On the evening of Friday, March 27, President Trump signed into law the Coronavirus Aid, Relief, and Economic Security (CARES) Act—a $2.2 trillion dollar spending bill providing much-needed financial support for businesses and individuals affected by the COVID-19 crisis. While the 880-page CARES Act includes many provisions for tax credits and other incentives to support our economy, this blog post highlights parts of the bill that will immediately benefit rehab therapy organizations—especially small practices and their employees—that are struggling to stay viable during this crisis.

Note: The CARES Act is a lengthy law chock full of provisions to help individuals and businesses survive the crisis. As we’ve begun to dissect those provisions—and as the federal government and agencies have implemented additional measures to support the original legislation—we’ve continually updated this article with more information. This post was last updated May 1, 2020.

blog adblog ad

The Paycheck Protection Program (“PPP”)

The Paycheck Protection Program helps small businesses (i.e., those with fewer than 500 employees) cover payroll expenses and other operating costs from February 15 until June 30, 2020 (in the legislation, this time frame is denoted the “Covered Period”). Small businesses may take out Small Business Administration (SBA) loans for up to $10 million to cover payroll for employees earning up to $100,000 per year. (The formula for individual loan amounts is based on payroll costs.)

Self-employed individuals, sole proprietors, and independent contractors are also eligible for these loans. Borrowers must certify that the loan money is needed specifically because of the current economic disruption—and that it will be used to cover payroll, insurance premiums, mortgage or rent, and utility payments.

Obviously, determining creditworthiness and eligibility will be difficult due to massive crisis-related business interruption. As such, the only loan qualification criteria is whether the borrower was in business—and had employees—on March 1, 2020. Personal guarantee and other credit worthiness requirements are waived for these loans.  

Here are a few other pertinent details about the PPP loans:

  • As long as borrowers use the loans to meet payroll and other eligible operating costs—and they do not cut employee pay—the loan principal is eligible for forgiveness after 10 years. Deductions to the amount forgiven will be applied for borrowers who fail to meet this criteria. For more details, visit the Small Business Investor Alliance website.
  • The interest rate is capped at 4%.
  • There are no prepayment penalties for borrowers who pay the loan ahead of schedule.
  • These loans allow for complete deferment of payments for at least 6 months (but not more than one year).
  • After one year, loans that were not forgiven will carry forward for a maximum term of 10 years at a maximum interest rate of 4%. 

Again, borrowers can only use these loans to cover payroll costs for employees who earn up to $100,000 per year. For more details about SBA loans under the CARES Act, including soon-to-be-released SBA rules and guidance for borrowers, visit this website or check out the SBA’s FAQ. This FAQ is updated frequently and is the best source of information for the ever-evolving PPP rules.

Replenishment of Depleted PPP Funds

As of April 24, 2020, the Paycheck Protection Program and Health Care Enhancement Act was signed into law, authorizing an additional $310 billion in funds available under the Paycheck Protection Program and $60 billion for the Economic Injury Disaster Loan program.

Many small businesses struggled to access PPP loan money before funds ran out on April 15, 2020. Reported problems included:

  • bank websites crashing during the application process,
  • application forms being updated during data input (which caused delays in submission), and
  • small lenders being unable to access the actual loan money.

This fourth round of COVID-19 funding will make it easier for smaller lending institutions and community banks to assist small businesses with obtaining PPP loans.

If your therapy practice meets the PPP loan eligibility requirements—but you were unable to receive a PPP loan previously—we strongly recommend submitting an application for this round of PPP loan disbursements. As of April 27, the SBA was accepting PPP loan applications.

There are several free programs and resources to assist business owners with the application process:

  • The SCORE program provides free mentoring, webinars, and resources for small businesses that need help weathering the crisis.
  • Intuit has free loan calculators to help businesses determine eligibility and calculate forgiveness amounts.
  • The Pronto Income Tax website offers a free spreadsheet you can use to calculate your requested PPP loan amount, as well as a free tutorial on how to apply for the loan.
  • The Arizona Commerce Authority offers a free loan calculator to help calculate the 2.5 times average monthly payroll costs that can be requested.
  • During the first round of PPP loan disbursement, successful applicants applied via lenders with whom they had an existing relationship. Use this tool from the SBA website to determine whether your bank—or another bank you’re familiar with—is a PPP lender.
  • Get your supporting documents ready. The Greater Phoenix Economic Council offers 5 tips for a successful application.

Emergency Economic Injury Loans And Grants

Update: As of May 1, the SBA is no longer accepting applications for this loan program. See the SBA website for more information.

