PPP Standing in the Way of Healthcare Mergers and Acquisitions

fhlfhealthcaretransactionsduringpandemic

fhlfhealthcaretransactionsduringpandemicBy: Susan St. John

The trend that we are seeing affects both buyers and sellers in the health care sector with respect to entities that have received cash infusions from the Paycheck Protection Program (“PPP”) created pursuant to the CARES Act in response to COVID-19. Mergers and acquisitions can come to a significant slowdown, standstill or be terminated altogether if careful planning is not performed to account for the impact the PPP funds received by a healthcare target or seller will have on an anticipated merger or acquisition.  While tax and legal considerations have typically followed along with the merger or acquisition and these considerations are important aspects of any merger or acquisition, they have taken a forefront position when it comes to planning for a change of ownership when the healthcare target or seller has received PPP funds.

As we learned earlier, health care entities requested and received PPP funds to sustain them during the public health emergency caused by COVID-19, allowing them to avoid a virtual economic shut-down. These funds were a welcome relief to keep health care entities afloat financially, providing a way to cover certain expenses such as a) payroll costs, b) rent, c) interest on any covered mortgage obligation (which shall not include any prepayment of or payment of principal on a covered mortgage obligation), and d)  utilities. Using the PPP funds on these expenses allows for a recipient of the PPP funds to qualify for loan forgiveness under the PPP. That all seemed like welcome relief at the time.Continue reading

HHS to send $20B to healthcare providers: 5 things to know

fhlf hhs covid update

fhlf hhs covid updateBy: Zach Simpson

HHS announced Oct. 1 that it is sending $20 billion in new funding to healthcare providers to help offset financial strain linked to the COVID-19 pandemic.

Five things to know:

1. Healthcare providers who previously received, rejected or accepted provider relief payments are eligible for the new funding.

2. Providers who were previously ineligible to receive relief funds, such as those who began practicing in 2020, can apply for a portion of the new relief aid.

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The 3 Knocks Coming to your Healthcare Business’ Door Post-Pandemic: The Lawyers, The Regulators; and The Auditors

florida healthcare law firm audits after covidBy: Steven Boyne

When COVID-19 passes and the world begins to return to normal, you can be guaranteed that many of your old “friends” will come to visit you. To minimize future liability, pain and time, you should be preparing today for tomorrow’s visitors:

The Lawyers. Lawyers come in many flavors, and can bring good or bad news. Depending on your initial reaction to the pandemic, and your subsequent actions as the panic started to die down you may see three types of lawyers: (1) Those that represent past or present employees who have lost their job or contracted COVID-19; (2) Those that represent patients who claim malpractice based on the care that you did or did not deliver, and also those patients who assert that they contracted COVID-19 at your office; and finally (3) Those that represent creditors or debtors of your practice. The actions you should take today are many and varied and beyond the scope of this overview, however, you should be asking the following questions of yourself: (i) did you file a claim for business interruption despite the fact that your insurance broker said you were wasting your time? (ii) does your malpractice carrier cover you for liability outside of the normal scope of providing care? (iii) are your documenting your actions throughout the pandemic to demonstrate that you were acting reasonably at a time when you did not have all the facts? (iv) did you look at your business insurance policies for coverage for employee claims, or workers comp claims, or OSHA claims? (v) did you research what other similarly situated companies are doing, as you will most likely be held to the same standards? (vi) did you follow guidance from State and Federal entities? and (vii) did you provide notice during the pandemic to debtors or other parties who have breached their obligations?Continue reading

Maximizing COVID-19 Government Support Dollars

By: Steven Boyne

COVID-19 has devastated the US economy, including many parts of our Healthcare sector. The Federal Government, along with most States, have begun to respond with various financial incentives, ranging from straight out grants to loans, and everything in between. The following is an overview of some of the assistance that is currently available for the Healthcare community, along with some tips that may assist your company in applying, and what you need to do if you are lucky enough to receive some money:

The CARES Act

  • Paycheck Protection Program (the “PPP”). Essentially a grant from the Federal Government for payroll, employee benefits, rent/mortgage, utilities for 8 weeks. This program is available for all small businesses, and is managed through banks and private financial institutions.

