Additional Capital for Small and Mid-Sized Businesses.

The Fed can purchase up to $600 billion in loans through the Main Street Lending Program.

NIC continues to provide updates on the many aspects of the COVID-19 pandemic effecting the seniors housing and care industry. In keeping with NIC’s mission of providing information and transparency to operators and other stakeholders, it is important to understand the latest announcements from the government and other influencing sources that may affect the sector in this difficult time.

Congress has moved at breakneck speed in an attempt to provide relief for businesses and individuals. Thus far, Congress has approved three coronavirus relief and economic stimulus bills, while regulators continue to make adjustments to rules to provide additional relief as quickly as they can. Information is changing rapidly, which is adding to a very dynamic situation. In addition, the Federal Reserve has made history by implementing extraordinary measures to provide stimulus and ensure credit continues to flow to businesses.

The latest move from the Federal Reserve is to provide up to $2.3 trillion in liquidity commitments to support the economy. This policy is aimed to help households, small and medium-sized businesses, and support state and local governments to issue debt in order to provide critical services during the pandemic. This latest liquidity commitment suggests the Fed will do whatever it takes to support the economy during this economic recession. As part of this commitment, and relevant to the seniors housing and care sector within this historical development, is the Main Street Lending Program that will permit small and medium-size businesses to obtain bridge financing through eligible lenders.

Through this lending program, the Fed will ensure credit flows to small and mid-sized businesses with the purchase of up to $600 billion in loans. The Department of the Treasury, using funding from the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) will provide $75 billion in equity to the lending facility. Businesses that were in good financial standing before the crisis could be offered 4-year loans to companies employing up to 10,000 workers or with revenues of less than $2.5 billion. Payments, including principal and interest payments, will be deferred for one year and eligible banks may originate new Main Street loans or use Main Street loans to increase the size of existing loans to businesses. In addition, firms seeking Main Street loans must commit to make reasonable efforts to maintain payroll and retain workers. Businesses that do not qualify for the Paychecks Protection Program (PPP) may welcome this new lending facility to help through the crisis. For clarification, businesses that have also taken advantage of the PPP may also take out Main Street loans. Potential borrowers are encouraged to discuss the details with their trusted banking relationships.

Currently there are two Main Street Lending Facilities which are 1) Main Street New Loan Facility and 2) Main Street Expanded Loan Facility. The Federal Reserve did state that as the program is being finalized, it will continue to seek input from lenders, borrowers, and other stakeholders to make sure the program supports the economy as effectively and efficiently as possible while also safeguarding taxpayer funds. Comments may be sent until April 16. 

NIC will continue to communicate as necessary to the seniors housing and care sector as more information becomes available. The links below can be useful for information from the Federal Reserve regarding the Main Street Lending Program, which includes two Loan Facilities:

Main Street New Loan Facility:

https://www.federalreserve.gov/newsevents/pressreleases/files/monetary20200409a7.pdf

Main Street Expanded Loan Facility:

https://www.federalreserve.gov/newsevents/pressreleases/files/monetary20200409a4.pdf

The Centers for Medicare and Medicaid Services (CMS) have taken numerous critical steps to ensure U.S. health care facilities are prepared to respond to the threat of disease caused by the 2019 Novel Coronavirus. These actions include deadline extensions, policy waivers, benefit expansions, and a reprioritization of certain surveys to grant flexibilities to skilled nursing operators and allow them to take the necessary steps to provide uninterrupted care to their communities.

The federal response has centered around temporarily removing regulatory barriers while the public health emergency and national emergency remain in effect. CMS’ announcements have come continuously throughout the rise of the COVID-19 pandemic and affect myriad aspects of the seniors housing and care industry, including facility infection control, resident safety, reimbursement, workforce training, and certification requirements. As the COVID-19 crisis endures, CMS will continue to provide additional recommendations and guidance to safeguard residents of these communities.

To keep seniors housing and care operators and investors up to date on the latest policy changes, National Investment Center for Seniors Housing and Care (NIC) is consolidating relevant announcements in a single place with the COVID-19: CMS Regulatory Review. The policy summaries will be available in the NIC COVID-19 Resources Center, along with other complimentary initiatives designed to inform the industry, even at today’s rapid pace of change.

The sixth edition of the NIC Investment Guide: Investing in Seniors Housing & Care is scheduled to publish in fall 2020. We invite your organization to submit photos of seniors housing and nursing care properties to be featured within this publication.

The NIC Investment Guide is a primer for understanding the seniors housing and care sector. It provides the most reliable industry data for investors to help them evaluate risks and returns, and to fine-tune their individual investment strategies.

What We’re Looking For:

• Images of property interiors or exteriors (new and older properties).
• Images of property amenities.
• Images may include non-posed shots of residents.

Visit NIC.org to easily upload one or more photographs, along with captions. Images must be high resolution and use a common file format: JPG, JPEG, or PNG. Photos must be received by Friday, May 15, 2020, to be featured in the NIC Investment Guide.

