Financial Aid to Sustain Doctors’ Practices Amid COVID-19
APRIL 10, 2020 — The American Medical Association (AMA) along with scores of specialty and state medical societies are asking the Trump administration to help the nation’s clinicians out with an immediate cash infusion that they say they need to sustain their practices, many of which have been crippled by the COVID-19 crisis.
In an April 7 letter to Secretary of US Department of Health and Human Services (HHS) Alex Azar, the AMA, backed by 137 medical groups, made the case for “immediate financial assistance” from the government for all US physicians and nurse practitioners and physician assistants enrolled in Medicare or Medicaid. These payments would be equal to roughly 1 month’s worth of prepandemic revenue from all payers.
Under the methodology laid out in the letter, HHS would use an individual clinician’s average monthly Medicare payment from October to December 2019 to determine their precrisis monthly revenue.
Because Medicare business generates an average of 35% of practice revenue in most specialties, the letter suggests that HHS triple the monthly Medicare payment to calculate the amount of emergency funding it should provide to each clinician.
The letter acknowledges that this approach wouldn’t work for certain specialties, such as psychiatry, allergy/immunology, obstetrics/gynecology, and pediatrics, which derive far less revenue from Medicare than other specialties do. These physicians’ payouts “should be adjusted upward accordingly,” the letter states.
“Physicians are continuing to put their patients’ needs first to combat this unprecedented public health emergency,” the AMA writes. “We urge you to support them against financial peril while they put their lives and businesses at risk.”
Other Emergency Funding Programs
These disbursements would be separate from the $30 billion in direct provider payments announced on April 7 by Seema Verma, the administrator of the Centers for Medicare and Medicaid Services (CMS). Because these payments are based on Medicare volume, the vast majority of this money is expected to go to hospitals.
The government is also providing financial support to hospitals, physicians, and other clinicians affected by the pandemic through CMS’s accelerated/advance payment program, as reported by Medscape Medical News . Physician practices can apply to receive upfront payments equal to 3 months’ worth of their historical Medicare payments, but they must pay back these loans, starting at 120 days after receiving them.
In addition, providers with less than 500 employees can apply for Small Business Administration (SBA) loans that were authorized by the CURES Act. If they use at least 75% of this money to cover payroll costs, the loans will be forgiven.
Medical leaders defended their request for direct physician relief in excess of what these three government programs are offering.
“From the very beginning, the AMA has been advocating for [financial] support for physician practices,” AMA President Patrice Harris, MD, told Medscape Medical News. “It’s not an either/or, it’s not a choice between hospitals or physician practices, it’s both.”
She made it clear that this applied not only to the direct payments that the CURES Act allocated to healthcare providers, but also to the SBA loans.
“We’ve been pleased to see support through the Small Business Administration, and we know that many practices have applied for loans,” Harris said. “We’ll review this, because physician practices have to be included.”
Thus far, she added, “I haven’t heard of anyone [in a medical practice] who has actually received a loan. We’ll be monitoring that, because that will be key.”
Likewise, Robert Doherty, senior vice president of governmental affairs and public policy for the American College of Physicians (ACP), said he hadn’t heard of any practices receiving SBA loans, although many have applied.
What he has heard is that “people couldn’t even get through the SBA process and the website was freezing up. They also have to find a lender, submit documentation and get approved by the lender. And they’re competing with all the other small businesses” for a finite amount of money.
Doherty said it was unclear how many practices have received advance payments from CMS so far. CMS said it disbursed $34 billion in these payments in the first week of the program. These went to over 17,000 of the more than 25,000 applicants, CMS noted.
The ACP — which joined the AMA in its request to HHS — supports the advanced-payment program, Doherty added, but “a loan is a loan. You have to repay it. It brings in cash now, but it means you don’t have cash a few months from now. That’s different from what we’re recommending, which is an infusion of cash to practices that wouldn’t have to be repaid.”
Another advantage of the AMA-led proposal, he said, is its simplicity. It’s based on data that CMS already has, and it doesn’t require physicians to fill out forms or provide documents.
In contrast, he said, “We don’t think HHS would have the ability to process applications from thousands and thousands of physicians [for direct payments]. To create a situation where they’d have to review applications from physicians for funding out of that [CARES Act] emergency fund is probably almost impossible for HHS to administer effectively.”
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Most Practices Need Help
While the medical societies’ letter makes a strong pitch for supporting physicians who are combatting COVID-19, Harris and Doherty noted that physicians in all kinds of practice situations desperately need this help.
“We’ve heard from many physician practices that they have trouble making payroll,” Doherty said. “Many of them are not seeking any money out of the practices for themselves right now. They’re just trying to keep their staff employed. And some will shut their doors, unless there’s a significant and immediate infusion of money to them. From a healthcare capacity viewpoint, it’s not going to be to anyone’s benefit to see a substantial number of practices laying off staff or closing up entirely because they don’t have the money coming in to keep the doors open,” he said.
Harris agreed. “We’re hearing from practices large and small all over the country, including solo practices. Even the larger practices are losing revenue,” she pointed out. “They appropriately shut down their offices or reduced their hours. They didn’t want to contribute to the further spread of COVID-19.”
Rural practices and those launched by young physicians are facing especially difficult challenges, Harris added, and some may not make it.
It’s also important for policy makers to look ahead to what lies after the pandemic, she said. “We will come out of this, but when we come out of it there will be a lot of pent-up or unmet need where folks delayed necessary visits. Physicians and practices will have to be ready to go. If practices have to furlough some staff, it’s going to take time to ramp that up. So we’re glad to see support of physician practices so the infrastructure is strong when we start again.”
What happens if HHS turns down the medical societies’ request? “We’re hopeful that the [HHS] secretary will agree to what we’re asking,” Doherty said. While it’s always possible to ask Congress to intervene in the next stimulus bill, he said, that wouldn’t happen fast enough to get the money to physicians when they really need it.
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