April 27, 2020 

Get Ready For Round 2 of PPP Loans 
Congress Injects $310 Billion More Into Wildly Popular Program;
We're Still Waiting for Specifics on Forgiveness From the SBA

As always, check our COVID-19 RESOURCE CENTER
at  https://www.aprx.org/home/covid-19-resource-center 
for constantly updating news, guidelines & resources.

Pharmacies are getting a second shot at applying for Paycheck Protection Program loans starting today (April 27) after Congress approved an additional $310 billion in funds for the program last week. The Small Business Administration (SBA) announced that it is again accepting applications for PPP Loans as of 10:30 a.m. EDT today. 

Funds from the first $349 billion ran out in just 13 days, and many applicants were shut out in round one because of overwhelmed banks, application processing delays and SBA loan guidelines that were late in coming. With the PPP coffers now replenished, now's the time to apply for the loan if you were unable to secure one the first time.   We encourage you to submit your application as soon as possible if you want the loan, because the funding for the second round also is expected to be quickly depleted.

You can apply for a PPP loan at any FDIC-insured bank, S&L or credit union. It is best to apply at a financial institution where you have an existing business account, because most institutions give first priority to existing customers in processing and submitting applications. Click here to see the SBA's state-by-state list of participating lenders as of April 23.

Paycheck Protection loans can be used for: 
  • Payroll support (including paid sick or medical leave);
  • Employee salaries and wages;
  • Mortgage, rent and utility payments;
  • Insurance premiums; and
  • Other debt obligations (check with your lender for details).
Loan Terms
  • Your loan amount will be 2.5 times the average total monthly payroll costs incurred in the one-year period before the loan is issued.  
  • Borrower and lender fees, as well as most underwriting tests, are waived (collateral and personal guarantees are not required).
  • The fixed interest rate is 1%. 
  • Prepayment penalties are prohibited. 
  • Lenders must defer payments for at least six months.
One of the biggest selling points for PPP loans is that much of the loan may qualify for forgiveness if it is spent under the conditions specified by the SBA. The SBA has so far signaled that 75 percent of the money must be spent on approved payroll costs in the eight weeks following loan funding. No more than 25 percent may be spent on approved rent, mortgage and utility costs.

The SBA has yet to issue final guidance on how loan expenditures must be documented for forgiveness (it is expected to do so this week).

CARES Act Provider Relief Payments (Grants) to Pharmacies

The CARES Act included $100 billion to fund payments to health-care providers who are on the front lines of the fight against COVID-19 -- including pharmacies.
The payments are not loans and do not need to be repaid.

Billing providers who received Medicare fee-for-service (FFS) reimbursements in 2019 are eligible for this initial distribution of $30 billion, and some APRx pharmacies already report that they have received a payment. The amount of the payment you may receive is based on your per-capita share of total Medicare FFS reimbursements in 2019. (Those with large-scale DME operations or LTC practices should receive fairly large payments.) You should receive a Provider Relief payment if you billed Medicare Part B in 2019 for:
  • Covered drugs
  • Covered immunizations
  • DME
  • MTM
  • Diabetes Education 
The payments are being made via ACH to the Medicare routing number and account number you have on file with HHS. The payments will come via Optum Bank with "HHSPAYMENT" as the payment description.

Attestation is Required After Receiving Payment
Within 30 days of receiving the payment, you must sign an attestation confirming receipt of the funds and agreeing to the terms and conditions of payment. Terms and conditions can be found on hhs.gov/providerrelief. If you choose to reject the funds, you still must complete the attestation. The portal will guide you through the attestation process to either accept or reject the funds. Not returning the payment within 30 days of receipt is viewed as acceptance of the Terms and Conditions.

The complete Terms & Conditions are available in the link below, but the basic ones are:
  • You must have billed Medicare in 2019 for covered services;
  • You provided care after Jan. 31, 2020, for patients with actual or possible cases of COVID-19;
  • You have full Medicare billing privileges and are not excluded from participation in Medicare, Medicaid or any other federal health-care programs;
  • You must certify that you will use the payment as reimbursement only for health-care-related expenses or lost revenues that are attributable to coronavirus; 
  • You must certify that you will not use the payment to reimburse expenses or losses that have been reimbursed from other sources (such as an EIDL or PPP loan); and
  • You must submit reports as required by DHHS to ensure compliance with the conditions attached to the payments.