The Consolidated Appropriations Act, 2021 (the “CAA”), signed into law on December 27, 2020, is the second-largest federal stimulus package of 2020, following the CARES Act. The CAA provides $900 billion in COVID relief and reserves $284 billion for small businesses through a second round of Paycheck Protection Program (“PPP”) forgivable loans, or as some are calling it, PPP2. But relief for businesses does not end at PPP loans. The CAA also provides additional tax deductions and expands the Employee Retention Credit. The SBA published its Interim Final Rules on January 6 (click here to access the IFR rules), implementing the CAA. Like PPP round 1, the SBA will be publishing applications, guidance and FAQs in the coming days, but in the meantime, this article provides an overview of PPP2 and relevant benefits of the CAA.
Reopening of PPP Loan Program
The CAA reopens access to the original PPP for businesses who qualified for a loan but did not receive a loan, and also for businesses who returned all or a portion of the loan. For a borrower who returned all or part of a PPP loan, it may reapply for an amount equal to the difference between amount retained and maximum amount applicable; and for a borrower who did not accept full amount of the loan, it may request modification to increase to the maximum amount applicable.
Second Draw Loans (PP2)
Most notably, the CAA allows for eligible small businesses who took PPP loans to apply for another loan of up to $2 million. To be eligible for PPP2 “second draw loans,” the borrower must:
- Have 300 or fewer employees; and
- Have suffered a 25% or higher reduction in gross receipts during any calendar quarter in 2020 compared to the same quarter in 2019; and
- Have used or will use the full amount of their first PPP loan.
Eligible businesses with multiple locations may qualify for PPP2 provided they employ less than 300 people in each location. SBA size standards still apply, and applicants must still aggregate applicable affiliates when determining if it qualifies as a “small business.” The original waiver of affiliation rules still apply as well. CAA affirms eligibility to certain organizations such as churches and other religious organizations, housing cooperatives with less than 300 employees, certain news organization, but also disqualifies certain organizations such as those business not in operation before February 15, 2020, publicly traded companies, and entities receiving Shuttered Venue Operating Grants under the CAA, to name a few.
To determine amount of the PPP2 loan, an eligible recipient may receive up to 2.5 times the sum of their average monthly payroll costs (capped at $2 million), but entities assigned to NAICS code 72 (Accommodations and Food Services) may receive up to 3.5 times average monthly payroll.
Additional Eligible Expenses and Flexible “Covered Period” for PPP and PPP2
Forgiveness of PPP loan funds still depend on whether the borrower spends the PPP funds for allowable costs during the “covered period.” However, the CAA now allows borrowers to choose a covered period that is at least eight weeks and no more than 24 weeks from the loan origination and expands authorized costs. While 60% of forgivable funds must be spent on payroll, the CAA allows borrowers to use PPP funds for additional expenses. In addition to payroll, rent, utilities, and covered mortgage interests, the CAA authorize PPP funds to be used for:
- Operation Expenditures: defined to include a “payment for any business software or cloud computing service that facilitates business operations, product or service delivery, the processing, payment, or tracking of payroll expenses, human resources, sales and billing functions, or accounting or tracking of supplies, inventory, records and expenses.”
- Property Damage Costs: “a cost related to property damage and vandalism or looting due to public disturbances that occurred during 2020 that was not covered by insurance or other compensation.”
- Supplier Costs: meaning an expenditure made “to a supplier of goods for the supply of goods that (A) are essential to the operations of the entity at the time at which the expenditure is made; and (B) is made pursuant to a contract, order, or purchase order…in effect at any time before the covered period;…or with respect to perishable goods, in effect before or at any time during the covered period.”
- Covered Worker Protection Expenditures: defined to mean “operating or capital expenditure to facilitate the adaptation of the business activities of an entity to comply with requirements established or guidance issued by CDC, HHS, OSHA since March 1, 2020” and until the end date of the national emergency. Examples include PPE, physical alterations to facilities such as barriers, health screening capability, etc.
- CAA clarifies that group insurance payments are considered an allowed payroll cost.
Simplified Loan Forgiveness and Audits
For loans under $150,000, the SBA will provide for a simplified forgiveness application, which is anticipated to be one page and only requires the borrower to provide number of employees the borrower was able to retain because of the loan, total amount of loan spent on payroll, and total loan amount. Although currently, SBA is using Form 3509 and Form 3510 Loan Necessity Questionnaires for loans in excess of $2 Million, the CAA requires the SBA to submit a forgiveness audit plan and reports of covered loans.
Tax Benefits
The CAA expands eligible tax benefits for PPP loan recipients in several important ways.
First, the CAA confirms that eligible business expenses paid with PPP loan proceeds are tax-deductible even if the PPP loan is forgiven. The CARES Act originally provided that forgiveness of a PPP loan would not result in the forgiven amount being included in the taxpayer’s gross income (as would normally be the case with debt forgiveness). The IRS issued Revenue Ruling 2020-27 and Notice 2020-32, in which it took the position that, for expenses paid with a PPP loan that was forgiven, the taxpayer could not also take a business expense deduction because to do so would result in the taxpayer receiving a double tax benefit. The CAA overrides the IRS’s position and explicitly provides that no deduction shall be denied because a PPP loan is forgiven. In response to the CAA, the IRS promptly issued Revenue Ruling 2021-2 in which it declared its prior Revenue Ruling 2020-27 and Notice 2020-32 obsolete and confirmed that otherwise deductible business expenses will be deductible even if they were paid with PPP loan proceeds and the taxpayer’s PPP loan is forgiven. Additionally, such taxpayer’s tax basis in its assets will not be reduced as a result of the forgiveness of the PPP loan.
Second, the CAA significantly expanded the CARES Act’s employee retention tax credit, which employers may now claim even if they receive a PPP loan. However, employers may not both receive an employee retention tax credit and seek PPP loan forgiveness for the same wages. An eligible employer that received a PPP loan and paid qualified wages which exceeded the amount of the forgiven PPP loan used to pay wages may now claim the employee retention tax credit retroactively. We expect guidance from the IRS regarding how employers may retroactively claim the credit.
Additionally, effective January 1, 2021, the following key changes expand the availability of the tax credit:
- Qualified wages paid through June 30, 2021 are now eligible for the credit (previously wages had to be paid before January 1, 2021).
- The credit will be available to businesses: with operations that are either fully or partially suspended by a COVID-19 governmental order for the time period in which the order is in force; or with gross receipts less than 80% of gross receipts for the same quarter in 2019 (the CARES Act previously required gross receipts to be less than 50% of gross receipts for the same quarter in 2019 to trigger initial eligibility for the credit).
- The available credit will increase to 70% of qualified wages plus the associated employer-paid health plan expenses (the CARES Act previously provided for a credit of 50% of qualified wages and health plan expenses).
