COVID-19

Article Dean Dorton

The National Association of Student Financial Aid Administrations (NASFAA) has released guidance related to the reporting of the Higher Education Emergency Relief Funds (HEERF) as part of the Coronavirus Aid, Relief and Economic Security Act (CARES Act). Based upon this guidance, payments under HEERF should be reported on the 1098-T in Box 5.

See more information and background here:

NASFAA Q&A

Question: Are Emergency FSEOG and Higher Education Emergency Relief Fund Student Grants Reported On IRS Form 1098-T?

Answer: Yes. Higher Education Emergency Relief Fund grants to students and Emergency Federal Supplemental Educational Opportunity Grant (FSEOG) awards are included on IRS Form 1098-T.

According to the National Association of College and University Business Officers (NACUBO), the 26 CFR 1.6050S-1 reporting requirements for the 1098-T are still in effect and require all schools to report all “grant aid processed and administered by the institution.” HEERF grants to students and Emergency FSEOG amounts should appear in Box 5.

Further, the IRS FAQs: Higher Education Emergency Relief Fund and Emergency Financial Aid Grants under the CARES Act make it clear that students cannot claim any education credits or deductions, so the emergency grant amounts should not appear in Box 1 of the 1098-T.

Note: The IRS collects the 1098-T, not to determine whether the student has taxable scholarships or grants, but to provide documentation allowing the IRS to ensure that students claiming the American Opportunity Credit and Lifetime Learning Credit have not paid all of their tuition and fees costs with grants and scholarships.

Any additional questions on this topic go directly to the IRS or the school’s business office, as tax rules and regulations are not within NASFAA’s area of Title IV expertise.

For more information on how the Coronavirus is impacting businesses across multiple industries, visit our COVID-19 resource page:

COVID-19 Resources

Article Dean Dorton

Quality Assurance, Compliance, and Monitoring

The Office of Inspector General (OIG) first issued compliance guidance for physician practices almost 20 years ago, yet many practices still struggle with a cost-effective, pre-emptive approach, while keeping patient care the highest priority. The adoption and enhancement of a voluntary, well-designed compliance program can boost the practice’s ability to provide quality patient care, and demonstrates to the community that the practice has a strong commitment to honest and fair dealings, as well as sound business leadership. Additionally, a compliance program aids in mitigating risks associated with leading a medical practice, in addition to preventing fraud, waste, and abuse.

Whether you’re a seasoned provider of Telehealth services, or not, it will be prudent to include Telehealth services into your existing compliance program.

Seven Essential Elements of an Effective Compliance Program

An effective compliance program must be a continual process, and consists of the following seven elements:

  1. Written standards of conduct, policies and procedures
  2. Designation of a compliance officer or contact
  3. Effective education and training
  4. Monitoring and auditing
  5. Reporting and investigating- establishing open lines of communication
  6. Appropriate enforcement and disciplinary mechanisms
  7. Response, prevention, and corrective action of systemic problems

Every organization and practice is different, and there is not a “one size fits all” answer for compliance program effectiveness. A practice’s commitment to compliance can be evaluated by the active application of compliance principles and written standards, demonstrated in the practice’s day-to-day operations.

Here are a few items to consider for Quality Assurance and Compliance/Monitoring:

  • Regular chart audits – conduct monthly, quarterly, or biannually depending on results of a baseline audit
  • Random or targeted chart audits – examples include inpatient, outpatient, E/M (evaluation & management), outpatient surgery
  • Provider documentation education – focus education based on audit results
  • Coding audits and education – random audit of all chart types a coder has coded and provide education where needed
  • Billing requirements – POS Codes/modifiers/payer requirements
  • Pre-payment/post-payment audits – pre-bill avoids the potential of any paybacks relating to the audit

Dean Dorton’s healthcare consulting team would be happy to offer compliance program guidance, review the effectiveness of your existing compliance program, as well as assist you in building telehealth services into your current compliance program. Additionally, Dean Dorton has experts available to assist you in all telehealth matters including: compliance, billing, coding, and documentation.

Please do not hesitate to reach out to our experienced team with any questions you may have. We are committed to serving any of your healthcare needs.

