American College Of Surgeons - Inspiring Quality: Highest Standards, Better Outcomes

Financial Resources Available to Assist Surgeons

The Medicare Accelerated and Advance Payments Program

The Medicare Accelerated and Advance Payments Program allowed Medicare participating physicians to receive advances on future anticipated Medicare charges to help in times of economic distress such as the response to COVID-19. This program was suspended in April after nearly 24,000 applications had been approved for advances totaling more than $40 billion.

Originally, those who received advances were set to enter repayment 120 days after issuance of the advance. During repayment 100% of Medicare billed charges would be withheld until the entire amount was repaid. However, in September, Congress included a provision in a budget bill to ease extend the grace period and reduce the percentage of payments withheld. This legislation was signed into law on October 2. Under the terms of the new law, at the request of a physician who received a payment, they can be granted up to a full year before charges are offset to recoup the advance. Once recoupment begins, physicians have up to 15 months to repay the full amount without interest. Withholding is reduced to 25 percent of billed charges the first 11 months and 50 percent of charges for the following 6 months. Any balance remaining 29 months after the loan was made will accrue interest at a new lower rate of 4 percent. ACS will monitor implementation of this new legislation and provide updates here.

More information about Accelerated and Advance Payments can be found here.

Paycheck Protection Program (PPP)

The Paycheck Protection Program closed to new applications on August 8. This program was intended to help businesses with 500 or fewer employees maintain operations and keep their staff on payroll. Loan funds used for the specified allowable purposes such as payroll, mortgage interest, rent or utilities, could be forgiven up to the full amount of the loan. Due to the complexity of this program, Fellows should consider enlisting the services of their professional tax advisor if they have questions about their loan and the loan forgiveness rules.

As of August 8, 2020, (when the program closed), the PPP had approved more than 5,200,000 loans with net proceeds of more than $525 billion. At the time the program closed to new applications, nearly $134 billion of the appropriated $659 billion remained available. 

A list of Frequently Asked Questions about the PPP, prepared by Hart Health Strategies for the American College of Surgeons, can be found here: Small Business – PPP FAQ

PPP Loan Forgiveness

On June 5, the President signed the Paycheck Protection Program (PPP) Flexibility Act, which eased certain restrictions on the PPP. Provisions of the law will relax rules for the PPP giving borrowers more time to spend funds received and to use those funds for a broader set of expenses while still qualifying to have all or a portion of the loan forgiven. Specifically, the PPP Flexibility Act does the following:

  • Extends the period for PPP loans from June 30, 2020, to December 31, 2020.
  • Extends the period for loan forgiveness to the earlier of either 24 weeks after the loan date or December 31, 2020.
  • Extends the rehire exemption date to December 31, 2020, from the previous date of June 30, 2020.
  • Decreases the forgiveness amount attributable to payroll costs from 75 percent to at least 60 percent and allows up to 40 percent to be attributable to non-payroll costs.

On June 17 the SBA and the U.S. Treasury Department announced a revised loan forgiveness application for the PPP. The intent of the changes is to significantly reduce the amount of paperwork required, making the application process more user friendly in accordance with the provisions of the PPP Flexibility Act.

The changes included apply to both the full forgiveness application, (reducing the total number of pages by more than half), and a newly announced three-page EZ application that requires less documentation and fewer calculations. The EZ form applies to borrowers that meet one or more of the following criteria:

  • Are self-employed and have no employees; OR
  • Did not reduce the salaries or wages of their employees by more than 25 percent, and did not reduce the number or hours of their employees; OR
  • Experienced reductions in business activity as a result of health directives related to COVID-19 and did not reduce the salaries or wages of their employees by more than 25 percent.

Both applications give borrowers the option of using the original eight-week covered period if the loan was made before June 5, 2020, or an extended 24-week covered period in accordance with changes made by the PPP Flexibility Act.

Read the SBA press release announcement.