Is your practice in need of fast cash to meet looming payroll obligations or to keep the lights on? Economic Injury Disaster Loans (EIDL) offer a low-interest (up to 3.75%) emergency loan option for small businesses, along with the ability to defer principal and interest payments for four years. These loans provide businesses up to $10,000 within three days of submitting the application, and the funds can be used to cover payroll and other operating expenses that would have been met if not for the crisis. Borrowers who receive an EIDL loan between January 21, 2020, and June 30, 2020, may later refinance that loan into a PPP loan. 

Additionally, the bill allocates $10 billion for EIDL grants, which small businesses, employee-owned businesses, sole proprietors, and independent contractors can use to meet payroll, pay employee sick leave, cover mortgage or rent payments, and pay other operating expenses. These grants are also doled out in increments of up to $10,000, and the best part about them is that they do not have to be repaid. (Please note that businesses that are unable to secure a grant can apply for a loan; however, there is no double-dipping. Additionally, if a business receives an EIDL grant or loan and later applies for a PPP loan, the EIDL amount will be subtracted from the PPP loan.)  

The CARES Act also provides additional relief for businesses that have existing small business loans. For more information about disaster loan options, check out this comprehensive SBA summary of the CARES Act. Also, be sure to watch this free webinar on sustaining your business during the crisis. Check your local Small Business Development Center (SBDC) website to find out how and when you can access an EIDL application.

One last point on these loans: Eligibility for SBA loans, including those described above, are based on the size of the business—including its affiliates. If you are not sure how affiliates are determined, consult a legal or tax advisor.  

Expansion of Net Operating Loss and Business Interest Deductions to Increase Access to Cash

This provision expands the use of net operating losses (NOLs) to provide critical cash flow liquidity during the COVID-19 emergency. When a business loses money during a tax year (e.g, from lost profits or a business expense that exceeds profits), the business can record this loss as an NOL and use it to offset its future taxable income. In other words, if you have a bad year, federal law allows you a tax break in later years to help you recover. Generally, NOLs can only be applied for future years and are capped at 80% of taxable income in any tax period. However, under the CARES Act, businesses may temporarily use NOLs to offset taxable income from the past (2018–2020) and for the next five years. The provision also suspends the taxable income limitation of 80%, thus allowing an NOL to fully offset income.  

What does this mean for your therapy practice? If you were attempting to recover from a few low-profit years, without CARES Act relief, this year’s income loss could pose a formidable barrier for financial recovery. However, the CARES Act provisions allow you valuable tax relief to help rightsize your practice. And if you experience a profit loss this year, NOLs will offer you valuable tax support in 2021 to move your practice’s budget back into the black.

If you are a business owner who has used NOLs previously, then you will appreciate the relief this provision offers. If this is your first experience with NOLs—and your head is spinning from all of the heavy IRS talk—check out this handy Investopedia explanation, and make a note to discuss it with your tax professional as soon as possible.  

Another CARES Act provision helps struggling businesses with debt expand their ability to deduct loan interest paid by increasing the amount that can be deducted. Generally, some businesses can only deduct 30% of their EBITDA (earnings before interest, tax, depreciation, and amortization); however, the CARES Act allows interest deductions of up to 50% EBITDA for 2019 and 2020. Expanding the net interest deduction limitation will increase liquidity for businesses that have debt or must incur more debt during the crisis. Increased liquidity will help the business continue operations and retain employees. For more information, see this summary—and be sure to consult a tax expert.

Employee Retention Tax Credit

The Employee Retention Tax Credit (ERTC) is a 50% refundable payroll tax credit on wages paid up to $10,000 for employers who shut down their business (or partially suspended operations) due to a COVID-19-related government order—or who experienced a decline in gross receipts by more than 50% in 2020. The ERTC helps businesses keep employees on payroll—even after being forced to close or suspend operations. The IRS breaks down all the details regarding the ERTC on its website. Note that employees who are entitled to a refundable tax credit for required paid leave under the Families First Coronavirus Relief Act (FFCA) may not be entitled to the ERTC on the same qualified wages (in other words, no double dipping allowed).

Employer and Self-Employment Social Security Tax

The deadlines for employers to make social security tax payments on 2020 payroll has been extended until 2021 and 2022. For more details about these extensions, check out this law bulletin. If you’re self-employed, a portion of your social security taxes has also been deferred.