TIPS:

  • Apply with multiple financial institutions, and whoever comes through first take the loan/grant;
  • If you receive the money keep excellent records;
  • You can only use the money for W-2 employees, not 1099 contractors;
  • There are strict rules with respect to the number of employees, and their maximum salary. The NUMBER of employees before and after the loan is critical, not the actual employee, so if you laid off someone, you don’t have to hire back that particular person, you can use the money for a new employee who fills the same position; and
  • If you don’t use all the money for payroll etc, don’t worry, you can either pay it back in a lump sum, or pay it back over time at 1% interest.

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Webinar | Virtual Practice Workshop: Turning Challenges into Opportunities

Turning Challenges into Opportunities Webinar
Turning Challenges into Opportunities WebinarHosted by Candela and Crystal Clear Digital Marketing, Florida Healthcare Law Firm attorney Chase Howard will be a panelist.
Back by popular demand, join us for another Virtual Practice Workshop & uncover the growth opportunities you can capitalize on now, while also protecting your practice in today’s disruptive landscape.
AGENDA: 2:00 PM – 3:00 PM | EXPERT ROUNDTABLE Industry influencers share tools, resources & strategies for improving patient engagement, creating treatment demand & taking advantage of growth opportunities to meet the needs of today’s changing climate. Moderators: David Pataca, MSL, LSO, Executive Regional Director, Candela Medical Audrey Neff, Marketing Director, Crystal Clear Presenters: Chase Howard, Attorney, Florida Healthcare Law Firm Ilanit Samuels, Medical Director & PA-C, MCMS, Baumann Cosmetic Dermatology Dr. Tali Arviv, MD, Arviv Medical Aesthetics
3:00 PM – 4:00 PM | SALES & MARKETING STRATEGIES TO STAY RELEVANT DURING COVID-19 Presenter: Audrey Neff, Marketing Director, Crystal Clear

April 21 @ 2:00 pm – 4:00 pm

Free

A Few Nuances to the Paycheck Protection Program Established Pursuant to the CARES Act

By: Susan St. John

The Paycheck Protection Program under the CARES Act (the “Act”) allows a small business to apply for a low interest rate loan to sustain the business during the economic disruption caused by COVID-19. This program focuses on payroll costs as opposed to revenues of the small business. Allowable uses of the PPP loan funds include the following:

  1. Payroll costs;
  2. costs related to the continuation of group health care benefits during periods of paid sick, medical, or family leave, and insurance premiums;
  3. employee salaries, commissions, or similar compensating;
  4. payments of interest on any mortgage obligation (which shall not include any prepayment of or payment of principal on a mortgage obligation);
  5. rent (including rent under a lease agreement);
  6. utilities; and
  7. interest on any other debt obligations that were incurred before the covered period.

The Act defines payroll costs as follows:

  1. the sum of payments of any compensation with respect to employees that is a:
    1. salary, wage, commission, or similar compensation;
    2. payment of cash tip or equivalent;
    3. payment for vacation, parental, family, medical, or sick leave;
    4. allowance for dismissal or separation;
    5. payment required for the provision of group health care benefits, including insurance benefits;
    6. payment of any retirement benefit; or
    7. payment of State or local tax assessed on the compensation or employees; and
  2. the sum of payments of any compensation to or income of a sole proprietor or independent contractor that is a wage, commission, income, net earnings from self-employment, or similar compensation and that is in an amount that is not more than $100,000 in 1 year, as prorated for the covered period; and shall not include the compensation of an individual employee in excess of an annual salary of $100,000, as prorated for the covered period; taxes imposed or withheld under chapters 21, 22, or 24 of the Internal Revenue Code for the covered period; compensation for employees outside of the US; qualified sick leave wages for which credit is allowed under the Families First Coronavirus Response Act; or qualified family leave wages for which credit is allowed under the Families First Coronavirus Response Act.

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