For more information on how the Coronavirus is impacting businesses across multiple industries, visit our COVID-19 resource page:

COVID-19 Resources

Article Dean Dorton

Presentation slide deckPPP loan forgiveness guidancePPP Loan FAQs

The matters discussed in these materials provide general information only. You should consult with an advisor about your specific situation before undertaking any action because each organization’s situation is unique. Also, be especially aware that in this case, that is, with options available under the FFCRA and CARES Act, choosing a particular option could preclude you from other options. Furthermore, it is likely that additional guidance on the FFCRA and CARES Act will be issued by the appropriate governmental agencies, which could impact the information discussed in these materials. This information may not be construed as either accounting or legal advice.

Article Dean Dorton

The COVID-19 impact has been devastating to our economy, and perhaps no sector is feeling the brunt of this pandemic more so than our healthcare system. Dean Dorton recently spoke with leading practice administrators at Kentucky MGMA to understand the impact that this pandemic is causing to their medical staff, employees, and finances.

Meet the Participants

MARTINA DENNY
Administrator
Pediatric & Adolescent Associates, PSC
KMGMA President

CRAIG GILLESPIE
Chief Executive Officer
Family Practice Associates of Lexington, PSC
KMGMA President-Elect

MOLLIE SCHNETTLER
Administrator
Kentucky Diabetes Endocrinology Center
KMGMA Immediate Past President

ADAM SHEWMAKER
Director of Healthcare Consulting
Dean Dorton
Roundtable Moderator

Adam Shewmaker, Director of Healthcare Consulting at Dean Dorton, provides an introduction to the virtual roundtable.

Download full discussion

MARTINA: I am extremely impressed with how well our team is holding up. The first two weeks were the most stressful and I feel like now we are kind of getting acclimated to what’s going on. There have definitely been tears and some panic and stressful times, but the first two weeks were the most stressful. Our staff have really adapted and they have come together as a team, and they’re volunteering to go home early so that another team member can stay and work. There hasn’t been a lot of panic about “I don’t want to come to work because I’m worried I will get COVID.” They all have pulled together and done really well with all that we’ve been tasked to deal with.

CRAIG: I would say ours has been a little rockier than what Martina has described. Overall, they have been pretty well—some of them in particular have been worried about COVID. So I think there are a lot of unknowns with the family members, and just some fear—just that unknown was very stressful. We had two weeks where we were kind of pausing on some furloughs and not doing anything yet to try and do the right thing. Our employees just wanted to know if they were going to be furloughed or not.

MOLLIE: I would reiterate what Craig said. We just had a lot of anxiety about furloughs. Employees just really wanted to know, one way or another, but they seemed to handle it pretty well once we got to the point of making the decisions. But the in-between time was pretty rough. I only had one employee who just left—and said she couldn’t take it.

MARTINA: Our patient volume has dropped significantly, probably 55% at this point, and that came on very quickly. So we were pretty quick to pull the trigger on furloughing staff and physicians. Our staff really didn’t have time to be overly concerned about what was going to happen because we were so quick to tell them what was happening. We had to furlough four physician positions; we furloughed all of our part-time staff and we reduced all of our full-time staff to 30 hours per week. On top of that, we’re taking volunteers to go home early. We’re trying to get everybody in at that 30-hour mark. We also closed one of our locations temporarily and doing things that we never dreamed of doing. Overall, we typically have nine physicians in the office on a daily basis at multiple locations. We are keeping five right now; however, we only have enough work for about two-and-a-half to three.

CRAIG: My experience is similar to Martina’s; we’re down probably 60%. We’ve tried to bridge the gap some with the telehealth, telephone visits and that brought on its own set of circumstances and stress because we basically had a little bit of telehealth going on, just some e-visits, but not really video visits, so basically we rolled that out with two different methodologies in one day. So that was a problem. It would have been a two to three week process and we just scrambled to get it done. Like Martina, we laid off staff and laid off six providers completely, extending our nurse practitioners and PAs and then reduced a lot of the others. The impact has been felt, and as Martina said, it was quick. We bought a two-week time period where knew we had to do something and we just delayed as long as we could. But we finally had to pull the trigger and make hard decisions.

MOLLIE: We’re down close to 70-75% at this time. We did not do telehealth in the past. We talked about it, but we were so busy with the volume coming in, there wasn’t a time to schedule out a provider to do telehealth. Almost immediately, we laid off our part-time staff and we started offering telehealth. It was very challenging trying to implement telehealth immediately because everybody was hitting these telehealth companies all at the same time. So they’re like, “I’ll get back to you in 30 days.” We didn’t have 30 days. We got up and running on one and it seems to be going okay. But that was a huge challenge just trying to get information about telehealth that we could implement because everything hit at once.

