On July 17, 2020, the Department of Health and Human Services (HHS) received an additional $10 billion in additional COVID-19 relief. The Provider Relief Fund includes targeted support for providers impacted by COVID-19. The deadline for dentists to apply for financial assistance through the HHS Enhanced Provider Relief Fund has been extended from July 24, 2020 to August 3, 2020.
Previously, the Enhanced Provider Relief Fund was set aside for Medicaid, Medicaid Managed Care, and Children’s Health Insurance Program (CHIP) providers that experienced a loss in revenue due to the COVID-19 pandemic. It has now been opened up to dental providers that may not provide care for Medicare or Medicaid patients. HHS has created a curated list of dental practice Taxpayer Identification Numbers (TINs) to identify which practices are eligible for funds.
The formula for calculating the payments is two percent of total revenue multiplied by the percentage of revenue stemming from direct patient care. The funds are reportable as taxable income, unless the entity is a tax-exempt provider, and must be used for COVID-19 related expenses or reimburse for lost revenue related to COVID-19. Recipients will need to submit documents to show that funds were used for increased healthcare-related expenses or lost revenue and that they were not reimbursed by other sources (the Paycheck Protection Program or Economic Injury Disaster Loans, for example).
To apply, dental providers must meet the following requirements:
- Must not have received payment from the initial $50 billion Medicare-focused General Distribution or the initial $15 billion Medicaid/CHIP distribution
- Must have directly a) billed Medicaid on or before December 31, 2019, or b) are a dental service provider who has directly billed health insurance companies for oral healthcare-related services or c) are a licensed dental service provider who does not accept insurance and has directly billed patients for oral health-care related services
- Must have either a) filed a federal income tax return for fiscal years 2017, 2018, or 2019 or b) be an entity exempt from the requirement to file a federal income tax return and have no beneficial owner that is required to file a federal income tax return (e.g., a state-owned hospital or health care clinic)
- Must have provided patient dental care after January 31, 2020
- Must not have permanently ceased providing patient dental care directly, or indirectly through included subsidiaries
- Must have gross receipts or sales, if the applicant is an individual, from providing patient dental care reported on Form 1040, Schedule C, Line 1, excluding income reported on a W-2 as a (statutory) employee
The application will require basic information, such as TIN, entity type, and address. It will also require gross revenues, projected lost revenues, and increased expenses related to COVID-19. Additionally, the application will call for information on the payer mix, so be prepared with what percentage of the practice’s patients are Medicare, Medicaid, Commercial Insurers, Self-Pay, and Government Insurers. The application will also request the number of full-time employees. Requested documents include income tax returns and payroll reports.
After determining eligibility and reviewing terms and conditions, practices should consider applying sooner rather than later as funds are limited and applicants have experienced delays in the TIN verification portion of the application.
Aldrich is Here to Help
The demand for economic assistance for dental practices is high and we recommend applying quickly to increase your chances of receiving aid. If you need assistance in applying or have questions about eligibility, please contact your Aldrich Advisor. We are monitoring the effects of COVID-19 closely and will continue to provide updates. For more resources, please visit our COVID-19 Resource Center.
- HHS’ FAQs for CARES Act Provider Relief Fund for Dentists Distributions
- California Dental Association
- American Dental Association
- IRS Taxation on Provider Relief Funds
- CARES Act Provider Relief Fund Payment Attestation Portal
- CARES Act Provider Relief Fund’s Terms and Conditions
This article is a broad overview of options available for small business loans in response to COVID-19 and provides general information to our clients and friends. It should not be relied upon for legal advice.
Meet the Author
Hannah Swan, CPA
Aldrich CPAs + Advisors LLP
Hannah Swan specializes in helping doctors and dentists across the United States in the areas of taxation, accounting, financial planning, and consulting. She has actively focused on helping businesses and individuals achieve their goals since 2008. Prior to joining Aldrich, Hannah concentrated on the financial services and non-profit industries. She has her bachelor’s degree in... Read more Hannah Swan, CPA
- Certified Public Accountant