With Key Deadline Approaching, Paycheck Protection Program Still ‘Murky’ for In-Home Care Providers

The Paycheck Protection Program (PPP) was established by the Coronavirus Aid, Relief, and Economic Security (CARES) Act to encourage small businesses to keep workers on staff.

Yet despite over a month having passed since the program was implemented, smaller home health and home care companies remain confused about how to employ PPP — and whether they should pursue funds in the first place.

“A lot of the discussion I’ve had with providers who have been in [PPP] have said a lot of the guidance around it is a bit murky,” Darby Anderson, the chief strategy officer for Addus HomeCare Corporation (Nasdaq: ADUS), recently said on a webinar hosted by Home Health Care News. “So I would just encourage folks to make sure that they are getting legal counsel, and that they’re being cautious about the use of loans and attestations made about payments received, because — and I’m not being critical here — but it seems to be being done a bit on the fly from the congressional perspective.”


Now, businesses that have applied for PPP loans will need to make some hard decisions, particularly if their loan was for over $2 million.

Broadly, PPP recipients are broken up into two buckets: those that request and receive under $2 million — and those that received over $2 million. Previously, the Small Business Administration (SBA) has hinted that the latter group will be held to strict audits and back-checking to ensure PPP compliance.

With audits on the horizon, businesses that received more than $2 have until May 18 to decide if they want to return their loans and avoid potential future headaches. The time leading up to that date is a “safe harbor” period, according to Emina Poricanin, the managing attorney of Poricanin Law.


Over 95% of PPP loans were for less than $2 million. Those loans will seemingly be subject to less scrutiny, because SBA will presume that the borrower’s certifications of economic uncertainty were made in good faith.

If a borrower that receives more than $2 million is audited and found to be doing something wrong, it faces the prospect of being required to repay its PPP loan, with possible interest added on.

Unanswered questions

Even for the lower-tier borrowers, PPP questions remain.

Like a lot of the governmental funding in wake of the COVID-19 outbreak, terms and conditions have been fluid and unclear. Subsequently, allocating the money in ways that could later be rendered inappropriate has become a major concern.

Agencies, legal experts say, need to make sure that they can justify their usage of the money that is provided. But what it can be used for is also, at times, a confusing experience for businesses.

If a business uses the money, the idea is that it will keep its full-time staff on payroll. Some agencies have even added staff with the money they’ve received from the PPP loans, like Touching Hearts at Home Central Oregon, which has added five part-time staff members and plans to add two more.

The PPP loan is only forgiven if you are able to pay all of your workers during an eight-week period, beginning on the day you receive the money. But if business is volatile, as it is for home-based care agencies, that guideline is hard to follow.

At least 75% of the forgiven amount from PPP must be used for payroll, according to SBA.

“Forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels,” SBA’s website reads. “Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease.”

Even the seemingly straightforward description of PPP on the SBA’s website leads to a slew of questions on the provider side.

Struggling businesses don’t likely have the bandwidth to sift through loads of legal information to make a quick decision on receiving government funds, S. James Boumil, a Massachusetts-based attorney representing home health agencies, told HHCN.

“Most home health agencies find the [process] to be extraordinarily difficult,” Boumil said. “Most of these home health companies are being run by nurses and nurse aides. They’re not accountants.”

Boumil mostly represents smaller-sized companies with 200 to 500 employees.

“They find the paperwork to be very difficult, and they find the regulations to be impossible,” he said. “They call up and they’ll say, ‘Do we have to pay this money back? How much do we apply for? What can we use it for?’ Some of the regulations are really impossible.”

In fairness to the creators of PPP, the COVID-19 crisis could not be foreseen, nor was there a fair warning for the economic collapse that would immediately follow. But the program has been plagued by its hastiness.

Unlike some of the publicly traded companies who are able to keep government money tucked away while they wait for further clarification, smaller agencies need to use the money they have now.

“The federal government shoveled out all of this money so quickly without really having a crystal clear rubric for what it could be used for and what the terms and conditions were,” Boumil said.

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