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COVID-
19 emergency funding for FQHCs: What you need to know

03.24.20

The Coronavirus Preparedness and Response Supplemental Appropriations Act, 2020, which provides $8.3 billion in emergency funding for federal agencies to respond to the COVID-19 outbreak, has earmarked $100 million for FQHCs to prevent, prepare for, and respond to the COVID-19 national emergency. Pre-award costs will be supported by this funding and may date back to January 20, 2020. We recommend tracking your expenditures related to the coronavirus to the best of your ability. This may be helpful or necessary in providing your organization much needed financial relief.  

As a reminder, FQHCs cannot bill Medicare for telehealth services under the PPS rate. Telehealth can be billed to Medicare under Part B with the FQHC as an originating site and reimbursement is approximately $26. If you do not have home visits on Form 5, be sure to add home visits to 5C as soon as possible.

Amidst rapid hourly changes in contending with the coronavirus and its far-reaching impacts, we are sharing some HRSA and CMS guidance that may be helpful to you: 

Here is a link to HRSA FAQs related to COVID-19

Although we are working remotely, we are available to support you. If you have any questions or concerns, please do not hesitate to reach out to any of us.

Related Professionals

Principals

Read this if you are a director, manager, or administrator at a Federally Qualified Health Centers (FQHC) or Rural Health Clinic (RHC).

The latest COVID-19 bill, the Coronavirus Aid, Relief, and Economic Security (CARES) Act included enhancing Medicare telehealth services for FQHCs and RHCs. This legislation waives the Section 1834(m) restriction on FQHCs and RHCs that prohibits them from serving as distant sites. This means during the COVID-19 State of Emergency, FQHCs and RHCs will be able to serve as distant sites to provide telehealth services to patients in their homes and other eligible locations. The legislation will reimburse FQHCs and RHCs at a rate that is similar to payment for comparable telehealth services under the physician fee schedule (Medicare Part B). FQHCs and RHCs will not be paid the Medicare PPS rate for these services.

Currently, Medicare, unlike many Medicaid programs and commercial payers, still requires the video component for telehealth. Effective immediately, the Office for Civil Rights at the Department of Health and Human Services will exercise its enforcement discretion and will not impose penalties for noncompliance with the regulatory requirements under the HIPAA Rules against covered health care providers in connection with the good faith provision of telehealth during the COVID-19 State of Emergency. Providers who want to use audio or video communication technology to provide telehealth during the COVID-19 State of Emergency can use any non-public facing remote communication product that is available to communicate with patients. Examples of acceptable platforms (non-public facing) include Apple FaceTime, Google G Suite Hangouts Meet, and Skype for Business.

We would also like to remind you of the ability to bill for virtual communication services. Virtual communication services are a brief, non-face-to-face check-in with a patient via communication technology, to assess whether the patient's condition necessitates an office visit. The call must be initiated by the patient and to be billable, the call must be between the patient and a physician, nurse practitioner, physician assistant, certified nurse midwife, clinical psychologist, or clinical social worker. If the discussion is conducted by a nurse, health educator, or other clinical personnel, it is not billable as a virtual communication service. There is no video component required for virtual communication services. The check-in cannot relate to a visit with the patient during the previous seven days or result in a visit with the patient within the next 24 hours (or next available appointment). Read the FAQs from Medicare on the virtual communication services.

We continue to be here to support you. If you have any questions or concerns, please do not hesitate to reach out to any of us. 

Article
The CARES Act and telehealth services for FQHCs

Read this if your CFO has recently departed, or if you're looking for a replacement.

With the post-Covid labor shortage, “the Great Resignation,” an aging workforce, and ongoing staffing concerns, almost every industry is facing challenges in hiring talented staff. To address these challenges, many organizations are hiring temporary or interim help—even for C-suite positions such as Chief Financial Officers (CFOs).

You may be thinking, “The CFO is a key business partner in advising and collaborating with the CEO and developing a long-term strategy for the organization; why would I hire a contractor to fill this most-important role?” Hiring an interim CFO may be a good option to consider in certain circumstances. Here are three situations where temporary help might be the best solution for your organization.