Recovery Rebate for Individual Taxpayers (a.k.a. CARES Act Recovery Check)

Taxpayers with an adjusted gross income under $75,000 ($112,500 for heads of household and $150,000 for married couples) will soon receive refundable tax credits of $1,200 for individuals and $2,400 for joint taxpayers in the form of a recovery check. The rebate increases by $500 for each child, with no cap on the number of children who qualify. For more information about the recovery rebate—including rebate projections—see the Senate Committee on Finance FAQ.

Additional Unemployment Insurance 

The CARES Act expands unemployment insurance that is available to self-employed, independent contractors—as well as employees with a limited work history—to an additional $600 per week in benefits for a period of four months. Individuals do not have to be actively seeking work to obtain the expanded benefits, and there is no waiting period. This is especially important for OTs, PTs, and SLPs who:

  • work per diem at different clinics, or
  • are independent contractors who would not typically qualify for unemployment.

Furthermore, the federal government will fund an additional 13 weeks of unemployment benefits—through December 31, 2020—after employees have exhausted their state unemployment benefits. The additional funding is authorized by the Pandemic Unemployment Assistance Program (PUA). Individuals must file for PUA benefits through their state’s unemployment program. The PUA benefits are not payable for unemployment ending after July 31, 2020.

Please note that sole proprietors and independent contractors have reported delays in receiving unemployment under PUA, because state unemployment programs were not ready to accept such a high volume of claims or to cover new types of applicants. However, states are actively addressing those issues by partnering with tech companies to ramp up their website capacity or developing separate platforms for independent contractors.

Additionally, keep in mind that PUA benefits are only available to the unemployed or independent contractors who cannot work due to the pandemic. For more details about the program, including full eligibility criteria, read the Department of Labor guidelines here.

Increased Medicare Payments, Advance Payments, and Telehealth Expansion

Sequestration Suspension

More good news! The Medicare sequestration was set to reduce Medicare payments by 2% for some therapy providers, but the CARES Act halts that reduction from May 1 through December 21, 2020.

Telehealth Opportunities

Additionally, because telehealth has been recognized as a highly valuable care delivery option during the COVID-19 crisis, the CARES Act expands telehealth opportunities by giving the Secretary of Health and Human Services (HHS) authority to add PTs, OTs, and SLPs as telehealth providers under Medicare. This is huge, as CMS has repeatedly squelched past efforts to add rehab therapists to its list of approved telehealth practitioners.

Although it took a few weeks for CMS to act on that authority, we are happy to report that on April 30, 2020, CMS officially authorized OTs, PTs, and SLPs as eligible practitioners for telehealth services, retroactive to March 1, 2020. This means rehab professionals can continue to provide valuable therapy services to Medicare beneficiaries using telehealth—and be reimbursed in the same manner as they would for face-to face visits. Reimbursable telehealth services include audio-only services as well as those conducted via live video. For more information about Medicare coverage of telehealth for rehabilitation therapists, check out the CMS fact sheet. And thank you to all therapists who joined in the advocacy efforts that made Medicare coverage of telehealth possible!

Expedited Medicare Payments  

Update: As of April 26, 2020, CMS is no longer accepting applications for advance payments, and it is reevaluating all new and pending applications for accelerated payments. Learn more about this development here.

During the period of the public health emergency, CMS is authorized to provide accelerated and advance payments to qualifying Medicare Part A and Part B providers and suppliers—including PT, OT, and SLP providers—in order to help mitigate crisis-related disruptions to claims submission and processing. According to this fact sheet, “Most providers and suppliers will be able to request up to 100% of the Medicare payment amount for a three-month period.” To qualify, providers “must:

  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.”

If you are interested in applying for expedited payments, you’ll need to do so through your Medicare Administrative Contractor (MAC). According to the above-cited fact sheet, forms vary by contractor, and each MAC website will provide more details on the application process. The fact sheet includes a MAC directory as well as a step-by-step guide on how to complete your request form.

Once the request is approved, payment will be issued within seven calendar days. Providers who receive advance payments will begin repaying those amounts 120 calendar days after the payment issue date.

Health and Human Services Relief Payments

The CARES Act allocated $100 billion in relief funds to healthcare providers from the Public Health and Social Services Emergency Fund to provide rapid financial relief for healthcare providers located in areas affected by the pandemic. Eligible providers include some PTs, OTs, and SLPs who received Medicare Fee-For-Service reimbursement in 2019. More details about the disbursement of these funds are available on the HHS website. Check back frequently to take advantage of the relief funds available to your practice.