- The maximum tax credit amount is increased to $7,000 per employee for each of the first two quarters of 2021 for a possible credit of up to $14,000 per employee in 2021. Further, the 2021 tax credit is available even if the employer received the $5,000 maximum credit for the same employee in 2020.
- An eligible employer with 500 or fewer employees may claim the credit for wages paid to all employees even if the employees are working (the CARES Act previously allowed only employers with 100 or fewer employees to take the credit for wages paid to employees who were actively working and permitted employers with greater than 100 employees to take the credit only for wages paid to employees who were not actively working). Employers with more than 500 employees are still limited to claiming the credit only for wages paid to employees who are not working due to the reason the employer qualifies for the credit (i.e., governmental order or reduction in gross receipts). Note that the employer aggregation rules under Internal Revenue Code sections 52 and 414 continue to apply for purposes of determining the number of employees an employer has.
- Certain governmental employers are now eligible for the credit if they otherwise meet the eligibility criteria: public colleges or universities; organizations with a principal purpose of providing medical or hospital care; and certain organizations chartered by Congress (such as federal credit unions).
Applying for Loans
We anxiously await the publication of SBA’s second draw application form, SBA 2483-SD and the reopening of the PPP loan program. Currently, the CAA provides that the PPP and PPP2 loans will be funded through March 31, 2021, and applications will continue to be made through qualified PPP lenders. We anticipate that borrowers will have to make similar if not identical certifications when applying for the second round of PPP loan. New and previous borrowers should consult with their attorneys, tax advisors, and lenders to determine if they qualify for a forgivable PPP loan.
Holistic Billing Services is ready to help these practices resume operations and relieve the pressure of billing and coding so they can tend to their patients in these difficult times. To find out how we can get your acupuncture, massage therapy, or chiropractic practice back up to speed, contact our experienced team today.
As a holistic practice, you want to deliver the best treatments of holistic medicine to your patients – while also ensuring you are paid! To service your patients and grow your holistic business, however, you will want to consider provider credentialing as an in-network provider to bill insurance plans. To be approved, you must meet the numerous medical credentialing requirements for your practice. Besides meeting the requirements, you also must ensure that all the complicated paperwork is filled out accurately and the right documentation is gathered.
Don’t be discouraged, however! There are ways to ensure you’re approved the first time you apply for medical credentialing. Here are some considerations to keep in mind so you have everything you need to know before starting the insurance billing credentialing process.
What is Medical Credentialing?
The process of verifying a healthcare provider’s qualifications for administering care to patients to bill insurance providers, medical credentialing is necessary to receive reimbursements for services. Medical credentialing is a common process for most insurance billing, including many commercial insurance companies, medical groups, surgery centers, or government plans like Veterans Affairs, Medicare, and Medicaid.
Generally, the medical credentialing process involves various applications, forms, and documentation, though the exact requirements vary on the insurance provider. Typically, the provider credentialing process must verify that the medical practice’s documents are current and valid. This can include medical licenses, malpractice insurance, DEA, board certifications, and any other additional information necessary to complete the credentialing process.
What are the Common Challenges in the Medical Credentialing Approval Processs?
Although the medical credentialing process is essential to receive reimbursements, there are many potential issues – and ensuing consequences – that can occur. Since provider credentialing is integral to generate revenue, it’s one of the most important processes for a holistic practice. However, data errors, accidental omissions, or any other hiccups in the process can result in incomplete credentialing and possible financial complications.
Medical practices – holistic or not – lose revenue and waste valuable time and money with common medical credentialing mistakes. So, being aware of the common challenges in the medical credentialing approval process can help avoid these costly errors!
Incomplete Applications
A common mistake that plagues medical practices, sending incomplete provider enrollment applications can set back the provider credentialing process for weeks, if not months. The general application for credentialing requires an extensive amount of paperwork and documentation – all that needs to be filled out correctly. Failure to complete the provider credentialing application accurately can result in lengthy reimbursement delays and denied claims that can negatively impact your bottom line.
While some mistakes are inevitable, ensuring qualified credentialing helps eliminate the margin for human error, saving your holistic practice time and money.
Lack of Organization
An organized practice can lead to inaccurate provider credentialing applications, lost paperwork, or extra time spent on the entire process as a whole. Having all your important paperwork and data where it should be and gathered will avoid any issues in the future, such as claim denials or inaccurate physician contact information.
Proper organization can also make the entire medical credentialing process as efficient as possible, so your holistic practice can focus on the day-to-day operations of delivering services to patients and receiving payments.
Not Updating Information
Even after healthcare providers are credentialed, all provider contact information needs to be kept up to date. Depending on the state in which you practice, licenses and credentials need to be renewed regularly. During the re-credentialing process, having up to date information on every individual practicing, including licenses and contact information, will be important for an efficient and accurate process for your holistic practice.
Besides making the process exponentially easier, keeping up to date with physician licenses will also help avoid potential bad patient outcomes if a physician is practicing without an updated license.
Medical Credentialing Checklist for Holistic Practices
To avoid possible claims denials and lengthy issues, you want to make sure your provider credentialing is as accurate the first time around as possible. Since the medical credentialing process can be lengthy and full of complicated documentation, a checklist can help ensure no important data is missing.
Here are some medical credentialing checklists for holistic practices to help provide an accurate and speedy credentialing outcome! Remember that, depending on the state in which you practice, you may have additional medical credentialing requirements that are not fully covered by the process.
Massage Therapy Credentialing
- Know your state requirements for holistic practices
- Provide your NPI (National Provider Identification)
- List all relevant professional licenses
- Provide any evidence of education or training
- Include all board certifications
- Include DEA certifications
- Malpractice Insurance, if applicable
- Current Competence to Practice certifications
Chiropractic Credentialing
- Know your state requirements for chiropractic holistic practices
- Get your NPI (National Provider Identification)
- Licensure: All practitioners must have and maintain a current, unrevoked, unsuspended, and unimpaired license to practice chiropractic in the state where their holistic practice is
- List education or training
- Practitioners must also complete and maintain all continuing education hours as required
- If your practice performs X-rays, make sure to follow radiographic guidelines and x-ray criteria
- Include all board certifications
- Include DEA certifications
- Malpractice Insurance, if applicable
- Current Competence to Practice certifications
Acupuncture Credentialing
These are essentially the basics for acupuncture credentialing in most states in the District of Columbia.
- Graduated from an academic program with U.S. Department of Education recognized accrediting agency
- Passed relevant licensing or certification examinations, or is nationally board certified by the NCCAOM®
- Holds a license in the appropriate jurisdiction
- Education or training
- Include all board certifications
- Include DEA certifications
- Malpractice Insurance, if applicable
- Current Competence to Practice
Turn to Holistic Billing Service’s Medical Credentialing Services to Get Approved for a Network the First Time Around!
