Irv Lichtenwald

What Does the CARES Act Mean for Me?

April 14, 2020

COVID-19, Healthcare Industry, Public Health 9 Minute Read

4.24.2020 Update: On Friday, April 24, President Trump signed a $484 billion spending bill focused on stemming the tide of COVID-19 fallout passed by the House and Senate earlier in the week. The legislation provides an additional $310 billion for the Paycheck Protection Program–an SBA-managed loan program with generous forgiveness terms that gives small business incentives to retain employees. The initial $349 billion allocated to the program was gone in 13 days. (See post below for more on applying for SBA loans).

The legislation also includes $60 billion for a separate SBA loan and grant program; $75 billion for hospitals and providers; and $25 billion for a coronavirus testing program.

Previously posted information suggested that hospitals would have to fill out a form to receive financial support. It appears that impression was incorrect, according to Healthcare Finance:

“The funding will be based on the providers’ share of Medicare fee-for-service reimbursements, [HHS Secretary] Azar said. Payments will go out weekly, on a rolling basis, as information is validated, with the first wave to be delivered on Friday, April 24. A portion of providers will automatically be sent an advance payment based on the revenue data they submit in Centers for Medicare and Medicaid Services cost reports. Providers without adequate cost report data on file will need to submit their revenue information to a portal opening this week. Providers who receive their money automatically will still need to submit their revenue information so that it can be verified.”

Posted 4.20.2020: As of the day this was written, the coronavirus has infected almost 2 million worldwide and caused the deaths of more than 125,000 people (Worldometer data as of 12:15 PM on April 14, 2020). In the United States, the relevant figures are more than 600,000 infected and north of 25,000 deceased. Without successful social distancing, those numbers could be dramatically worse.

And still they are dwarfed by the massive numbers associated with the economic impact of the coronavirus and the illness it causes, COVID-19. In the space of just three weeks, applications for unemployment insurance in the United States skyrocketed from the low hundreds of thousands to more than 16 million.

To prop up the economy in the interim, the federal government initiated the Coronavirus Aid, Relief and Economic Security (CARES) Act, which pumps $2 trillion into the economy to achieve a number of objectives, among them make sure that healthcare providers can continue to function.

What does that mean to individual providers? It depends on the focus of your organization. Keep reading for an overview of what federal assistance means to each healthcare sector.


Of the roughly $180 billion allocated for public services, hospitals will receive the lion’s share—about $100 billion—in the form of reimbursements for providing COVID-19-related care, e.g., building temporary structures, leasing properties, buying supplies, hiring and training additional workers and increasing surge capacity. Importantly, seeking reimbursement for items that are reimbursed by other sources will be considered fraud.

The reimbursement program is administered by the assistant secretary for preparedness and response in the Department of Health and Human Services (HHS). With the stroke of a pen, the assistant secretary went from managing a $2.6 billion budget to directing $100 billion in funds.

Applicants will, of course, have to fill out a form, and details on how to access the form and which organizations might receive priority—the $100 billion is probably too little, after all—are still tough to come by. Still, organizations will want to start lining up numbers now in anticipation of more information.

“The sooner your team can come up with a reliable calculation of the loss you are experiencing because of declining electives or lower ER volume, the better,” says Martie Ross of Kansas City accounting firm PYA, PC.  “Also be prepared to quantify any additional expenses incurred due to the pandemic. You will want to have these numbers ready to plug into whatever formula they provide,” Ross says.

COVID-19 will also prove financially beneficial to hospitals in ways that are not directly related to the virus. As part of the CARES Act, Congress pledged to reverse scheduled cuts in Medicare and Medicaid reimbursements, effectively spreading an additional $11 billion across 3,000 hospitals.

Finally, the CARES Act also provides for accelerated payments through Medicare parts A and B. The Centers for Medicare and Medicaid Services (CMS) outlines how the program works in this fact sheet and this letter to providers. Qualified providers are those that have billed Medicare in the previous 180 days, are not in bankruptcy, are not in active medical review and don’t have any delinquent Medicare overpayments.

Listen to a podcast on CARES Act funding.