Download full discussion

Article Dean Dorton

The Coronavirus Aid, Relief, and Economic Security (CARES) Act signed by President Trump on March 27 provides needed stimulus for individuals. Notably, getting cash in the pockets of individual taxpayers has been a focus of Congress.

This article summarizes income tax provisions in the CARES Act impacting individuals.

Recovery Rebates

Eligible individuals are starting to receive tax rebate checks from the Internal Revenue Service (IRS). The rebates equal $1,200 for single filers and $2,400 for joint filers, plus $500 for each qualifying child.

To be eligible for the full rebate, an individual must:

  • Be a U.S. resident
  • Not be a dependent of another taxpayer
  • Have a valid social security number
  • Have adjusted gross income (AGI) of $75,000 ($150,000 for joint filers) or less

Eligible individuals with AGI greater than $75,000 ($150,000 for joint filers) may receive a partial rebate. The rebate amount is reduced by $5 for each $100 that an eligible individual’s AGI exceeds $75,000 ($150,000 for joint filers). The rebate amount is fully phased-out when AGI exceeds $99,000 ($198,000 for joint filers).

The IRS will use the AGI reported on an eligible individual’s 2019 tax return to determine the amount of the rebate. If the 2019 tax return has not been filed, the IRS will utilize information from the individual’s 2018 tax return.

If individuals do not receive the full rebate based on 2019 (or 2018) AGI, they might receive the remaining rebate when they file their 2020 return if their 2020 AGI is less than the income thresholds noted above. Conversely, they will not be required to repay the rebate if their 2020 AGI exceeds the income thresholds.

No action is required by an individual to receive this payment. The IRS will automatically calculate and send rebates to those eligible. Taxpayers can check the status of their recovery rebate and confirm how they want to receive their payment (direct deposit or check) on the IRS website at https://www.irs.gov/coronavirus/get-my-payment.

Expansion of Charitable Contribution Deductions

For individuals that do not itemize deductions, taxpayers can receive a deduction of up to $300 for cash contributions made to qualified charitable organizations. This deduction will be available for tax years beginning in 2020.

For individuals that itemize deductions, the deduction percentage limitation for charitable contributions of cash to qualifying charitable organizations has been removed. This is effective for the 2020 tax year only. Before the CARES Act, cash contributions could only offset 60% of an individual’s AGI. This one-year suspension of the limitation means that individuals may offset 100% of their AGI by making cash contributions to qualifying charitable organizations in 2020.

It is important to note that non-cash contributions to qualifying charitable organizations and both cash and non-cash contributions to private foundations and donor-advised funds are still subject to deduction percentage limitations under the current tax law.

Deferral of Excess Business Losses

The Tax Cuts and Jobs Act (TCJA) of 2017 introduced a limitation on business losses deductible by individuals (and other noncorporate taxpayers) against other nonbusiness income for tax years beginning after December 31, 2017. The CARES Act defers the excess business loss limitation until tax years starting after December 31, 2020. Taxpayers impacted by this limitation for 2018 and 2019 may want to consider amending their 2018 and 2019 tax returns.

Reminder: Filing and Payment Deadline Extensions

Before the passage of the CARES Act, Treasury extended the April 15 deadline for filing federal income tax returns and making payments to July 15, 2020. The extension applies to payments of federal income tax, tax on self-employment income, and federal estimated tax payments due April 15. The deadline for making contributions to IRAs and health savings accounts is also extended to July 15.

The IRS also postponed to July 15, 2020 the due date for filing gift and GST tax returns and paying gift and GST taxes originally due April 15. This change impacts taxpayers who made reportable gifts during 2019.

On April 9, 2020, the IRS expanded this relief to include other federal income tax filings including estimated tax payments due on June 15, 2020.

For more information on how the Coronavirus is impacting businesses across multiple industries, visit our COVID-19 resource page:

COVID-19 Resources

Article Dean Dorton

The Coronavirus Aid, Relieve, and Economic Security (CARES) Act was signed into law by the President on Friday, March 27, 2020.  Its allocation of $2 trillion in resources represents the largest stimulus bill in US history.