The Department of Labor reported that 6,606,000 Americans filed for unemployment insurance benefits in the week ending April 4, 2020 as the COVID-19 pandemic caused businesses to reduce or furlough their workforces. This was a very slight decline of 261,000 from the previous week’s upwardly revised record high level of 6,868,000. The speed and scale of the job losses is unprecedented. In the past three weeks, more than 16 million people have filed claims. At its worse during the Great Recession, there were 665,000 first-time claims filed in the week ended March 28, 2009. That was second only to the week ended October 2, 1982, when 695,000 first-time claims were filed.

Continuing claims for regular benefits, which are reported with an extra week’s lag, rose 4.4 million to 7.5 million.

The largest increases in initial claims for the week ending March 28 were in California, New York, Michigan, Florida, Georgia Texas and New Jersey.

This week’s increase in unemployment claims marks the third consecutive week of surging jobless claims and provides a window into the magnitude of the economic downturn into which we are solidly moving. Economists from a Wall Street Journal survey now project a spike in the jobless rate to 13% by June from its 50 year low of 3.5% as recently as February. In March, the rate had already increased to 4.4%. This same group of economists predict that real GDP will contract at an annual rate of 25% in the second quarter. In March, the expectation had been a decline of merely 0.1%. For the full year of 2020, GDP is projected to decline by 4.9%. In 2019 it grew by 2.3%.

In response to the expected sharp slowdown in the economy, the President signed into law a $2 trillion economic stimulus rescue package that broadly expands unemployment benefits. Independent contractors and self-employed individuals are now eligible, at least in some cases. More fiscal stimulus packages are expected to be enacted in the coming months to further blunt the economic fallout of the COVID-19 pandemic.

The Centers for Medicare and Medicaid Services (CMS) have taken numerous actions in response to the coronavirus pandemic. This blog is intended to capture the latest announcements from CMS. For prior CMS summaries please click here.

The following are the latest summaries and links to CMS for further details.

Expansion of CMS Accelerated and Advance Payment Program

The Centers for Medicare & Medicaid Services (CMS) has announced an expansion of its accelerated and advance payment program for Medicare participating health care providers and suppliers, to ensure they have the resources needed to combat COVID-19. Accelerated and advance Medicare payments provide emergency funding and addresses cash flow issues based on historical payments when there is disruption in claims submission and/or claims processing. CMS is expanding the program for all Medicare providers throughout the country during the public health emergency related to COVID-19. The payments can be requested by hospitals, doctors, durable medical equipment suppliers and other Medicare Part A and Part B providers and suppliers.

https://www.cms.gov/files/document/Accelerated-and-Advanced-Payments-Fact-Sheet.pdf

CMS Facility without Walls (Temporary Expansion Sites)

In an effort to ensure that local hospitals and health systems have the capacity to handle a potential surge of COVID-19 patients, CMS took action to allow temporary expansion sites (also known as CMS Hospital Without Walls). This means that a long-term care (LTC) facility can temporarily transfer its COVID-19 positive resident(s) to another facility. The facility that is transferring a resident does not have to issue a formal discharge in this situation because it will still be considered the provider and will bill Medicare. The facility transferring will then be responsible for reimbursing the other provider that accepted its resident(s) during the emergency period. This will help residents with COVID-19 by placing them into facilities that are prepared to care for them, which is consistent with recent CDC guidance. In addition, it will help residents without COVID-19 by placing them in facilities without other COVID-19 residents, which will mitigate the risk of spreading the virus.

https://www.cms.gov/files/document/covid-long-term-care-facilities.pdf

CMS Issues Critical Recommendations

The Centers for Medicare & Medicaid Services (CMS) and the Centers for Disease Control and Prevention (CDC) issued new recommendations to state and local governments and long-term care facilities to help mitigate the spread of COVID-19. CMS issued new guidance while highlighting that long-term care facilities are a critical component of America’s healthcare system and they are unique, as they serve as both healthcare providers and as full-time homes for some of the most vulnerable Americans. To address this spread, CMS is working with CDC to provide nursing homes with clear guidance on how they can keep their residents safe. The recommendations include the following:

• Nursing homes should immediately ensure that they are complying with all CMS and CDC guidance related to infection control.
• CMS urges state and local leaders to consider the needs of long-term care facilities with respect to supplies of PPE and COVID-19 tests.
• Nursing homes should immediately implement symptom screening for all staff, residents, and visitors – including temperature checks.
• Nursing homes should ensure all staff are using appropriate PPE when they are interacting with patients and residents, to the extent PPE is available and per CDC guidance on conservation of PPE.
• To avoid transmission within nursing homes, facilities should use separate staffing teams for residents to the best of their ability, and the administration urges nursing homes to work with state and local leaders to designate separate facilities or units within a facility to separate COVID-19 negative residents from COVID-19 positive residents and individuals with unknown COVID-19 status.

https://www.cms.gov/files/document/4220-covid-19-long-term-care-facility-guidance.pdf