Medical credentialing for holistic practices can be a lengthy and complicated process, but one that is an option to receive reimbursements from insurance companies as an in-network provider. An efficient and accurate provider credentialing service is essential for a healthy bottom line, but the process can be full of complicated paperwork that needs to be filled out precisely. By outsourcing your medical credentialing to professionals, you can trust that your credentialing is filled out correctly – the first time around!
At Holistic Billing Services, you can trust our team of experienced billing and coding experts to understand the unique needs of holistic practices and can help you take steps to accelerate your revenue cycle management and avoid claim denials. Since we deal exclusively with holistic healthcare practices like acupuncture, massage therapy, and chiropractic treatments, we are familiar with the medical credentialing approval process and how it affects your business. For any questions about holistic billing, feel free to contact our team today, and let us know how we can help your holistic practice!
The opioid crisis is one of the major health challenges in the United States today, and it’s responsible for destroying thousands of lives. Whether addiction stems from prescription medications or illegal street drugs, more than two million Americans are victims of opioid misuse.
Finding alternatives to highly addictive opioid drugs is a crucial key to combating this epidemic. Increasingly, holistic practices have been looked at as safer and more effective alternatives to opioids. Acupuncture treatments, among other drug-free therapies, offer pain management solutions with minimal burden to patients, opening up a wide variety of opportunities for people to seek pain relief without the side effects of opioid drugs.
Understanding the Opioid Crisis
The United States is in what’s currently being described as the “Opioid Crisis.” Up to 130 people die every day in the United States from opioid overdoses. The misuse of opioids, ranging from heroin, prescription pain relievers, and synthetics such as fentanyl, has become a severe burden on social and economic welfare, as well as a public health crisis. The Centers for Disease Control and Prevention estimate that the epidemic costs the United States $78.5 billion a year, including treatment costs, law enforcement, healthcare, and lost productivity.
The crisis has its roots in the late 1990s when pharmaceutical companies reassured doctors that opioid pain relievers were safe and addiction-free, leaving healthcare providers to prescribe them in great numbers to patients who complained of pain. The massive influx of prescription drugs has led to many patients becoming addicted, despite never touching illegal drugs. This led to the mass availability of heroin and synthetics, such as fentanyl, on the illegal market, allowing for the current widespread abuse of opioids in the country.
By the late 2010s, the crisis had reached emergency proportions. On October 26, 2017, the United States officially declared the opioid crisis as a National Public Health Emergency and the federal government began necessary taking steps to address the epidemic. The United States Department of Health and Human Services’ Five-Point Opioid Strategy was released in April 2017 as a framework for the federal response to the epidemic. The strategy partially aims to,
“Support cutting-edge research that advances our understanding of pain and addiction, leading to the development of new treatments, and identifies public health interventions to reduce opioid-related health harms…”
This is key for developing pain treatments that are alternatives to opioid drugs. Many have recognized the importance of holistic medicine, especially acupuncture treatments as alternative methods of pain management.
Holistic Alternatives to Opioid Drugs
The options of other pain management methods over opioid drugs have increased with the crisis’s severity. Popular alternatives for pain medications range from over-the-counter drugs, such as acetaminophen (Tylenol), to non-drug therapies that are used in conjunction with non-addictive medications. These include:
Physical Therapy
Physical therapy has been widely seen as a successful alternative to opioid drugs. Physical medicine and rehabilitation include options such as deep-muscle and ultrasound massages, whirlpools, as well as traditional physical therapy exercise programs that can prevent and manage pain from injuries or disabilities.
Yoga
This meditative movement practice has surged in popularity over the years and can not only improve fitness and reduce stress, but has been found to especially reduce discomfort in people with lower back pain. It also features mind-body techniques, including breathing exercises that can help induce relaxation and lower anxiety.
Acupuncture
This increasingly popular ancient Chinese practice uses fine needles inserted in various “acupuncture points” across the body to treat pain. Since the needles are so small, they themselves do not inflict pain but can provide significant pain relief for those with regular appointments by interrupting pain signals throughout the body.
Is Acupuncture an Effective Opioid Drug Alternative?
Acupuncture is an effective pain management alternative to opioid drugs and is at the forefront of some of the more touted holistic alternatives to pain issues. When performed by licensed acupuncturists, acupuncture is a safe and powerful modality for pain management for a variety of injuries and disabilities without the destructive side effects of opioid drugs.
One meta-analysis of almost 18,000 patients across 29 randomized controlled trials found that certified, accurate acupuncture was significantly more effective than the absence of the service.
It’s becoming increasingly accepted that acupuncture could be prioritized as a replacement for opioid drugs for both chronic and acute pain. Despite their effectiveness, acupuncture treatments are minimally invasive so they cause minimal burden to patients with no lasting side effects.
What Does Acupuncture Treat?
Acupuncture treatments can be used to treat a wide range of symptoms, including stress management, pain control, and neurological and respiratory disorders. When used as an opioid drug alternative, acupuncture treatments can be manifested as either treatment for pain management or as an opioid replacement.
Acupuncture for Pain Relief
Acupuncture treatments have been increasingly known as the “go-to” for integrative therapy for its effectiveness on pain relief. According to the National Institute of Health (NIH), results from a number of studies have found that acupuncture treatments reduce pain for a number of ailments, including types of pain that are often chronic such as low-back pain, neck pain, and osteoarthritis/knee pain.
Additionally, the side effects are minimal when compared to other pain management solutions. Relatively few complications from acupuncture have been reported when it’s administered correctly. In 2017, the American College of Physicians issued recommendations for treating chronic lower back pain, including acupuncture as an effective non-drug therapy. As providers try to limit prescribing opioid drugs as pain management options, effective and as safe therapies such as acupuncture treatments are increasingly pushed to the forefront of pain control methods.
Acupuncture as an Opioid Drug Alternative
Acupuncture has the potential to become a front-line treatment for pain management, reducing the number of opioid drug prescriptions being issued. As an opioid drug alternative, acupuncture treatments can be used in place of the prescriptions for acute to chronic pain for the same effects with only minimal burden on the patient.
A Cochrane study of five randomized trials and 285 patients found benefits of acupuncture for cancer pain relief when compared to traditional pain medications, which are often opioid drugs. Additionally, some studies suggest that acupuncture activities opioid receptors in the brain. When used in conjunction with acupuncture treatments, this would likely allow for lower doses of opioid medication to be needed for patients with severe pain.
What are the Health Benefits of Acupuncture?
The health benefits of acupuncture treatments are numerous and can be used to treat a wide variety of medical conditions and symptoms. Besides its benefits as an opioid drug alternative, acupuncture can be used to treat everything from migraines and headaches to recovery from surgery.
While the NCCIH notes that acupuncture treatments have been proven to help treat lower back pain, neck pain, osteoarthritis, knee pain, and chronic migraines, the Acupuncture Evidence Project reviewed the effectiveness of acupuncture for 122 treatments over 14 clinical areas and have found some evidence of effect for 117 conditions.