With so much focus on treating COVID-19 patients in extreme distress, many ambulatory providers are finding themselves with time on their hands, which translates as decreased revenue. So dramatic has been the drop off in activity for clinic-based providers that many teeter on the edge of insolvency. 

The decrease in business for clinics is similar to the experience of other types of businesses, e.g., restaurants, theaters, etc., even while the product is much more essential. For that reason the CARES Act provides for $350 billion in loans made available through the Small Business Administration (SBA) for entities with fewer than 500 employees.

The money is disbursed through one of two different programs (side-by-side comparison here):

  • Paycheck Protection: The program offers up to $10 million to cover payroll and other expenses. The program has an incentive structure in which some or all of a loan may be forgiven if the company uses the money to retain workers or re-hire those it had to let go. Retain or quickly re-hire employees before the money arrives in an account and keep them for eight weeks and the loan is 100 percent forgiven. The application process is being managed by local banks, so contact a lender with whom you have a relationship; the application deadline is June 30.
  • Economic Injury Disaster: This SBA program has been around for a while and offers $2 million for disaster-related losses. With the rise of COVID-19, the program now has more funds to work with and is relaxing some previous requirements. The loans are made directly by SBA and applicants can apply on the agency website. The CARES Act makes the first $10,000 a grant that the applicant should have within three days.

NOTE: Predictably, the federal government has been overwhelmed by applications for the Economic Injury program and is running days, sometimes weeks, behind the timeframes mandated by the CARES Act. Also, the money allocated to date is probably just not enough, so banks may be lending out less to each applicant than the legislation deems.

For those clinics that are able to retain workers without a loan, the federal government is providing an employee retention tax credit on up to 50 percent of $10,000 in wages per employee. Additionally, for those clinics who have an outstanding SBA loan, the agency is paying principal and interest on existing loans and new loans taken out before September 27.


Logically, telehealth is a ready solution for the challenge of evaluating sick patients who are highly contagious. The CARES Act recognizes that this is telehealth’s moment, if ever there was one, and provides $200 million for the Federal Communications Commission to assist providers in using telehealth. The payment criteria has been expanded by CMS, as have the types of acceptable technology and the providers eligible for reimbursement, which include these services:

  • ED visits, Levels 1-5
  • Domiciliary, rest home, or custodial care services, new and established patients, all levels
  • Home visits, new and established patients, all levels
  • Care planning for patients with cognitive impairment
  • Psychological and neuropsychological testing
  • Therapy services, PT and OT, all levels

Additional Highlights

Of course, the size of the CARES Act makes summarizing it in a blog post particularly challenging, but here are a few other noteworthy items that may be of interest to both independent clinics and hospitals.

  • Access to government-provided care and coverage related to COVID-19 now includes patients who reside in a state that does not make medical assistance available. It also applies to individuals enrolled in a federal program and health plan that does not have “minimum essential coverage” as defined by the IRS.
  • Nurse practitioners, clinical nurse specialists and physician assistants can certify and establish a home health plan of care.
  • Acute care hospitals are not prohibited from providing home and community-based services during the emergency period as long as those services are documented in the patient’s care plan.
  • MIPS data submission is delayed to April 30, 2020. Those who have not submitted by then do not need to take any additional action to qualify for the automatic extreme and uncontrollable circumstances policy.

In a nod to doing better next time, the CARES Act also funds workforce programs with the goal of luring more people into public health and similar jobs. It also includes $16 billion for the strategic national stockpile of medical supplies and $11 billion for vaccines and therapeutics.

Of course, the CARES Act is a legislative effort with the goal of both meeting a contagion head on and creating hope among citizens that this is surmountable, temporary challenge. The stock market seemed to respond in an optimistic fashion.

But it will be helpful to remember that America is far from the end of this pandemic, and many of the details necessary to make the CARES Act effective remain to be worked out. More money will be needed. More employment insurance applications will be filed. More balmy days will be spent indoors.

In the meantime, find a personal philosophy that is not weighed down with too much expectation and emotion. Use Zoom to maintain a visual relationship with friends and family. Balance the time spent watching Tiger King with something more uplifting.

And, by all means, keep your distance. This will end unless our generosity includes sharing the virus as well as moral support.

Download CARES Act Cheat Sheet

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