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Covid-19 Bulletin: Senior Living Seeks More Access To SBA Relief Program; Congress Fights Over PPE Measure

Senior Housing News recognizes the seriousness of the Covid-19 pandemic, so we will be updating this bulletin to keep you apprised of the latest developments, focusing on news and information that we identify as especially pertinent to senior living. The team at SHN knows how important your work is right now; we thank you and your teams, and encourage you to reach out to us individually or at editor@seniorhousingnews.com with news items, topics that you believe are important for coverage, or other feedback.

Bulletin for Monday, April 13, 2020:

Senior living industry associations are urging the Small Business Administration (SBA) to increase providers’ access to the $350 billion Paycheck Protection Program (PPP).

The PPP was established through the CARES Act federal stimulus package, and offers forgivable loans to businesses with fewer than 500 employees. However, affiliation rules limit the ability of senior living providers to access these funds. Although a particular senior living community may employ fewer than 500 workers, that community may be affiliated with a larger operating company that exceeds the workforce eligibility threshold.

The CARES Act waived the affiliation rules for certain types of accommodation and food service businesses that are classified under NAICS codes beginning with 72. Argentum and the American Seniors Housing Association (ASHA) are urging SBA Administrator Jovita Carranza to make similar exceptions for senior living.

“For example, the description for NAICS code 623312, ‘Assisted Living Facilities

for the Elderly,’ is functionally equivalent to the description for NAICS code 721310, ‘Rooming and Boarding Houses, Dormitories, and Workers’ Camps,’” the associations wrote in an April 7 letter to Carranza. “The main difference between these two NAICS codes is that code 623312 is limited to residential services for the elderly.”

On April 12, the American Bankers Association reported that $205 billion of the $350 billion PPP already had been claimed. The Treasury Department has requested $250 billion more for the program, but Congress has not yet passed that additional funding.

Also in the news:

— Congressional lawmakers sparred over several issues of importance to senior living, including the production and distribution of personal protective equipment (PPE), the availability of funds through the Payroll Protection Program (PPP), and premium pay for workers deemed “essential” during the pandemic.

Late last week, the Treasury Department sought an additional $205 billion in funding for the PPP, but Democrats blocked that effort, wanting to include other provisions in the relevant bill. On Monday, Democratic leaders provided more details about what they are seeking, including more funding for PPE and Covid-19 testing.

“We Democrats demand adequate funding for the production and distribution of national rapid testing and Personal Protective Equipment (PPE) – it cannot wait,” Speaker of the House Nancy Pelosi and Senate Minority Leader Chuck Schumer wrote in a joint statement.

Also on Monday, Democratic Sen. Elizabeth Warren of Massachusetts and Democratic Rep. Ro Khanna of California released an “Essential Workers Bill of Rights,” which includes provisions that they would like to see included in the next Covid-19 financial stimulus and aid package. These provisions for workers deemed “essential” during Covid-19 include universal paid sick leave, access to child care and “premium pay.”

The premium pay should “provide meaningful compensation for essential work, be higher for the lowest-wage workers, and not count towards workers’ eligibility for any means-tested programs. It must be retroactive to the start date of the pandemic, and not used to lower the regular rate of pay for any employee,” the Bill of Rights states.

The Bill of Rights also calls for treating essential workers as “experts” and including them in developing plans for distribution of PPE.

Many senior living providers are already offering child care benefits and boosts to workers’ pay rates.

— The Internal Revenue Service (IRS) has extended deadlines relevant to real estate developers and investors. For taxpayers facing a deadline between April 1 and July 14 of this year to invest capital gains in an opportunity zone fund, the deadline now has been moved to July 15. And like-kind exchange deadlines that would normally fall between April 1 and July 14 also have been extended to July 15.

— Covid-19 outbreaks in assisted living communities could lead to more regulatory scrutiny and oversight in the future, according to a special report on seniors housing from Marcus & Millichap.

“The outbreak has illustrated how many communities are not positioned to provide additional levels of medical care, which could place the sector under scrutiny as oversight has historically been relaxed,” the report states.

Bulletin for Friday, April 10 – Sunday, April 12

The CARES Act federal stimulus package included a $100 billion fund for health care providers, and that money is now being disbursed — still with no guarantee that senior living providers will be among the recipients.

On Friday, payments began to be distributed to hospitals and other Medicare and Medicaid fee-for-service providers. They will receive the first tranche of payments, which will total $30 billion. The second tranche will be released within the next 10 days and will go largely to providers serving Medicaid beneficiaries.

Argentum and the American Seniors Housing Association (ASHA) have been urging the Department of Health and Human Services to allocate $20 billion of the fund for senior living providers. ASHA continues to call on members to contact their Congressional representatives, and is now urging more focus on getting access to the fund, versus pushing for a particular dollar amount.