Other conditions that acupuncture treatments can relieve pain for include:
- High and low blood pressure
- Chemotherapy-induced nausea and vomiting
- Facial pain
- Morning sickness
- Dental pain
- Inducing labor
Additionally, one of the more attractive benefits of acupuncture is that there are minimal side effects when compared to medication drugs, such as opioids. It’s a safe and non-addictive method for those looking for a minimally invasive pain solution.
Let HBS Handle Your Billing for Acupuncture Services so You Can Focus on Delivering Better Patient Care!
As the acupuncture service industry expands, you want to focus on growing your holistic practice and ensuring that your patients are receiving the best in acupuncture treatments. Billing for acupuncture services can be tedious, but it doesn’t have to be.
Holistic Billing Services specializes in the unique requirements of acupuncture practices to ensure that they get the insurance reimbursements they’re entitled to receive for their services. By partnering with an experienced medical billing team, you can spend less time thinking about managing the ins and outs of CPT coding and insurance claims and more time delivering higher-quality care to your current patients.
Ready to accelerate your practice’s revenue cycle management and grow your acupuncture practice? Contact our billing and coding experts today.
On January 21st, 2020, the Centers for Medicare and Medicaid Services (CMS) announced their decision to cover acupuncture for chronic low back pain. This is defined as localized pain in the lower back that persists for more than three months. The decision was momentous because it marked the first time acupuncture services could be reimbursed by Medicare.
Unfortunately, the decision also created a great deal of confusion. While Medicare now covers acupuncture services for lower back pain, there are a number of important conditions that must be met for treatment to be eligible for acupuncture billing. This makes many wonder what factors are considered for Medicare acupuncture coverage.
For example, the treatment must be administered under the “adequate supervision” of a physician, physician assistant, or nurse practitioner. This may sound simple enough, but the language used by the CMS ruling to define who may administer that treatment is deceptively complex.
Does Medicare Pay for Acupuncture?
The simple answer? Medicare doesn’t cover acupuncture for any condition other than chronic low back pain.
There are also additional acupuncture insurance billing requirements to follow, although the ruling has created the impression that any licensed acupuncturist can bill services to Medicare as long as they administer treatment in the presence of a physician, physician, assistant, or nurse practitioner. However, this is not an accurate interpretation of the CMS decision.
The ruling clearly states that a provider must be an MD/DO, physician assistant, nurse practitioner, clinical nurse specialist, or auxiliary personnel. They must also “possess a master’s or doctoral-level degree in acupuncture or Oriental Medicine from a school accredited by the Accreditation Commission on Acupuncture and Oriental Medicine (ACAOM)” and hold a “current, full, active, and unrestricted license to practice acupuncture” in the state.
Some holistic practices have seized upon the category of “auxiliary personnel” and taken it to mean something akin to an independent contractor. While an independent Licensed Acupuncturist may qualify as auxiliary personnel, the CMS ruling is quite clear on how this category can administer treatment:
“Auxiliary personnel furnishing acupuncture must be under the appropriate level of supervision of a physician, physician assistant, or nurse practitioner/clinical nurse specialist required by regulations…”
The key phrase here is “appropriate level of supervision,” which is typically interpreted under Medicare guidelines to mean that the person providing the service is “incident to” a physician’s professional services or hospital services. Put simply, means that the acupuncturist is administering treatment on behalf of the physician as part of the physician’s practice. All auxiliary personnel must, therefore, be supervised by the authorized Medicare provider.
Following this logic, then, auxiliary personnel cannot directly bill Medicare for any services rendered because they are not the registered Medicare provider. The supervising physician may bill Medicare for acupuncture treatments for lower back pain (with some restrictions), but the acupuncturist cannot do so themselves.
Furthermore, since licensed acupuncturists are not currently included on the list of Medicare provider groups, there is currently no way for them to directly bill Medicare for reimbursement. Hypothetically, if they were added to the list of qualified provider groups, they would be able to bill for eligible services (currently chronic lower back pain).
Unfortunately, an act of Congress would be necessary to expand the list of provider groups. Despite several attempts to add acupuncturists to the list of Medicare providers over the past 40 years (most recently with the Acupuncture for Heroes and Seniors Act, introduced in 2015 and reintroduced in 2017 and 2019), none of them have received a committee hearing in Congress.
Current State of Medicare Acupuncture Coverage
According to Medicare, back pain can be covered if it meets the following conditions:
- It has lasted 12 weeks or longer.
- There is no known cause (not related to cancer that has spread, inflammatory, or infectious disease).
- Pain not associated with surgery or pregnancy.
As of current Medicare acupuncture coverage regulations, no other sources of back pain will be covered. However, it’s not that simple. Since Licensed Acupuncturists are still not included on the list of Medicare provider groups, most acupuncture practices will be unable to deliver Medicare-approved acupuncture until an act of Congress changes the current verbiage to include them.
Additionally, Medicare guidelines state that a Medicare-approved acupuncture treatment must be no more than 45 minutes. Insurance companies may be inclined to decline payments if they receive an insurance claim from a provider for a 60-minute treatment.
While this CMS decision has made progress, it still does not serve the acupuncturing community as effectively as it may appear since the greater majority of Licensed Acupuncturists cannot deliver services covered by Medicare still unless they are working for a physician.
Acupuncture Medicare Fee Schedule
For Medicare-covered acupuncture, guidelines stipulate that up to 12 visits in the first 90 days may be covered for Medicare beneficiaries.
Up to eight additional sessions may be covered for patients who demonstrate improvement, but no more than 20 acupuncture treatments may be administered annually. Treatment must also be discontinued if the patient is not improving or is regressing.
The current rules cover the following acupuncture treatment codes (at the current Medicare national average fee schedule)
- 97810 ($37.89): Acupuncture, one or more needles, without electrical stimulation, initial 15 minutes of personal one-on-one contact with the patient.
- 97811 ($28.87): Each additional 15 minutes of personal one-on-one contact with the patient, with re-insertion of needles.
- 97813 ($42.22): Acupuncture, one or more needles, with electrical stimulation, initial 15 minutes of personal one-on-one contact with the patient.
- 97814 ($34.65): Each additional 15 minutes of personal one-on-one contact with the patient, with re-insertion of needles.
- 20560 ($26.71): Services with needle insertion(s) without injection(s) of 1 or 2 muscle(s).
- 20561 ($39.70): Services with needle insertion(s) without injection(s) of 3 or more muscle(s).
The Future of Medicare Billing for Acupuncture Services
While most acupuncture practitioners are currently ineligible to provide Medicare-covered services for patients, there are movements in place to change the verbiage surrounding acupuncture in the Social Security act to include more of the acupuncturing community.