While the allocation of resources and aid packages are significant, they likely will not be enough and perhaps will be followed with additional measures.  Financial losses due to canceled and postponed patient cases and increased pressure on labor are projected to be very challenging to healthcare providers.

Of particular interest to hospitals, physicians, medical providers, and the healthcare industry, the CARES Act includes more than $100 billion in direct aid and increased reimbursement.  The following are key components of the CARES Act as it relates to healthcare providers.

$100B is allocated for eligible healthcare providers, including hospitals, health systems, providers, community health centers (CHC), and federally qualified health centers (FQHC).  Providers eligible for this fund include public entities, Medicare or Medicaid enrolled suppliers and providers, for-profit and nonprofit entities in the United States that provide diagnoses, testing or care for individuals with possible or actual cases of COVID-19.  Additionally, this fund also provides relief for eligible healthcare providers for lost revenues associated with COVID-19.  The law authorizes the Secretary of Health and Human Services to review applications and make determinations about who will receive funds and for what purpose.

Increased Reimbursement and Waiving of Certain Restraints

  • CMS increases the weighting factor for DRGs related to patients diagnosed with COVID-19 by 20%
  • CMS expands the accelerated payment policy from 70% to 100% (125% for critical access hospitals). Allows hospitals to receive an advance Medicare payment due to extraordinary circumstances.
    • Increases the length of time payments can be received from three to six months
    • Delays the start of recoupment of any overpayments from 90 to 120 days
    • Extends the due date for any outstanding balances from 90 days to one year
    • Expands the types of hospitals (including critical access, children’s and cancer hospitals) that are eligible to apply for accelerated payments during the COVID-19 national emergency.
  • Temporarily suspends 2% Medicare sequestration for the period May 1, 2020 through December 31, 2020
  • Averts price reductions to durable medical equipment by suspending revisions to the Medicare durable medical equipment payment methodology for areas other than those that are rural and noncontiguous.
  • Relieves burdens and eases restrictions associated with telehealth. Previous legislation passed on March 6, 2020 lifted “originating site” rules.  The CARES Act codifies the previous CMS policy, stating that a physician is not required to have a prior treatment relationship with the patient to be reimbursed for telehealth services for the duration of the emergency period.  Other provisions are included to increase access to telehealth services for rural and underserved communities.
  • Increased flexibility to state Medicaid plans to cover certain costs and services during the emergency period. Private payers are required to cover COVID-19 diagnostic tests and treatments.
  • Providers of laboratory tests for COVID-19 are required to publish a cash price for diagnostic testing. The CARES Act imposes civil monetary penalties on diagnostic test providers that fail to post the cash price.
  • Provides additional funding for the development and manufacturing of diagnostic, preventive and therapeutic services for COVID-19.

Other Areas of Regulatory Relief

  • Delayed cuts in Medicaid DSH funds until December 1, 2020
  • Inpatient rehabilitation facilities (IRFs) are typically required to provide Medicare patients with at least 15 hours per week of intensive therapy (or three hours per day at least five days per week) in order to be eligible for coverage. IRFs are permitted to provide fewer hours of therapy during the emergency period
  • Temporarily waives the requirement that an LTCH have no more than 50% of its Medicare cases paid at the site-neutral rate to receive continued payment as an LTCH. This relief allows an LTCH to care for patients who require less intensive care during the emergency period without risking their designation as an LTCH under the Medicare program.
  • Allows for payment of home health services that are certified by a nurse practitioner, a clinical nurse specialist, a certified nurse-midwife or a physician assistant. Previously, a physician was required to certify this service. This provision will go into effect six months after enactment of the Act.
  • Waiving of patient liability amounts associated with COVID-19 diagnostic tests and vaccines (when available). Also permits states to extend Medicaid eligibility to uninsured populations for these same tests.
  • The CARES Act expands the definition of an uninsured individual to include individuals whose plan does not have minimum essential coverage under the ACA requirements.
  • Reauthorizes and provides funding for four years for three HRSA grant programs: Rural Health Care Service Outreach, Rural Health Network Development and Small Health Care Provider Quality Improvement.

Relief Packages

For more on Small Business Administration Loans (SBA Loans), the Payroll Protection Program, and Economic Injury Disaster Loans check out our COVID-19 Resource page.

COVID-19 Resources

For a full explanation of options, view our CARES Act webinar.

CARES Act Webinar