ASHA President David Schless and Argentum CEO James Balda still believe that senior living providers could gain access to the CARES Act fund, they told Senior Housing News in a joint interview Friday.

“I have not lost hope that there will be funding in that grant program that our members will be able to take advantage of,” Schless told SHN.

The senior living industry is facing a potential financial hit in the range of $40 billion to $57 billion due to Covid-19, a recent analysis found.

The CARES Act also established a $350 billion forgivable loan program through the Small Business Administration (SBA), which is an option for smaller providers.

A fourth federal stimulus package is under discussion, which could provide another vehicle for the senior living industry to receive financial assistance.

Also in the news:

— In the first quarter of 2020, senior housing and care merger and acquisition activity fell to its lowest level in two years.

That’s according to the latest data from Irving Levin Associates, which showed 93 deals occurred in Q1 2020. This is the lowest level since Q1 2018 and well behind the pace of 2019, when 450 transactions were publicly announced and more than 600 were likely completed, Ben Swett wrote Friday on the Senior Care Investor.

In terms of deal breakdown, senior housing accounted for 62% of transactions closed in the first quarter of this year, compared with 38% for skilled nursing.

Considering that M&A activity was ongoing until Covid-19 reared its head in mid-March, the pandemic cannot account for all of the decline in deal volume, Swett noted.

On Thursday, the National Investment Center for Seniors Housing & Care (NIC) released data showing the rolling four-quarter cap rate for senior housing deals was at 5.9% in the fourth quarter of 2019, while the rolling four-quarter price-per-unit was $209,595.

Needless to say, Covid-19 has disrupted not only the volume of deals being completed but valuations, with senior housing among the property types to take a hit, perhaps as much as 30%, according to a Green Street Advisors analysis released last week.

— Industry associations are urging assisted living and skilled nursing providers to report all cases of Covid-19 to local health departments and other authorities, to support efforts to distribute personal protective equipment — which is in critically short supply.

“As reported cases of COVID-19 continue to increase, good data is more important than ever before in this pandemic,” said Katie Smith Sloan, president and CEO of LeadingAge. “We underscore our earlier recommendation to our nursing home members that reporting COVID-19 positive cases to their local health departments is paramount. With supplies of personal protective equipment and testing resources in extremely short supply nationwide, case numbers are a critical piece of information to help determine supply prioritization. We fully expect that consistent reporting of cases will lead to adequate and timely access to PPE and testing.”

The American Health Care Association/National Center for Assisted Living (AHCA/NCAL) is calling on long-term care providers to report Covid-19 cases to their state survey agency, as well as health departments, and all residents, families and staff.

“Today, AHCA/NCAL updated guidance to long term care providers about the need to notify their state survey agency about COVID positive residents and staff,” AHCA/NCAL President and CEO Mark Parkinson stated in a Saturday press release. “We encourage this information be shared with CMS, CDC and FEMA. We believe this information can help identify long term care providers who are most in need of testing and PPE resources.”

— The Centers for Medicare & Medicaid Services (CMS) proposed a $2.3% increase to the skilled nursing facility Medicare rate for 2021. The agency floated a 2.6% hike for hospice providers.

— More than 2,000 nursing home residents in the New York region have died of Covid-19, The New York Times reported.

— Aegis Living and the Clark Family Foundation have launched an initiative called Seattle Seniors Strong, in an effort to provide services and supports for the city’s population of homeless and homebound seniors as they face Covid-19 challenges.

Through May 31, Aegis and the Clark Family Foundation will be matching all donations by businesses and individuals, up to $50,000, to two organizations: Sounds Generations and Pike Market Senior Center.

— Architects with Bremerton, Washington-based firm Rice Fergus Miller suggest how Covid-19 could change senior living communities in the article “Designing for a Pandemic.” The authors contemplate ways to facilitate resident isolation when needed and create buildings that are more robust from an infection control standpoint.

— ATI Advisory, a research and consulting firm focused on health care and aging, has released a Covid-19 framework for post-acute care. The framework suggests a “four-stage, regionally oriented approach to achieving optimal, system-wide resource allocation across a region’s post-acute service settings and providers over time.” The Covid-19 crisis is changing the role that post-acute and senior care providers play within the health care system, as they are being called upon to take patients who otherwise might go to acute-care hospitals, and are under more pressure than ever to prevent residents from going to the emergency room or other settings where they could contract the novel coronavirus.

— Pen pal programs have sprouted up around the globe to connect residents of senior living communities with kids and teenagers, who are out of school due to Covid-19, The New York Times reported.

“It makes a connection between a younger person and an older person,” a 79-year-old Bickford Senior Living resident told the Times. “It’s interesting for me to hear what these young people are doing.”

Click here to see Covid-19 News Bulletins from previous weeks.

The post Covid-19 Bulletin: Senior Living Seeks More Access To SBA Relief Program; Congress Fights Over PPE Measure appeared first on Senior Housing News.

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