The American Society of Acupuncturists is currently at work drafting a bill for Congress and gathering support to make a change to the existing guidelines. In early 2021, their goal is to secure bipartisan support for the bill and organize acupuncturist advocacy campaigns to increase awareness of their bill. For more information, check out the plan here.
At Holistic Billing Services, we deal exclusively with holistic healthcare practices like acupuncture, massage therapy, and chiropractic treatment. Our team of experienced billing and coding experts understand the unique needs of holistic practices – such as acupuncturist practices – and can help you take steps to accelerate your revenue cycle management. For any questions about holistic billing, feel free to contact our team today and let us know how we can help your acupuncture practice.
As acupuncture insurance billing experts, we’ve been getting numerous questions from acupuncture providers reporting claim denials for 60-minute visits that used to pay without issues. Read on for our answer to this recently asked question!
Why Are My Acupuncture Visits Exceeding 45 Minutes Getting Denied?
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Typically, commercial insurance companies peg their reimbursement rates and procedure protocols to the Centers for Medicare and Medicaid Services’ (CMS) published guidelines. It is common to find language in insurance contracts expressing reimbursement rates as a multiple or percentage of a CMS fee schedule. Historically, the coding guidelines and pricing did not affect the average acupuncture practitioner as CMS did not recognize the most frequently used acupuncture codes. However, on Tuesday, January 21st, 2020, CMS announced their decision to cover acupuncture for chronic low back pain, defined as localized pain in the lower back that persists for more than three months. CPT Codes and Associated Fee SchedulesHere are the CPT code, fee schedule, and max units for some of the most common acupuncture billing codes:
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Additional CMS Updates for Acupuncture PracticesAlong with the announcement that acupuncture will now be covered for chronic low pain, CMS provided pricing and usage guidance for acupuncturists. As commercial payers and Veterans Affairs (Triwest and Optum) update their systems, many will follow the new pricing and Medically Unlikely Edits (MUE) values for acupuncture codes. Reduce Claims Denials in Your Acupuncture Practice with Holistic Billing!Due to these changes, insurance companies may start denying claims with acupuncture visits exceeding 45 minutes. If your insurance payer is adopting these policies, please ensure you’re adhering to these new billing requirements to avoid these denials. If you need assistance meeting billing requirements, turn to Holistic Billing Services! With our help, you can start seeing patients covered by insurance quickly and painlessly, no matter what type of acupuncture services you offer. After you’ve successfully enrolled in our easy-to-access portal for health insurance billing, you’re ready to get started generating revenue for your acupuncture services! Just send us the details of the treatment you’ve provided and our acupuncture billing experts take care of the rest. Have additional questions about medical credentialing for holistic practices, EHR, or medical billing for your acupuncture practice? Reach out to one of our experts today! |
Are your insurance reimbursements taking longer to process than they should? Or do your claims always seem to be turned down for not providing information the insurer never asked for? If your practice keeps encountering these problems, you could have a strong legal case for filing a complaint against the insurer. Holistic Billing Services has walked plenty of acupuncture, massage therapy, and chiropractic practices through the complaint process over the years. Here’s a look at what we’ve learned along the way.
Your Holistic Practice and Health Insurance Complaints
Here is a tip most people billing insurance for holistic healthcare aren‘t aware of: most states have “prompt payment” legislation in place where insurers are required to resolve each provider dispute consistent with applicable law and issue a written determination usually within 45 working days after the date of receipt of the provider dispute. If you feel you have exhausted all of your options with the insurer in resolving a clean claim, take advantage of these laws by contacting your state‘s insurance commissioner to file a complaint.
How Do Prompt Payment Laws Work?
Prompt pay laws require insurance companies to either pay or deny claims from healthcare providers within a reasonable period of time. That amount of time varies by state, but is typically between 15 to 60 days. The timeframe is often shorter for electronic claims compared to old-fashioned paper claims. States attempt to compel prompt payment by imposing penalties on insurers who fail to comply with the payment deadline.
There are some exceptions to these requirements. If the insurer needs more information or proof of additional insurance, they can receive an extension so long as they request the necessary information within the original time period. Once they receive the additional information, they are still obligated to process the insurance reimbursement in a timely manner.
Failure to comply with prompt payment requirements can carry substantial penalties, often in the form of interest payments to the provider. Insurance companies that are habitually late in their payments could also be hit by the state with hefty fines, like the $1 million fine Pennsylvania levied on UnitedHealthcare in 2019 or the $10 million fine Texas imposed on Blue Cross Blue Shield of Texas in 2020 (for prompt pay and other violations).
What Qualifies as a Clean Claim?
It’s important to remember that prompt payment laws apply specifically to clean claims. These are claims that use a standard claim form (typically claim form CMS-1500, formerly known as HCFA 1500, or claim form UB-04) or the specific electronic system used by the insurer. In both cases, the practice must be sure to complete the required fields with all the information necessary to process the claim.
“Clean” refers to both the completeness and accuracy of a submission. Insurance providers are typically quite clear about the specific information they need when providers submit a claim for processing. Documentation sometimes needs to be submitted along with certain CPT codes, so it’s important for practices to always accurately document what treatments are being administered and how time is being accounted for (especially when it comes to the new E&M billing guidelines).
When and Why to File Insurance Complaints
If an insurer is taking longer than expected to process a claim, your first step should be to check the prompt payment guidelines in your state. The Department of Insurance can provide more detailed information about the claims process and the requirements facing insurers (look up your state’s information here).
Once you’ve determined that the insurer has missed the prompt pay deadline in your state and has not requested additional information from you, the next step is to begin filing a claim. While the process can be a bit time consuming and involve some additional legwork, it’s important to hold insurance companies accountable when they fail to comply with state law. Simply giving them more time to process your claim may result in you not getting paid at all, and it may prevent you from collecting interest payments you are legally entitled to receive.
When the time comes to follow up on a claim, it’s helpful to have an experienced billing provider with a history of representing holistic practices at your side. Before you begin the complaint process, consider reaching out to a partner who already knows what steps to take in order to resolve the dispute quickly and favorably.
How to File a Complaint Against a Health Insurance Company
Step 1: Contact the Insurer
When contacting the insurer to file a complaint, be sure to remind them of your state’s prompt pay requirements and present them with detailed information about your claim (such as the date it was submitted and proof that it was delivered to them). The insurer may argue that they never received the claim, in which case you should be able to provide a copy of the original claim. Document all correspondence with the insurance company, preserving all written or electronic communication and making note of who you spoke to, when, and what you discussed.
Step 2: Escalate to Your State’s Department of Insurance
If the insurer is unable or unwilling to resolve the situation, your next recourse is to escalate the complaint to state authorities. Your state’s Department of Insurance has special complaint forms available (usually on their website) for filing complaints regarding prompt pay violations. State officials will need detailed information about your claim and your correspondence with the insurance company. This is where your extensive documentation will prove invaluable.
