COVID-19 Economics

Emergency SBA Financing: CARES Act

With $349 Billion in Emergency Small Business Capital Cleared, SBA and Treasury Begin Unprecedented Public-Private Mobilization Effort to Distribute Funds

Social Security Benefits Will be Paid on Time and Other Updates Related to the COVID-19 Pandemic

Stimulus Package Passed by Congress Provided Several Programs to Aid Physicians Through this Crisis
As reported in an AMA summary of the $ 2 trillion stimulus package enacted into law last Friday, here are some of the key provisions to benefit physicians:

Small business loans. Small businesses, including physician practices, with no more than 500 employees are eligible to apply for the Small Business Administration’s (SBA) section 7(a) Payroll Protection Program. For more information how physicians can access this program, click here.

This allows a small business to apply to an SBA-approved lender for a loan of up to 250% of the business’ average monthly payroll costs to cover 8 weeks of payroll as well as help with other expenses like rent, mortgage payments, and utilities. The maximum loan amount is $10 million. Sole-proprietors, independent contractors, and other self-employed individuals are eligible.

A loan can be forgiven based on maintaining employee and salary levels. For any portion of the loan that is not forgiven, the terms include a maximum term of 10 years, a maximum interest rate of four percent. Small businesses and organizations will be able to apply if they were harmed by COVID-19 between February 15, 2020 and June 30, 2020. This program is retroactive to February 15, 2020andare available through June 30, 2020.

Emergency loans.  Moreover, there was also Authorization for $10 billion in “emergency” Economic Injury Disaster Loan (EIDL) to eligible entities with not more than 500 employees. Allows an eligible entity that has applied for an EIDL loan to request an advance on that loan, of not more than $10,000, which the SBA must distribute within 3 days. Advance payments may be used for providing paid sick leave to employees, maintaining payroll, meeting increased costs to obtain materials, making rent or mortgage payments, and repaying obligations that cannot be met due to revenue losses

Financial support for hospitals, physicians, and others. Provides $100 billion through the Public Health and Social Services Emergency Fund to provide immediate financial relief by covering non-reimbursable expenses attributable to COVID-19. Health care entities, including physician practices, that provide health care, diagnoses, or testing are eligible. Non-reimbursable expenses attributable to COVID-19 qualify for funding.

Examples include increased staffing or training, personal protective equipment, and lost revenue. HHS is instructed to review applications and make payments on a rolling basis to get money into the health system as quickly as possible. HHS is given significant flexibility in determining how the funds are allocated and is expected to release guidance on the application process shortly.

Business Loan Forgiveness Included in CARES Act
Within the Coronavirus Aid, Recovery and Economic Security (CARES) Act that President Trump signed yesterday is a $350 billion Paycheck Protection Program that will allow businesses and nonprofits with fewer than 500 employees to apply for loans up to $10 million each to cover losses caused by the COVID-19 pandemic. 

What makes this relief even more significant is the possibility for loan forgiveness, which is available to employers who retain their workforce levels through the crisis. If you follow the guidelines carefully, you can essentially convert your business loan to a grant – even if you’ve already laid off employees.

Loan Forgiveness Requirements

Loans may be forgiven if businesses use the money to pay for payroll costs, salaries, benefits, mortgage interest, rent and/or utilities.  The forgiven amount would be equal to the amount actually paid for these expenses during the eight weeks following disbursement of the loan. Additional wages paid to tipped employees under Section 3(m)(2)(A) of the Fair Labor Standard Acts may also be forgiven.

Forgiveness will be scaled back if the business has a reduction in employees, salaries or wages. Reductions in workforce, salaries and wages that occur from February 15, 2020 to April 26, 2020 will be disregarded for purposes of reducing the forgiveness amount, as long as the reductions are eliminated by June 30, 2020.

For purposes of the loan forgiveness, a reduction in workforce and salary or wages will be calculated as follows:

  • Workforce reductions will be calculated by the initial forgiven amount multiplied by the quotient of average full-time equivalents (FTEs) during the eight-week period, divided by the average FTEs for the period from February 15, 2019 through June 30, 2019 or January 1, 2020 through February 29, 2020, as determined by the loan recipient.
  • Salary or wage reductions will be determined by the amount of any salary or wage decrease in excess of 25 percent of the total salary or wages during the most recent full quarter such employee was employed before the eight-week period. Only employees who did not receive, during any single pay period during 2019, wages or salary at an annualized rate of pay in excess of $100,000 are included in this calculation.

Advance Medicare Payments to Help Physicians Through this Period
Moreover, CMS announced over the weekend a process for physicians to receive 100% of predicted Medicare payments for a 3-month period ( Fact Sheet: Advanced Payment Program During COVID-19 Emergency).  Here is a recommended process for applying for these advanced payments shared with MSSNY by a medical practice, as well as some of the particulars of this program:

1. Go to your National Government Services (NGS) website and fill in, sign, and submit an Accelerated / Advance Payment request form for your practice.

2. Can request up to 100% of Medicare payment for a 3-month period.

3. Check box 2 (“Delay in provider/supplier billing process of an isolated temporary nature beyond the provider’s/supplier’s normal billing cycle and not attributable to other third-party payers or private patients.”); and

3. State that the request is for an accelerated/advance payment due to the COVID-19 pandemic

4. Will receive payment within 7 calendar days from the request.

5. Recoupment will begin 120 days after payment issuance date.


1.     Have billed Medicare for claims within 180 days immediately prior to the date of signature on the provider’s/supplier’s request form,

2.     Not be in bankruptcy,

3.     Not be under active medical review or program integrity investigation, and

4.     Not have any outstanding delinquent Medicare overpayments.

For further information, contact Regina McNally, VP of MSSNY’s Socio-Economic

Division at 516-488-6100 ext.332 or email

Request for Accelerated/Advance Payment