The loan forgiveness application forms can be found here:

Note: The SBA and Treasury have announced that they plan to release information about borrowers who have participated in the PPP in the coming weeks. Plans are to publicly disclose the names of recipients, the amounts they received (broken into ranges of dollar amounts received), and demographic data on the loans exceeding $150,000. It should be noted that personal identification information will be withheld. 

Recipients of PPP loans should note that those business expenses forgiven under PPP loan forgiveness provisions are not business expenses for tax purposes. While the PPP loan program has already noted that amounts forgiven would not count as taxable income to the borrower, the question remained unclear as to the impact on business expense deductions. However, the IRS recently reiterated its guidance that business expenses paid for through PPP loans which would otherwise qualify as tax deductions cannot be ducted if they are paid for using PPP funds which are later forgiven. The ACS continues to urge Fellows who received PPP loans or other assistance to consult with their accountant or attorney.

Economic Injury Disaster Loans (EIDL)

On June 15, the SBA announced that it would begin taking and processing new applications for the EIDL. The EIDL is a two-part program that allows for rapid advances of up to $10,000 (based on the number of employees) as well as loans with favorable terms. Unfortunately, the $20 billion set aside for advances has been expended. According to a SBA report, more than $178 billion in EIDL loans had been approved through August 7. It is recommended that interested parties apply on the SBA website as soon as possible, as funds for this program are limited. 

Provider Relief Funds from the Public Health and Social Services Emergency Fund

Congress has appropriated a total of $175 billion for a Provider Relief Fund meant to reimburse physicians, facilities and others for the unreimbursed costs associated with the coronavirus. There have been multiple disbursements from the provider relief fund available to surgeons.  

UPDATE: On October 1, CMS announced an additional $20 billion in funds as Phase 3 of the program. Applications for this phase will be accepted between October 5 and November 6, 2020. The new Phase 3 General Distribution is intended to ensure that all applying providers have the opportunity to receive 2 percent of annual revenue from patient care plus an add-on payment to account for revenue losses and expenses attributable to COVID-19. This funding opportunity is available both to providers who received or rejected funding from prior opportunities as well as those who entered practice in 2020. Surgeons who have already received the intended 2 percent of total patient care revenue from past phases may be eligible for an add on payment by submitting information on COVID related costs. Factors taken into consideration include changes in operating revenues and operating expenses balanced against any previously received relief fund distributions. Given that funds are limited, surgeons are encouraged to apply as soon as possible. To apply for funding, eligible surgeons should visit this portal. More information is available here.

The new $20 billion Phase 3 distribution from the CARES Act Provider Relief fund follows previous Phase 1 and Phase 2 disbursements totaling $65 billion that were distributed beginning in April. 

HHS continues to update the FAQs and the Terms & Conditions for these payments frequently as it has adapted to the challenges of implementation and announced additional funding opportunities and requirements. We recommend visiting the CARES Act Provider Relief Fund website for the most up-to-date information. Recently, attestation through the online portal has been extended to 90 days after receipt of payment. Originally, physicians and hospitals that received funds were given 30 days to make this attestation. Please note: That failure to return amounts received within 90 days will be viewed as acceptance of the Terms & Conditions.

ACS staff have received multiple reports from Fellows who appear to meet all criteria but have not received funds from either program. Surgeons who believe they are eligible but have not received a payment should contact UnitedHealth Group’s Provider Relations line at 866-569-3522 about eligibility, whether a payment has been issued, and where the payment was sent. Alternately, you can email COVID-19@cms.hhs.gov detailing your concerns and any steps you have taken to qualify.

If you are employed by a hospital or other entity, please note that your payment will be sent to the TIN responsible for billing for your services and will not necessarily be passed along to you. Also note that only one application per TIN is accepted. The ACS encourages surgeons concerned about how payments are being allocated to inquire and discuss this with their employer. It may also be beneficial to have an attorney review the terms of your contract to see if situations like this are addressed.