Protect Your Practice with Holistic Billing Services
As a medical billing provider specializing in acupuncture, massage therapy, and chiropractic services, Holistic Billing Services has extensive experience dealing with prompt payment complaints against insurers. We can walk you through every step of the process to ensure that you have all your documentation in order and are in the best position to secure the insurance reimbursement revenue (and potential interest payments) you’re entitled to under the laws of your state. With Holistic Billing’s help, you can keep your focus on your practice while we handle the ins and outs of the complaint process.
To find out what else an experienced billing provider can do for your practice and your revenue cycle management, contact our team today for a consultation.
The Centers for Medicare and Medicaid Services (CMS) released a series of changes in 2018 to the way E/M coding would be documented and billed for reimbursement. In partnership with the healthcare billing community, we reacted swiftly to the announcement, pointing out a series of potential problems that could arise when the changes went into effect for integrative medicine practitioners. In response, CMS formed a working group to consider another way of streamlining documentation burdens without focusing away from the delivery of medically necessary care. After about a year of negotiations and planning, we are happy to report that the changes were finally released to the public as part of the 2020 Physician Final Rule.
Understanding E&M Codes
An abbreviation for “evaluation and management,” E/M codes (alternatively known as E&M codes or sometimes referred to as “office visits”) are used by private practices to bill for a range of encounters that occur between patients and physicians, therapists, or practitioners. As a subset of CPT coding (specifically, CPT code range 99201-99499), E/M codes provide three pieces of information to insurance providers for reimbursement.
- Patient Type: Indicates whether the patient is new or established.
- The setting of Service: Indicates where the healthcare services were provided. For most holistic practices, this will be an office or outpatient setting.
- Level of Service Provided: E/M coding indicates the complexity of the health services delivered. A higher value code suggests a more complex service.
Under the original E/M coding structure, the level of service was determined by a complex calculation involving three elements: patient history, physical examination, and medical decision making. Each factor required the appropriate documentation to help indicate what appropriate level of service and then to bill accordingly. While holistic practitioners could use time as a determining factor when substantial counseling or care coordination was involved, that process required them to follow a very ambiguous set of guidelines.
How Are E/M Codes Changing in 2021?
Federal E/M coding guidelines will undergo a substantial change as of January 1, 2021. These changes will specifically affect coding for office and outpatient visits (CPT codes 99201-99215), making them extremely important for holistic practices to review.
New E/M Coding Rules for 2021
- New patient level 1 code (99201) is eliminated altogether, reducing the number of levels for new patient E/M visits to four. Established patients will retain the standard five coding levels.
- History and physical examination will no longer be determining factors when identifying the appropriate level of care; this doesn’t mean documentation requirements are going away altogether. Clinically relevant history and examinations must still be documented when necessary.
- Medical decision making or time can be used to determine the appropriate level of service.
- Adjustments are made to Medicare reimbursements for E/M codes. Since only a few holistic services are eligible for Medicare reimbursements, they may not impact every practice.
What Do E/M Changes Mean for Your Holistic Practice?
The overall goal of these changes was to emphasize medical decision-making and reduce the overall volume of paperwork associated with documentation. Still, the changes could have broader consequences for many practices. Most EHR systems overly rely on multiple bullet point entries to document patient history and log physical exam results. These tend to slow down patient visits and used because it was integral to the calculation used to determine the proper level of service code for E/M billing. Since the changes coming in 2021 will focus exclusively on time and medical decision-making factors to make this decision, the electronic medical records used by holistic practices should be simplified and updated to reflect the updates and speed up documentation.
Medical decision making for E/M coding is broken down into four different types, each reflected by a specific range of CPT codes:
- Straightforward (codes 99202 & 99212)
- Low (codes 99203 & 99213)
- Moderate (codes 99204 & 99214)
- High (codes 99205 & 99215) (not recommended for holistic and integrative medicine practices.)
When making a “medical decision,” physicians or therapists must consider three distinct elements pertaining to the patient:
- Number and complexity of problems being addressed.
- Amount and/or complexity of data to be reviewed and analyzed.
- Risk of complications and morbidity or mortality of patient management.
These three elements are rated according to four escalating levels that match the four types of medical decision making. The final E/M code is determined by examining each element’s level to assess the overall complexity of the decision. In order to qualify for a “Moderate” E/M code, for instance, at least two of the three elements must be at least “Moderate.” If one element is “Low,” one is “Moderate,” and another is “High,” the final E/M code would fall somewhere in the “Moderate” range (CPT codes 99204 & 99214).
This form of decision making obviously brings some degree of ambiguity, but CMS has done its best to give clear guidelines within each element to minimize confusion. A more practical approach is for practitioners to make E/M code selections based on the amount of time they spend with patients. These guidelines are much simpler than previous versions. For example, to bill for a “Moderate” encounter with an established patient (CPT code 99214), the interaction must last between 30 and 39 minutes.
Holistic practices will have to reassess their documentation and EHR systems to ensure they’re providing the information insurance companies are looking for when evaluating E/M billing codes. By far the biggest shift will be the transition from an emphasis on patient history and physical exams, which will hopefully reduce the overall level of documentation in these categories.
There is a lingering question about how reimbursement rates will be affected by the 2021 E/M code changes. While most holistic practices will be billing private insurers instead of Medicare, their reimbursement structure is often impacted by changes made to Medicare rates. The team at Holistic Billing will continue to monitor the situation as more information becomes available following the 2021 rollout.
Prepare Your Practice for Success with Holistic Billing!
As a medical billing specialist with a particular focus on acupuncture billing, massage therapy billing, and chiropractic billing, Holistic Billing Services has been helping independent practices adapt to new regulatory guidelines for many years. We’re always watching for the latest insurance billing announcements that could impact your holistic practice. We make sure we’re delivering the very best advice when it comes to your credentialing, billing and coding needs. If your acupuncture, massage therapy, or chiropractic practice needs help adapting to the latest round of E/M coding changes, the experts at Holistic Billing can provide the resources and guidance you need to boost your insurance reimbursements and keep your revenue cycle management moving along.
To find out what outsourced billing and coding services with Holistic Billing can do for your practice, contact our experienced team today!
COVID-19 pandemic has already inflicted terrible damage upon many holistic medicine practices. As if the first wave of lockdowns wasn’t damaging enough, the sudden resurgence in cases throughout the country has pulled the rug out from underneath many businesses that thought the worst was already behind them. While it remains to be seen if states will begin ordering more shutdowns to limit the spread of the virus, holistic practices should start thinking about making lasting changes to their businesses rather than trying to ride out the crisis.
