CARES Act and Private Equity

[Sparky]

Regarding the recent HHS CARES act grant ( $30B distributed last Friday via ACH to Medicare provider billing accounts) and still more to come... :

Anyone have any clarity on how this impacts physicians who have sold their practices to private equity and now compensated as employees on a percentage of Net Revenue/Gross Profit/etc? We are seeing lots of these deals across ophtho, dentistry, Derm, GI, Gyn, Uro, etc so hopefully someone has info on this. Clearly a lot of money based on your historic fee-for-service Medicare billing amounts coming in as a no-strings attached, no payback grant and we have all taken salary reductions for loss of revenue from elective care. Anyone have info on whether this will trickle down to providers or not from the MSO (managing service organization) that controls the billing accounts??

[WCInovice]

I wouldn’t call it a no strings attached grant.

We are evaluating whether we can keep this money or not. There seem to be some stipulations. We (cancer care) are down some volume but arent decimated like surgery or derm.

[xraygoggles]

Not sure of your exact question but the Fed is allowing capital to private equity firms now. This is also relevant to my practice backed by a few PE firms.

http://wsj.com./articles/feds-corona...es-11586988495

[MoneyMoth]

Regarding the recent HHS CARES act grant ( $30B distributed last Friday via ACH to Medicare provider billing accounts) and still more to come... :

Anyone have any clarity on how this impacts physicians who have sold their practices to private equity and now compensated as employees on a percentage of Net Revenue/Gross Profit/etc? We are seeing lots of these deals across ophtho, dentistry, Derm, GI, Gyn, Uro, etc so hopefully someone has info on this. Clearly a lot of money based on your historic fee-for-service Medicare billing amounts coming in as a no-strings attached, no payback grant and we have all taken salary reductions for loss of revenue from elective care. Anyone have info on whether this will trickle down to providers or not from the MSO (managing service organization) that controls the billing accounts??

I work for a PE-backed group. The response I got was "we will see how to filter this money down to you in the future".

I'm not holding my breath.

On the "plus" side, I live in a state where people are close to rioting over the lockdown so I might be back at work full-time before I know it.

[jacoavlu]

likely such a situation is not addressed specifically in any of your contracts, therefore I would expect the bosses to try to keep the money

i would be reviewing contract language

[Cubicle]

The only thing I could think of, as a defense, is "that payment is based of my personal performance in 2019; it has nothing to do with you". Iffy, but at this point, its a long shot.

[investorwithoutwhitecoat]

Anyone have a link to the stipulations for keeping the money?

[CordMcNally]

The only thing I could think of, as a defense, is "that payment is based of my personal performance in 2019; it has nothing to do with you". Iffy, but at this point, its a long shot.

They'll just say that they purchased the practice and can retain any/all unrealized income/profits. And they probably wouldn't be wrong.

[WCInovice]

Anyone have a link to the stipulations for keeping the money?

Here is the 10 page terms and conditions pdf

https://www.hhs.gov/sites/default/fi...conditions.pdf

[WCInovice]

Here is one bullet point on the attestation that I'm worried about as it pertains to a lot of groups...

• The Recipient certifies that the Payment will only be used to prevent, prepare for, and respond to coronavirus, and shall reimburse the Recipient only for health care related expenses or lost revenues that are attributable to coronavirus.

I'm sure a lot can say yes we lost expenses attribuatble to coronavirus. But how would a general surgery, ortho, or oncology practice say they were using the money to "prevent, prepare for, and respond to coronavirus" if they're just putting cases on hold and have lost revenue? Extra PPE costs?

[childay]

I suppose one could argue that not doing elective surgeries is "responding" to coronavirus ?

[Tim]

There is a real question if passing through payments for lost physician earnings would qualify as proper use of the funds.
Is a pass through for physician earnings within the guidelines for expenditures?

[Cubicle]

But how would a general surgery, ortho, or oncology practice say they were using the money to "prevent, prepare for, and respond to coronavirus" if they're just putting cases on hold and have lost revenue? Extra PPE costs?

I'm absolutely aiming in the dark. But expenses incurred for closing the office to prevent virus spread to other patients & staff. Prepare for possibly surge in patients when things open up (stocking up on supplies, I am). Responding by both prior points, & also change in hospital & office call schedule. I'm definitely seeing more patients outside of normal hours because I am trying to keep patients out of the ER for things I admittedly would say "I recommend you go to the ER for that".

Knowing my luck, I could still very well end up in HHS / CMS prison.

[jacoavlu]

I suppose one could argue that not doing elective surgeries is "responding" to coronavirus ?

or "preventing"

[CrockettsRiver]

I would think “lost revenue that is attributable to coronavirus” 100% applies.

But if your practice is owned by PE I don’t think you will see a dime. Those guys aren’t known for taking care of their physicians.