While the COVID-19 pandemic is not over and all states continue to balance reopening businesses with keeping patrons safe and preventing the spread of the virus, for many pediatricians, it’s a crucial time to reflect on the financial effects of the crisis, as well as how to recover, plan, and prepare for a new school year with continued recovery and safety in mind.
A Review of Relief for Pediatricians
In order to move forward financially, it’s important to note where your practice has been in the last few months. Many practices have taken advantage of the necessary federal assistance provided in order to weather the spring’s uncertain revenue and sudden shift to telemedicine. As your practice makes plans for recovery and beyond, be sure you know the terms of any loans, and when relief funds, debt forgiveness ends.
On Friday, March 27th, Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act into law. This law offered support both to Americans and their businesses, the latter via Small Business Association programs such as the Payment Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) loans. On March 30th, the Center for Medicare and Medicaid Services (CMS) announced telemedicine payment parity on visits, as well as waivers on certain restrictions.
Payment Protection Program & EIDL Loans
The PPP loan program is designed to incentivize businesses to keep employees on the payroll by providing funds intended for that purpose. The loan is forgiven if retention criteria are met and the funds are used for eligible expenses such as payroll instead of rent, for example. According to the SBA:
- PPP loans have an interest rate of 1%.
- Loans issued prior to June 5 have a maturity of 2 years. Loans issued after June 5 have a maturity of 5 years.
- Loan payments will be deferred for six months.
- No collateral or personal guarantees are required.
- Neither the government nor lenders will charge small businesses any fees.
EIDL loans are designed to “provide economic relief to small businesses and non-profit organizations that are currently experiencing a temporary loss of revenue.” Loans are capped at $15,000 plus the advance your practice qualifies for. Eligibility requirements include fewer than 500 employees and that your business has been operational since before January 31, 2020.
The SBA has more resources for small businesses, even those who have existing debt with the SBA. For more information on debt relief and the other resources available, visit the SBA website.
As you plan, be sure to write down the terms of your loans, when relief will end for your practice, and how your spending could affect PPP forgiveness. Be sure also to stay current on the news! Legislation has been introduced in the Senate as of July 15, 2020 that would “allow small businesses who received a Paycheck Protection Program (PPP) loan of $150,000 or less to obtain automatic forgiveness after submitting a one-page attestation form.”
Current Recovery Resources
Planning for Post-Relief
First, let’s cover what relief is available for pediatricians right now, and how you can begin today to recover from the financial hits of the pandemic. The SBA is accepting applications for PPP and EIDL loans from July 6th, 2020 to August 8th, 2020. If you have not already done so, you can apply now for assistance -- keep in mind that how funds are allocated can affect the forgiveness of your PPP loan.
It’s important to make a plan with actionable goals in mind so that when relief funding ends, your practice is on a trajectory that allows you to recover financially without the need for further loans. That said, it’s okay if you need loans to bridge the gap between relief and recovery -- remember, you can reach out for assistance and advice prior to making these decisions. You can find advice from your financial advisors, your colleagues, forums like the AAP’s SOAPM, and from practice management leaders like PCC and The Pediatric Management Institute.
There’s no better time to plan for recovery than right now. Your plan should include:
- Terms of relief and loan funds; how much can you afford to make in payments? How long is the deferral period? Can you begin making payments early?
- Cash flow and visits per day your practice will need to stand on your feet, as well as begin to make payments on loans.
- Reopening goals. Determine the costs of what your practice will need to reopen, from masks for patients to a reorganized waiting room.
- A plan for managing staff expectations. If your practice needed to let staff go during the pandemic, determine if and when you can expect the full staff to return, as well as managing expectations on hours, remote work, continued sanitization, and symptom-tracking. Make a plan for reintroducing high-risk staff back to the office, if applicable.
- A plan for managing patient expectations. Parents may be hesitant to come into the office, or eager to; determine the safety, sanitization, and organization measures your practice needs to keep everyone safe and reassured. Most importantly, communicate your plans and reassurance to your patients.
Further assistance for pediatricians includes loans via partners of the AAP, FMLA, employee retention credit, and a payroll tax deferral. Visit the AAP’s resources page for eligibility and additional information on these programs and opportunities.
Payment parity for telemedicine is a requirement for many practices in order to be feasible to continue long-term. Even as patients return to the office, telemedicine can be a useful tool for immunocompromised or travel-restricted patients and families. The AAP has been a strong advocate for continued payment parity, waiving any geographical restrictions, covering both COVID-19 and non-COVID-19-related visits.
What is your plan for telemedicine? You may be tempted to cut costs to an additional vendor, but a good plan for the foreseeable future may actually be to keep the option on hand for telehealth in case you need it -- especially if your practice was new to telemedicine prior to early 2020. If you chose a vendor more quickly than you might have otherwise, consider whether another vendor or plan would work better for your colleagues, staff, and patients.