The Impact of COVID-19 on the Integrative Medicine Industry
Social distancing requirements have proven particularly difficult, though not impossible, for acupuncture, massage therapy, and chiropractic practices to manage. When the reopening process began in late spring, many of them adapted as best they could to the new guidelines, changing how many patients were scheduled, limiting staff presence, and procuring additional protective equipment. But just because those practices were ready to receive patients doesn’t mean they all came flooding back. A recent survey of healthcare facilities found that 79% of them were seeing fewer patients now than they did prior to the pandemic, a trend that has undoubtedly affected holistic practices as well.
5 Changes Integrative Medicine Practices can Expect to See Post-Pandemic
While it’s too early to say what the long-term impacts of the COVID-19 pandemic will be on holistic practices, there are some changes that seem quite likely to occur.
1. Marketing Will be More Important Than Ever
When the threat of the pandemic finally recedes, integrative medicine practices will face the tremendous challenge of attracting new patients. People may not know that holistic practices are even still open, so it will be important to establish a strong marketing presence to broadcast those services. The post-pandemic competitive landscape may look very different, with some long-standing practices going out of business and unproven newcomers opening practices. Established practices must be prepared to stand out in this new environment with the right marketing message that brings people back for their services.
2. More Patient Engagement
In addition to stepping up their marketing, practitioners will likely feel the pressure to cultivate stronger relationships with their patients. Keeping in regular communication with patients will make it easier to retain them over time and also build up a strong infrastructure that allows the practice to stay in contact in the future. Should another pandemic or similar event occur, having an engaged patient base will make the practice more resilient should it need to cut back or shut down services again.
3. Long Term Health Complications
One of the most disturbing and poorly understood aspects of COVID-19 is the lingering health effects it causes in some patients after recovery. These impacts include kidney damage, nervous system dysfunctions, and joint inflammation. Holistic practices must make themselves aware of these symptoms and determine how their health services might be able to address them for patients in search of relief.
4. Ongoing Social Distancing
While hopes remain high for the rapid development of a COVID-19 vaccine, it’s important to remember that their rollout will likely take place over time and could face significant logistical barriers. That’s partially why a study conducted early in the pandemic estimated that social distancing measures may be necessary well into 2022. Holistic practices should be prepared to keep social distancing guidelines in their offices in place for the foreseeable future.
5. Increased Demand for Remote Services
The retail industry has long found that online services tend to be “sticky.” That is, once people start using them, they tend to stick with the behavior. It’s why the number of online shoppers grows after each holiday season and it could be why the number of people expecting healthcare and holistic practices to offer remote services after the pandemic. The growth of telemedicine and increased familiarity with video conferencing tools could create a tremendous opportunity for holistic practices to reach a new range of customers who may not be willing to make an in-person appointment, but might be interested in remote consultations or presentations.
Prepare Your Holistic Practice for the Future with the Help of Holistic Billing!
Managing all these new challenges in the aftermath of the pandemic can be difficult enough without having to think about how they might impact your billing and coding. Partnering with an experienced medical billing provider with a special focus in acupuncture, massage, and chiropractic services can take the burden of insurance billing off your plate so you can work on meeting the needs of your patients and growing your practice.
At Holistic Billing Services, we deal exclusively with holistic healthcare practices like acupuncture, massage therapy, and chiropractic treatment. Our team of experienced billing and coding experts understand the unique needs of holistic practices and can help you take steps to improve your insurance reimbursements, reduce denied claims, and accelerate your revenue cycle management. To learn more about the benefits of holistic billing and begin preparing your practice for a post-pandemic world, contact our team today.
The COVID-19 coronavirus had a profound effect on holistic patient care. Many practices were forced to see patients under highly restrictive circumstances, and sometimes they were not able to see them at all. As state-mandated social distancing guidelines are slowly relaxed, many holistic practices are wondering what to do with themselves until patient levels return to the pre-lockdown levels.
What COVID-19 Has Meant for Holistic Patient Care
The impact of the coronavirus pandemic on holistic patient care has been somewhat uneven and determined primarily by whether or not a particular practice area is designated as an essential service. Chiropractic providers were given that distinction by the Department of Homeland Security in late March, which allowed many chiropractors to remain open and see patients even during the height of state-imposed social distancing requirements.
Unfortunately, massage therapy and acupuncture practices did not receive the same endorsement from federal authorities, which meant that most states ended up designating them as “non-essential” medical services. These practices often had no choice but to close their offices for the duration of the stay-at-home restrictions.
While most states have taken steps to roll back restrictions and allow businesses to reopen, some holistic practices either aren’t ready to resume seeing patients or will be serving fewer patients than they did prior to the crisis. Whether an office is reopening or taking a “wait and see” approach for the time being, many holistic practitioners are looking for ways to remain productive until they’re able to get back to full capacity.
5 Ways to Stay Productive While Unable to Give Holistic Patient Care or Operate at Maximum Capacity
1. Focus on Continuing Education
If your holistic practice is still closed or you’re only seeing a much smaller number of patients, this is a perfect opportunity to catch up on the latest trends and developments within your specialty. Most states have some form of licensing system in place that requires holistic patient care providers to take part in continuing education to ensure that they’re aware of changing best practices when it comes to delivering care. Finding the time to fit this training in between a full schedule of patients can be quite a challenge, but it should be much easier to do so during the temporary slowdown. Focusing on education will also help you to keep your skills sharp for when your patients return.
2. Reassess (or Create) Infection/Disease Prevention Policies
The impact of COVID-19 will continue to be felt even after most businesses reopen. Until an effective treatment or a vaccine is developed, there will be an ongoing risk of infection and potentially even another rapid outbreak. It’s critical, then, for every holistic practice to take extreme caution as they begin seeing patients again. One thing you can do to promote better safety is to review your policies for limiting disease exposure (or developing them if you don’t have them). This could include how you schedule and manage patients all the way down to what items you keep in your waiting room. Taking these steps now will help to reassure patients when they return that you’ve done everything in your power to create a safe and healthy environment for them.
3. Reevaluate Your Practice Procedures
Is there something about the way you schedule clients or manage your records that always caused your holistic practice headaches in the past? Now is the perfect time to solve those problems. Many practices tolerate certain inefficiencies or systems because it would be too disruptive to change them. Now that your holistic practice is functioning well below capacity, however, it’s the perfect time to make those policy changes you’ve always had in mind, whether it’s changing the way you communicate with patients or how you bill holistic patient care to insurance companies. It may also be a good time to review PPP loan forgiveness guidelines if your practice received such a loan.
4. Clean and Repair Your Office
While your office should never be dirty, there’s always a deeper level of cleaning that simply takes too much time to complete when you have a steady schedule of patients. The same goes for longstanding repairs that need to be done. It simply isn’t practical to close down your waiting room for a few days to have the carpeting torn out and replaced with wood floors, just as there never seems to be the time to steam clean or disinfect every corner of the office. Make sure that when you do begin seeing patients again, they’ll know immediately that you’re committed to making their visit as accomodating and as comfortable as possible.