Your organization has grown

If your company has grown since you created your finance department, or your controller isn’t ready or suited for a promotion, bringing on an interim CFO can be a natural next step in your company’s evolution, without having to make a long-term commitment. It can allow you to take the time and fully understand what you need from the role — and what kind of person is the best fit for your company’s future.

BerryDunn's Kathy Parker, leader of the Boston-based Outsourced Accounting group, has worked with many companies to help them through periods of transition. "As companies grow, many need team members at various skill levels, which requires more money to pay for multiple full-time roles," she shared. "Obtaining interim CFO services allows a company to access different skill levels while paying a fraction of the cost. As the company grows, they can always scale its resources; the beauty of this model is the flexibility."

If your company is looking for greater financial skill or advice to expand into a new market, or turn around an underperforming division, you may want to bring on an outsourced CFO with a specific set of objectives and timeline in mind. You can bring someone on board to develop growth strategies, make course corrections, bring in new financing, and update operational processes, without necessarily needing to keep those skills in the organization once they finish their assignment. Your company benefits from this very specific skill set without the expense of having a talented but expensive resource on your permanent payroll.

Your CFO has resigned

The best-laid succession plans often go astray. If that’s the case when your CFO departs, your organization may need to outsource the CFO function to fill the gap. When your company loses the leader of company-wide financial functions, you may need to find someone who can come in with those skills and get right to work. While they may need guidance and support on specifics to your company, they should be able to adapt quickly and keep financial operations running smoothly. Articulating short-term goals and setting deadlines for naming a new CFO can help lay the foundation for a successful engagement.

You don’t have the budget for a full-time CFO

If your company is the right size to have a part-time CFO, outsourcing CFO functions can be less expensive than bringing on a full-time in-house CFO. Depending on your operational and financial rhythms, you may need the CFO role full-time in parts of the year, and not in others. Initially, an interim CFO can bring a new perspective from a professional who is coming in with fresh eyes and experience outside of your company.

After the immediate need or initial crisis passes, you can review your options. Once the temporary CFO’s agreement expires, you can bring someone new in depending on your needs, or keep the contract CFO in place by extending their assignment.

Considerations for hiring an interim CFO

Making the decision between hiring someone full-time or bringing in temporary contract help can be difficult. Although it oversimplifies the decision a bit, a good rule of thumb is: the more strategic the role will be, the more important it is that you have a long-term person in the job. CFOs can have a wide range of duties, including, but not limited to:

  • Financial risk management, including planning and record-keeping
  • Management of compliance and regulatory requirements
  • Creating and monitoring reliable control systems
  • Debt and equity financing
  • Financial reporting to the Board of Directors

If the focus is primarily overseeing the financial functions of the organization and/or developing a skilled finance department, you can rely — at least initially — on a CFO for hire.

Regardless of what you choose to do, your decision will have an impact on the financial health of your organization — from avoiding finance department dissatisfaction or turnover to capitalizing on new market opportunities. Getting outside advice or a more objective view may be an important part of making the right choice for your company.

BerryDunn can help whether you need extra assistance in your office during peak times or interim leadership support during periods of transition. We offer the expertise of a fully staffed accounting department for short-term assignments or long-term engagements―so you can focus on your business. Meet our interim assistance experts.

Article
Three reasons to consider hiring an interim CFO

Read this if your company is considering outsourced information technology services.

For management, it’s the perennial question: Keep things in-house or outsource?

For management, it’s the perennial question: Keep things in-house or outsource? Most companies or organizations have outsourcing opportunities, from revenue cycle to payment processing to IT security. When deciding whether to outsource, you weigh the trade-offs and benefits by considering variables such as cost, internal expertise, cross coverage, and organizational risk.

In IT services, outsourcing may win out as technology becomes more complex. Maintaining expertise and depth for all the IT components in an environment can be resource-intensive.

Outsourced solutions allow IT teams to shift some of their focus from maintaining infrastructure to getting more value out of existing systems, increasing data analytics, and better linking technology to business objectives. The same can be applied to revenue cycle outsourcing, shifting the focus from getting clean bills out and cash coming in, to looking at the financial health of the organization, analyzing service lines, patient experience, or advancing projects.  