Payments totaling $30 billion were distributed automatically beginning April 10, 2020, and the remaining $70 billion will soon be distributed. Of these funds: $10 billion will go to rural health clinics and hospitals, and $29.6 billion will go to providers who solely treat Medicaid patients in addition to funding reimbursement for underinsured patients. No application was necessary, although providers who accept the funds must agree to the Terms and Conditions—including refraining from balance-billing patients for additional out-of-pocket expenses. For more information about the Terms and Conditions, visit CMS’s attestation portal, located here. Unlike Medicare’s accelerated and advance payments, the HHS relief funds are not a loan, meaning providers don’t have to pay the money back. For more information about the disbursements, see this fact sheet.

Providers who have delivered—or will deliver—services for COVID-19 treatment of uninsured individuals after February 4, 2020, are eligible for reimbursement of services at Medicare rates. PTs, OTs, and SLPs are eligible for reimbursement of claims under this program (this includes reimbursement for telehealth visits). To be eligible, the provider must have checked for health insurance and confirmed the patient was completely uninsured. Providers can submit claims for reimbursement through the HRSA portal, located on the HRSA website. To learn more about this program, as well as register for the program, check out the HRSA website and review the handy step-by-step guide for claims submission to its portal.

Please note that there are many restrictions on these HHS funds—including limitations on how and where the money can be spent. If breached, these restrictions could expose funding recipients to fraud enforcement. So, if you received one of these payments, be sure to check out this DLA Piper legal publication for more information.

Paid Leave for Rehired Workers

Generally, the Family Medical Leave Act (FMLA) requires 12 months of employment before eligibility; however, the Families First Coronavirus Response Act (FFCRA) authorized FMLA leave for employees who were employed at least 30 days. The CARES Act extends FMLA eligibility to rehired employees who:

  • were employed for at least 30 days of the last 60 calendar days prior to the employee’s layoff, and
  • were laid off not earlier than March 1, 2020.

On a related note, the Department of Labor (DOL) released guidance on paid sick leave requirements under FFCRA. As you recall, FFCRA mandates that employers provide employees with paid sick leave or expanded family and medical leave for reasons related to COVID-19. Employers must post notice about the paid sick leave requirements (which can be tricky if your employees are working remotely). Here is a link to the DOL notice and some FAQs regarding the requirements.  

Healthcare Access for Testing and Prevention Services (and Other Useful Provisions)

Employer-sponsored group health plans and individual health plans must cover COVID-19 testing and vaccines (when available) without cost-sharing. Over-the counter medications can be a qualified expense that can be paid using a health savings account (HSA), health flexible savings account (HFSA), or health reimbursement account (HRA). Furthermore, high-deductible plans are not required to impose deductibles on telehealth for plans beginning on after 2021.

Student Loan Relief for Borrowers

Federal student loan payment obligations for eligible loans are suspended through September 30, 2020, and no new interest will accrue on federal student loan balances. The payment suspension will not affect participation in loan forgiveness and loan rehabilitation programs.  

Eligible loans are:

  • Direct subsidized loans
  • Direct unsubsidized loans
  • Direct PLUS loans
  • Direct consolidation loans
  • Federal Family Education Loans

Lenders will notify student loan borrowers about initiating payment suspension as well as payment resumption, which is planned for August 1, 2020.  

And while we are on the topic of suspended payments: Wage, tax, and social security garnishments are all suspended from March 13, 2020, until September 30, 2020.

Employer-Sponsored Student Loan Repayment Programs

Employers who are paying student loans as an employee benefit can provide up to $5,250 in non-taxable loan payments. In other words, no taxes on this amount will be assessed for the employer, and the employee does not have to count the repayment money as income.

Retirement Plan Relief

Individuals who must tap into retirement funds to make ends meet during the COVID-19 crisis may withdraw up to $100,000 without incurring the 10% early withdrawal penalty. Individuals may repay the amount over the course of a three-year period (the retirement distribution is still subject applicable to income tax).  

There is also relief for individuals who do not need to access their retirement now, but have seen their funds deplete due to the stock market downturn associated with COVID-19. The CARES Act suspends the required minimum distribution (RMD) in 2020 to allow IRA and 401(k) accounts some time to recover.


As I mentioned in my intro, the CARES Act is 880 pages long—not including the other COVID-19 emergency response laws—and it contains many valuable provisions to help healthcare providers weather this storm (e.g., expansion of providers authorized to order home health services and expansion of Medicaid money for inpatient, home health, and rehabilitation services). We couldn’t possibly detail all of them out in this blog post, but please check out this NPR article for a broader summary of the CARES Act relief package. Have questions? Leave them in the comment section below, and we’ll do our best to get you an answer!