You should also know how to get paid for telehealth visits. In the 2020 Users’ Conference course A/R and Billing Strategies, PCC’s Jan Blanchard encouraged physicians to ask carriers for the exact dates and requirements for eligibility for regulations including telemedicine payment parity -- this will help your practice know exactly where they stand and which dates can be covered.
Finally, you may wish to survey patients and families for their thoughts on telemedicine at your practice. Even if telemedicine may no longer be necessary for all patients, some families may simply find it accessible, convenient, or a comforting option to have.
Preparing for School Year 2020-2021
While you can begin a recovery plan right now, it’s difficult to foresee what the future holds. Below, we’ll list strategies for securing your revenue, as well as building a cushion for the future. By thinking proactively, you can ensure your patients’ health needs as well as your practice’s revenue needs are met, even when the unexpected happens:
Vaccines + Well Visits
A proactive vaccine program is essential for pediatricians to prevent a lapse in care in millions of American children whose schedules were delayed due to the pandemic. In July 2020, Chip Hart reported in the final Business Impact of COVID-19 webinar that PCC clients active in 2019 and 2020 are experiencing an 11% gap in rates for the MMR vaccine alone, with other vaccines trailing behind.
In addition, while there is not currently a COVID-19 vaccine available and we do not know if or how children will require one, in the event a vaccine becomes available, pediatricians will be on the front lines of navigating widespread vaccination campaigns.
Being proactive in vaccination and wellness visits will pay off for your practice’s revenue and for your patients’ health long term. Some options pediatricians across the U.S. have implemented include drive-thru wellness clinics, vaccinations in the car (anecdotally ideal for kids in car seats), and participation in the AAP’s immunization campaign, which practices can share on their social media. Practices might also consider diving deeper into their recall efforts -- patients in your EHR who are overdue for vaccines or well visits could be prompted to action by a phone call, email, or text. More patients could have their vaccines delivered at visits other than a well visit, where appropriate -- for example, at an E&M visit.
Behavioral Health Needs
Kids have been and will continue to be affected by the changes required in their lives by the pandemic, especially as decisions on school reopenings continue to fluctuate for the fall 2020 semester. It’s important to realize that kids finally adjusting to isolation measures may experience further disruption as conditions continue to change -- especially in cases where they are struggling with mental health, disabilities, or behavioral disorders.
While there is not currently much research on the subject, a JAMA Pediatrics study found that of a cohort of Chinese students under lockdown, 22.6% of them reported depressive symptoms and 18.9% were experiencing anxiety after 30 days.
In the mentioned Business Impact webinar, Chip further explained that PCC practices were increasing rates for certain behavioral health screenings, and he encourages this trend to continue, including but not limited to adolescent and maternal depression screenings. A member of the webinar suggested contacting AAP’s SOAPM forum to learn how to be paid for the latter screening.
Additional visits to consider to manage patient care and to secure practice revenue include complex care management (e.g. for ADHD, autism, sleep disorders) -- a visit or telemedicine check-in can round out the patient’s health history and introduce opportunities for more follow up.
Conservative Budget Plans
In the Business Impact webinar, Paulie Vanchiere made the case that pediatricians should continue to be conservative in their approach to practice finances, even as states and schools tentatively reopen. “There is nothing wrong with squirreling away a little too much cash over the next five to six months,” he said, explaining that if cautious physician-owners assertively manage cash flow and expenses, a plausible worst-case scenario could be that they receive larger owner profits at the end of the year instead of needing to apply for further lines of credit.
A budget plan a practice might enact to prepare for the coming months might include:
- A review of current finances: how much your practice depends on credit, the terms of loans, and current cash flow compared to early in the year
- If you’re able to, a plan to begin payments on loans and lines of credit as soon as possible.
- A budget for the practice’s needs as your office reopens. Will you need to purchase screens to distance patients? Equipment for visits outside? If patients need to be distant in the waiting room, will this reduce the number of patients you can see in a day?
- A plan for telemedicine. Continuing telemedicine visits will be important both for immunocompromised patients, as well as if there is a renewed need for families to isolate at home. However, stay up to date on payment parity.
- A Plan B -- a safety cushion of savings is never a bad idea, as Paulie explains.
- A plan for increased revenue: as mentioned above, it’s important for patient health and your practice’s financial health to actively recall patients for the visits that matter to your practice’s revenue. These could include well visits (especially those including vaccines), sports physicals, behavioral healthcare, and complex care management.
For more information on budgeting for the coming months, as well as many, many more resources, please visit the Business Impact of COVID-19 webinar series, hosted by PCC’s Chip Hart and The Pediatric Management Institute’s Paulie Vanchiere, which concluded its run on July 15, 2020. Paulie and Chip hosted a total of 14 webinars and 22 guest speakers during the months when pediatricians were struggling to keep afloat with the many obstacles and changes that the pandemic presented. The valuable information in the series lives on, with members’ comments and discussions, in the Business Impact forum -- be sure to stop by and continue the conversation! You might find the information in the Finance section useful; check it out below.