Once you’ve decided, there’s another question you need to ask
Lost sometimes in the discussion of whether to use outsourced services is how. Even after you’ve done your due diligence and chosen a great vendor, you need to stay involved. It can be easy to think, “Vendor XYZ is monitoring our servers or our days in AR, so we should be all set. I can stop worrying at night about our system reliability or our cash flow.” Not true.

You may be outsourcing a component of your technology environment or collections, but you are not outsourcing the accountability for it—from an internal administrative standpoint or (in many cases) from a legal standpoint.

Beware of a false state of confidence
No matter how clear the expectations and rules of engagement with your vendor at the onset of a partnership, circumstances can change—regulatory updates, technology advancements, and old-fashioned vendor neglect. In hiring the vendor, you are accountable for oversight of the partnership. Be actively engaged in the ongoing execution of the services. Also, periodically revisit the contract, make sure the vendor is following all terms, and confirm (with an outside audit, when appropriate) that you are getting the services you need.

Take, for example, server monitoring, which applies to every organization or company, large or small, with data on a server. When a managed service vendor wants to contract with you to provide monitoring services, the vendor’s salesperson will likely assure you that you need not worry about the stability of your server infrastructure, that the monitoring will catch issues before they occur, and that any issues that do arise will be resolved before the end user is impacted. Ideally, this is true, but you need to confirm.

Here’s how to stay involved with your vendor
Ask lots of questions. There’s never a question too small. Here are samples of how precisely you should drill down:

  • What metrics will be monitored, specifically?
  • Why do the metrics being monitored matter to our own business objectives?
  • What thresholds must be met to notify us or produce an alert?
  • What does exceeding a threshold mean to our business?
  • Who on our team will be notified if an alert is warranted?
  • What corrective action will be taken?

Ask uncomfortable questions
Being willing to ask challenging questions of your vendors, even when you are not an expert, is critical. You may feel uncomfortable but asking vendors to explain something to you in terms you understand is very reasonable. They’re the experts; you’re not expected to already understand every detail or you wouldn’t have needed to hire them. It’s their job to explain it to you. Without asking these questions, you may end up with a fairly generic solution that does produce a service or monitor something, but not necessarily all the things you need.

Ask obvious questions
You don’t want anything to slip by simply because you or the vendor took it for granted. It is common to assume that more is being done by a vendor than actually is. By asking even obvious questions, you can avoid this trap. All too often we conduct an IT assessment and are told that a vendor is providing a service, only to discover that the tasks are not happening as expected.

You are accountable for your whole team—in-house and outsourced members
An outsourced solution is an extension of your team. Taking an active and engaged role in an outsourcing partnership remains consistent with your management responsibilities. At the end of the day, management is responsible for achieving business objectives and mission. Regularly check in to make sure that the vendor stays focused on that same mission.

Article
Oxymoron of the month: Outsourced accountability

Read this is if you are at a healthcare organization and considering telehealth options. 

Given the COVID-19 emergency declaration, telehealth service regulations have been greatly modified to provide flexibility and payment. The guidance on telehealth is very dispersed and can be difficult to navigate. Here are some FAQs based on the many questions we have received. If you have questions related to your specific situation, please contact us. We're here to help.

UPDATED: Are RHCs and FQHCs now eligible as distant site providers for telehealth services? If so, how will they be paid by Medicare?
Yes, the CARES Act includes RHCs and FQHCs as distant sites during the COVID-19 Public Health Emergency (PHE). Distant site telehealth services can be provided by any health care practitioner of the RHC or FQHC within their scope of practice. The practitioners can provide any distant site telehealth service that is approved as a distant site telehealth service under the Physician Fee Schedule (PFS) and from any location, including from the practitioner’s home. CMS has approved an interim payment rate of $92 for RHCs and FQHCs for these services. The rate is based on the average payment for all PFS telehealth services, weighted by the volume of those services paid under the PFS. This rate will apply for services furnished between January 27, 2020 and June 30, 2020. Modifier “95” must be included on the claim. In July 2020, these claims will be automatically reprocessed and be paid at the RHC all-inclusive rate (AIR) and the FQHC prospective payment system (PPS) rate. Reprocessing will begin when the Medicare claims processing system is updated for the new payment rate.

