Physicians' offices hard-hit by the COVID-19 pandemic received a significant share of forgivable small-business COVID-19 relief loans, according to new government data.
After intense public pressure, the Treasury Department and Small Business Administration released loan-level data about Paycheck Protection Program loans above $150,000. The healthcare sector received more than 12% of the total loans disclosed, and the biggest recipients in the healthcare sector were physicians' offices.
Physicians' offices received at least $8.4 billion in PPP loans, according to the dataset. The COVID-19 pandemic has ravaged primary care practices' revenues, and many healthcare industry analysts expect that consolidation could ensue in the coming months as practices in financial peril evaluate their options.
Skilled-nursing facilities received at least $3.4 billion, home health services providers received at least $3 billion, dentists received at least $2.2 billion, and hospitals received at least $2 billion.
Physicians' offices and dentists were initially the hardest-hit portions of the healthcare sector in March and April. Dentists' offices shed 503,000 jobs in April, and physicians' offices lost 243,000. However, things are looking up, as dentists saw the strongest recovery in the healthcare sector in May, adding back 244,800 jobs, and physicians' offices added 51,300.
Nursing homes, however, are still losing jobs as of June employment data, and a Moody's Investors Service report from May said that the pandemic was hurting the nursing home and senior living sectors more than any other sector of U.S. public finance.
Many hospitals didn't qualify for PPP loans because they are only open to businesses that employ 500 people or fewer. The SBA chose to apply affiliation rules that counted many hospitals' affiliated physician practices toward the employee threshold. The affiliation rules and related guidance also led to many medical practices owned by private equity firms being shut out of the aid program, despite lobbying efforts to include them.
The SBA allowed most community-owned hospitals to apply for PPP loans in April, as long as the facilities receive less than half their funding from state or local government sources, exclusive of Medicaid. However, hospitals in bankruptcy proceedings aren't eligible for the loans, an appeals court ruled.
Congress tweaked the PPP program in June. The changes gave borrowers 24 weeks instead of eight weeks to spend the PPP funds, allowed them to delay paying payroll taxes, and would only require them to spend 60% of the loan expenses on payroll costs instead of 75% as originally stipulated.
The data release accounts for nearly 75% of the loan dollars, the agencies said. The PPP loans are forgivable as long as borrowers use the loans for specified expenses.
Tim Broderick contributed reporting to this article.
