To deal with the economic hardship and other fallout from the spread of Coronavirus Disease (“COVID-19”), on March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) was signed into law. With total funding of approximately $2.3 trillion, the legislation is the largest economic stimulus package in the history of the United States. Aimed at alleviating the hardship imposed by COVID-19 on individuals, business and healthcare providers, the CARES Act is expected to impact almost every sector of the US economy.
With healthcare providers on the front lines of fighting COVID-19 and healthcare accounting for 17.7% of the US gross domestic product, the CARES Act has numerous provisions specific to the healthcare industry which has been disproportionately affected by the nationwide crisis. What are these provisions and how are they expected to impact provider operations, cash flow and the ability of facilities to serve patient needs?
Based on VMG Health’s (“VMG”) review of the legislation, discussions with industry stakeholders and other publicly available information, the CARES Act is primarily designed to address the crisis experienced by healthcare providers in the following ways:
- Loan Programs
- Direct Funding and Grants
- Relief from Spending Cuts and Additional Reimbursement
- Tax Code Changes
- Changes in Regulatory Framework
Please note, VMG has summarized specific major provisions relevant to healthcare providers below. However, this is not intended to be a comprehensive analysis of what is included in the CARES Act and how it may impact healthcare organizations.