For telehealth distant site services furnished between July 1, 2020 and the end of the COVID-19 PHE, RHCs and FQHCs will need to use RHC/FQHC specific G code, G2025, for services provided via telehealth. These claims will be paid at the $92 rate, not the AIR or PPS rates. If the COVID-19 PHE continues beyond December 31, 2020, the $92 will be updated based on the 2021 PFS average payment rate for these services, again weighted by the volume of those services.

For services in which the coinsurance is waived, RHCs and FQHCs must put the “CS” modifier on the service line. RHC and FQHC claims with the “CS” modifier will be paid with the coinsurance applied, and the Medicare Administrative Contractor (MAC) will automatically reprocess these claims beginning on July 1. Coinsurance should not be collected from beneficiaries if the coinsurance is waived.

UPDATED: Will telehealth visits of any kind affect my FQHC or RHC encounter rate?
Costs associated with telehealth will not affect the prospective payment system rate for FQHCs or the all-inclusive rate calculation for RHCs, but the costs will need to be reported on the cost report. Costs of originating and distant site telehealth services will be reported as follows:

  • Form CMS-222-17 on line 79 (Cost Other Than RHC Services) of Worksheet A for RHCs
  • Form CMS-224-14 on line 66 (Other FQHC Services) of Worksheet A for FQHCs.

What is telehealth versus telemedicine?
Telemedicine refers to a remote clinical service while telehealth is a broader term that embodies a consumer-based approach to medical care, incorporating both delivery of care and education of patients.

UPDATED: What types of service levels are available?
There are three main types of Medicare virtual services with different payment levels. Here are the key things to know for each type:

Telehealth visits

  1. These are considered the same as in-person visits and paid at the same PFS rates as regular, in-person visits.
  2. Pre-existing patient relationship requirements have been waived.
  3. The patient originating site can be any healthcare facility or the patient’s home.

Virtual check-ins

  1. These are brief communications in a variety of technology-based manners.
  2. They do require the patient to initiate and consent to the check-in.
  3. It cannot be preceded by a medical visit within the previous 7 days and cannot lead to a medical visit within the next 24 hours. 
  4. A pre-existing relationship with the patient is required.
  5. Common billing codes include HCPCS code G2012 (telephone) and G2010 (captured video or images).

E-visits:

  1. These also need to be initiated by the patient in order to be billable and would be conducted using online patient portals (no face-to-face), for example.
  2. A pre-existing relationship with the patient is required.
  3. Common billing codes include CPT codes 99421-99423 and HCPCS codes G2061-G2063. 

The payment rate for these services will be $24.76 beginning March 1, 2020, through the end of the PHE, instead of the CY 2020 rate of $13.53, and should be billed using code G0071. MACs will automatically reprocess any claims with G00771 furnished on or after March 1, 2020, that were not paid at the new rate.

What codes can be billed as telehealth services?
Here is the listing effective as of March 1, 2020. 

Since this time, 85 additional codes have been added. Click here for the list. 

Do we need to request an 1135 waiver or are these changes covered by a blanket waiver from CMS?
A blanket waiver is in effect, retroactive to March 1, 2020 though the end of the emergency declaration. 

Is patient consent required?
Yes, patients must verbally consent to services. This includes brief telecommunications (which currently have a cost share for Medicare). We recommend it for all payers as a best practice.

Is there additional information expected from Medicare?
Yes, Medicare, Medicaid, and other payers are continually updating their guidance. 

What can we bill for telehealth services for Medicaid and insurance carriers?
This is the most problematic to track as it is continually evolving and every state and carrier is different. Providers must understand each payor’s requirements around audio and video, allowable CPT/HCPCS codes, modifiers, and place of service codes. As you have questions, please reach out to us so we can be sure to provide the most current answer.

Resources
Given how quickly information related to telehealth is changing, please feel free to contact us for the latest resources. 

Article
Telehealth FAQs

BerryDunn’s Healthcare/Not-for-Profit Practice Group members have been working closely with our clients as they navigate the effect the COVID-19 pandemic will have on their ability to sustain and advance their missions.

