off employees.  Under the Cares Act, a small business with fewer than 500 employees may be eligible.  For more information about what small businesses need to know about the expansion of the Small Business Administration’s Section 7(a) Loan Program, click here. 
  

Additionally, small business loans up to $2 million may be available from the U.S. Small Business Administration under the Coronavirus Preparedness and Response Act. 

Please do not hesitate to contact us if you have any questions about these opportunities, if we can connect you with banks that have SBA programs, or if we can be of assistance in any way regarding your preparedness or employment advice during this difficult time. This will be a prolonged effort, and we at Waller have been a leader representing hospitals for over 50 years and we are committed to helping you navigate these challenges and advance your business and community missions and goals.

For additional legal resources and answers to some frequently asked questions, visit our Coronavirus portal.