5. Network, Network, Network
Managing a full load of patients can be overwhelming at times, leaving little opportunity to connect with fellow holistic care providers. The slowdown is a good time to start building (or rebuilding, in some cases) those connections. Find out what other practices are doing to address the COVID-19 crisis. How are they handling their billing and coding? Are they attending industry events and putting their names out in the community to attract new patients? Networking with your peers not only exposes you to new ways of managing your practice, but also creates opportunities for you to reach new patients and partners.
Keep Your Holistic Practice Productive and Profitable with Holistic Billing!
As a medical insurance billing provider dedicated solely to the unique needs of holistic practices, Holistic Billing Services is here to help as you prepare to reopen your practice following the COVID-19 shutdown. With many people losing their private health insurance after being laid off, you may well find yourself billing for more Medicaid and Medicare reimbursements. Having an experienced billing service like Holistic Billing at your side can ensure that you’re acupuncture billing, massage therapy billing, and chiropractic billing are being done properly to get you reimbursed faster. Contact our team today to learn more about how we can get your practice back on its feed following the several months of coronavirus restrictions.
(This post has been updated to reflect PPP loan forgiveness changes passed by Congress in June 2020)
On March 27, 2020, Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act, an unprecedented $2.2 trillion assistance package intended to deliver financial support to both individuals and businesses impacted by the public health crisis resulting from the COVID-19 pandemic. While the law contains over 800 pages of relief provisions, one of the most important pieces for holistic practices was the $350 billion allocated to the Paycheck Protection Program (PPP).
What are PPP Loans?
In an effort to shore up small businesses, Congress authorized the Small Business Administration (SBA) to give out 100% federally-backed loans to cover payroll and other business expenses. The size of these loans was to be determined by the amount of time the business remained in operation throughout the COVID-19 crisis (which the CARES Act designated as February 15-June 30). Businesses that remained open could receive a maximum loan of 250% of their monthly average payroll costs. The best news, however, was that PPP loans would be forgiven provided businesses used them for their intended purposes and met certain requirements (more on that in a moment).
Although backed by the federal government, businesses had to apply for PPP loans through their regular bank, which caused a number of bottlenecks that prevented money from being distributed quickly. The program also burned through its initial funding within weeks, forcing Congress to pass another bill to provide another $310 billion to borrowers. In total, banks issued around 4.3 million PPP loans totaling $500 billion.
New SBA Guidelines for PPP Loan Forgiveness
On May 15, the SBA and the Department of the Treasury released guidelines on how borrowers could apply to have their PPP loans forgiven. While the CARES Act clearly stipulated that these loans would be forgivable under certain conditions, it left the details of how that process would be handled to the SBA. After the details were made available, however, many business owners raised concerns with Congress, which led to the passage of additional legislation in early June that made further modifications to the loan forgiveness terms.
Borrowers can request forgiveness of their PPP loan by filling out SBA Form 3508, Paycheck Protection Loan Forgiveness Application. Consisting of several sections, the first two parts of the form (PPP Loan Forgiveness Calculation Form and PPP Schedule A) must be submitted to the lender who issued the loan. In most cases, this will be whatever bank your holistic practice has an existing relationship with.
According to SBA’s guidance, there are four business cost areas that are eligible for loan forgiveness so long as they were incurred during the 24-week period (extended by Congress from the original 8-week period) following the disbursement of the PPP loan (the borrower’s “Covered Period”):
- Payroll costs.
- Business mortgage interest payments.
- Business rent or lease payments.
- Business utility payments.
Although the guidelines originally required payroll costs to make up 75% of the forgivable amount, Congress subsequently reduced that amount to 60% and extended the repayment period for unforgiven debt from two years to five.
Payroll Costs
The borrower may deduct payroll costs that were either “paid” or “incurred” during the Covered Period. This distinction allows for some flexibility, as some payroll costs may be incurred before the end of the Covered Period, but not paid until afterward. The total amount of forgivable cash compensation given to each employee during the Covered Period cannot exceed $15,385 (or a $100,000 annual salary prorated over the Covered Period). Non-cash compensation, such as health insurance or retirement contributions, given to employees is not subject to this pro-rated limit.
Business Mortgage Interest Payments
Any interest payments made during the Covered Period on mortgage obligations involving real or personal property incurred before February 15, 2020 are eligible for forgiveness.
Business Rent or Lease Payments
Any rent or lease payments made during the Covered Period on real or personal property directly related to the business due to agreements established prior to February 15, 2020 are eligible for forgiveness.
Business Utility Payments
Any utility payments involving the use of electricity, gas, water, transportation, telephone service, or internet access made during the Covered Period directly related to the business due to service agreements in place before February 15, 2020 are eligible for forgiveness.
Keep in mind that non-payroll costs cannot exceed 25% of the total forgivable amount.
CARES Act Workforce Reduction Guidelines
One of the key goals of the CARES Act was to ensure that full-time employees were not laid off due to the economic downturn caused by the COVID-19 pandemic. In order to qualify for loan forgiveness, employers had to maintain the size of their workforce during the Covered Period. The new SBA guidance measures this with a calculation called full-time equivalency (FTE).
A borrower calculates FTE by dividing the average number of hours paid per week to each employee by 40 and rounds the total to the nearest tenth. Alternatively, they can simply assign a 1.0 for employees who work 40 hours or more each week and 0.5 for employees who work less than 40 hours. If the employer’s average FTE during the Coverage Period is lower than the average FTE during past reference periods, it may not be eligible for forgiveness of all PPP funds. Any employee compensation reductions of 25 percent or greater could also limit loan forgiveness.
The latest SBA guidelines do stipulate a few exceptions to this requirement, however. Any FTE reductions that resulted from an unsuccessful, good faith attempt to rehire an employee are not counted against the employer. Also, any employees who were fired for cause, voluntarily resigned, or voluntarily requested and received a reduction in hours are exempted from the calculation.
There is also a “Safe Harbor” provision that exempts any borrower from losing out on loan forgiveness due to FTE reduction provided they meet the following conditions:
- The borrower reduced FTE levels between February 15 and April 26, 2020, and
- The borrower restored FTE levels to the February 15 level by no later than December 31, 2020.
PPP Loans and Your Holistic Practice
Since PPP funds were distributed through banks, many businesses had difficulty securing loans even when they met the established requirements. This was especially difficult for small businesses like holistic care providers, who often found themselves losing out to much larger companies. For practices that were fortunate enough to obtain a PPP loan, the newly released SBA guidelines offer an easy-to-follow roadmap to getting the loan forgiven so they can get back to treating patients as businesses begin to reopen.
Holistic Billing Services is ready to help these practices resume operations and relieve the pressure of billing and coding so they can tend to their patients in these difficult times. To find out how we can get your acupuncture, massage therapy, or chiropractic practice back up to speed, contact our experienced team today.