We have collected several of the questions we received, and the answers provided, so that you may also benefit from this information. We will be updating our COVID-19 Resources page regularly. If you have a question you would like to have answered, please contact Sarah Belliveau, Not-for-Profit Practice Area leader, at sbelliveau@berrydunn.com.

The following questions and answers have been compiled into categories: stabilization, cash flow, financial reporting, endowments and investments, employee benefits, and additional considerations.

STABILIZATION
Q: Is all relief focused on small to mid-size organizations? What can larger nonprofit organizations participate in for relief?
A:

We have learned that there is an as-yet-to-be-defined loan program for mid-sized employers between 500-10,000 employees. You can find information in the Loans Available for Nonprofits section (link below) of  the CARES Act as well as on the Independent Sector CARES Act web page, which will be updated regularly.

Q: Should I perform financial modeling so I can understand the impact this will have on my organization? Things are moving so fast, how do I know what federal programs are available to provide assistance?
A:

The first step in developing a short-term model to navigate the next few months is to gain an understanding of the programs available to provide assistance. These resources summarize some information about available programs:

Loans Available for Nonprofits in the CARES Act
Families First Coronavirus Response Act (FFCRA): FAQs for Businesses
CARES Act Tax Provisions for Not-for-Profit Organizations

The next step is to develop scenarios ranging from best case to worst case to analyze the potential impact of revenue and/or cost reductions on the organization. Modeling the various options available to you will help to determine which program is best for your organization. Each program achieves a different objective – for instance:

  • The Paycheck Protection Program can assist in retaining employees in the short term.
  • The Emergency Economic Injury Grants are helpful in covering a small immediate liquidity need.
  • The Small Business Debt Relief Program provides aid to those concerned with making SBA loan payments.

Additionally, consider non-federal options, such as discussing short-term deferrals with your current bank.

Q: How should I create a financial forecast/model for the next year?
A:

If you have the benefit of waiting, this is likely a time period in which it makes sense to delay significant in-depth forecasting efforts, particularly if your business environment is complicated or subject to significantly volatility as a result of recent events. The concern with beginning to model for future periods, outside of the next three-to-six months, is that you’ll be using information that is incomplete and ever-changing. This could lead to snap judgments that are short-term in nature and detrimental to long-term planning and success of your organization. 

With that said, we recognize that delaying this analysis will be unsettling to many CFOs and business managers who need to have a strategy moving forward. In developing this model for next year, consider the following elements of a strong model:

  1. Flexible and dynamic – Allow room for the model to adapt as more information is available and as additional insight is requested by your constituents (board members, department heads, lenders, etc.).
  2. Prioritize – Start with your big-ticket items. These should be the items that drive results for the organization. Determine what your top two to three revenue and expense categories are and focus on wrapping your arms around the future of those. From there, look for other revenue and expense sources that show correlation with one of the big two to three. Using a dynamic model, these should be automatically updated when assumptions on correlated items change. Don’t waste time on items that likely don’t impact decision making. Finally, build consensus on baseline assumptions, whether it be through management or accounting team, the board, or finance committee.
  3. Stress-test – Provide for the reality that your assumptions, and thus model, will be wrong. Develop scenarios that run from best-case to worst-case. Be honest with your assumptions.
  4. Identify levers – As you complete stress-testing, identify your action plan under different circumstances. What are expenditures that can be deferred in a worst-case scenario? What does staffing look like at various levels?
  5. Cash is king – The focus on forecasting and modeling is often on the net income of the organization and the cash flows generated. In a time such as this, the exercise is likely to focus on future liquidity. Remember to consider your non-income and expense items that impact cash flow, such as principal payments on debt service, planned additions to property & equipment, receipts on pledge payments, and others.  
CASH FLOW
Q: How can I alleviate cash flow strain in the near term?
A:

While the House and Senate have reacted quickly to bring needed relief to individuals and businesses across the country, the reality for most is that more will need to be done to stabilize. Operationally, obvious responses in the short term should be to eliminate all nonessential purchasing and maximize the billing and collection functions in accounts receivable. Another option is to utilize or increase an existing line of credit, or establish a new line of credit, to alleviate short term cash flow shortfalls. Organizations with investment portfolios can consider the prudence of increasing the spending draw on those funds. Rather than making a few drastic changes, organizations should take a multi-faceted approach to reduce the strain on cash flow while protecting the long term sustainability of the mission.

Q: How can I increase my organization’s reach to help with disaster relief? If we establish a special purpose fund, what should my organization be thinking about?
A:

Many organizations are looking for ways to increase their direct impact and give funding to individuals or organizations they may not have historically supported. For those who are want to expand their grant or gift making or want to establish a disaster relief fund, there are things to consider when doing so to help protect the organization. The nonprofit experts at Hemenway & Barnes share their thoughts on just how to do that.

FINANCIAL REPORTING
Q: What accounting standards have been delayed or are in the process of being delayed?
A:

FASB:
The $2.2 trillion stimulus package includes a provision that would allow banks the temporary option to delay compliance with the current expected credit losses (CECL) accounting standard. This would be delayed until the earlier end of the fiscal year or the end of the coronavirus national emergency.

GASB:
On March 26, 2020, the Governmental Accounting Standards Board (GASB) announced it has added a project to its current technical agenda to consider postponing all Statement and Implementation Guide provisions with an effective date that begins on or after reporting periods beginning after June 15, 2018. The GASB has received numerous requests from state and local government officials and public accounting firms regarding postponing the upcoming effective dates of pronouncements as these state and local government offices are closed and officials do not have access to the information needed to implement the Statements. Most notably this would include Statement No. 84, Fiduciary Activities, and Statement No. 87, Leases.

The Board plans to consider an Exposure Draft for issuance in April and finalize the guidance in May 2020.

ENDOWMENTS AND INVESTMENTS 
Q: What should I consider with regard to endowments?
A:

Many nonprofits with endowments are considering ways to balance an increased reliance on their investment portfolios with the responsibility to protect and preserve the spending power of donor-restricted gifts. Some things to think about include the existence (or absence) of true restrictions, spending variations under the Uniform Prudent Management of Institutional Funds Act (UPMIFA) applicable in your state, borrowing from an endowment, or requesting from the donor the release of restrictions. All need to be balanced with the intended duration and preservation of the endowment fund. Hemenway & Barnes shares their thoughts relative to the utilization of endowments during this time of need.

EMPLOYEE BENEFITS
Q: We are going to suspend our retirement plan match through June 30, 2020 and I picked a start date of April 1st. What we need help with is our bi-weekly payroll (which is for HOURLY employees). Their next pay date is April 3rd, for time worked through March 28th. Time worked March 29-31 would be paid on April 17th. How should we handle the match during this period for the hourly employees?
A:

The key for determining what to include for the matching calculation is when it is paid, not when it was earned. If the amendment is effective April 1st, then any amounts paid after April 1st would not have matching contributions calculated. This means that the amounts paid on April 3rd would not have any matching contributions calculated.

Q: Can you please provide guidance on the Families First Coronavirus Response Act (FFCRA) and how it may impact my organization?
A:

On March 30th, BerryDunn published a blog post to help answer your questions around the FFCRA.

If you have additional questions, please contact one of our Employee Benefit Plan professionals

ADDITIONAL CONSIDERATIONS
Q: I heard there was going to be an incentive for charitable giving in the new act. What's that all about?
A:

According to Sections 2204 and 2205 of the CARES Act:

  • Up to $300 of charitable contributions can be taken as a deduction in calculating adjusted gross income (AGI) for the 2020 tax year. This will provide a tax benefit even to those who do not itemize.
  • For the 2020 tax year, the tax cap has been lifted for:
    • Individuals-from 60% of AGI to 100%
    • Corporations-annual limit is raised from 10% to 25% (for food donations this is raised from 15% to 25%)
Q: Have you heard if the May 15th tax deadline will be extended?
A:

Unfortunately, we have not heard. As of April 6th, the deadline has not been extended.

Q: Could you please summarize for me the tax provisions in the CARES Act that you think are most applicable to not-for-profits?
A: Absolutely! Our not-for-profit tax professionals have compiled this document, which provides a high-level outline of tax provisions in the CARES Act that we believe would be of interest to our clients.

We are here to help
Please contact the BerryDunn not-for-profit team if you have any questions, or would like to discuss your specific situation.

Article
COVID-19 FAQs—Not-for-Profit Edition