In the early days of the COVID-19 pandemic, Congress passed the Paycheck Protection Program (PPP), as part of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), to make loans to employers to keep workers employed during the pandemic (and to pay “other eligible expenses”). Most of the loan money could be forgiven, meaning that repayment was not required, if at least 60 % of the proceeds were spent on payroll. In “How the Paycheck Protection Program went from good intentions to a huge free-for-all,” NPR discussed massive fraud in the PPP program.
An early analysis in 2021, “Distribution of Paycheck Protection Program Loans to Healthcare Organizations in 2020,” found that nursing and residential care facilities received 25,172 PPP loans (5.6% of all PPP loans nationwide), for a total of $10,480,082,180 (18% of all PPP loans nationwide).
A new study analyzes 1,807 nursing facilities that received PPP loans, with a median loan of $664,349 (and a range of $407,000 to $1,058,300). Using a median cost of a CNA as $30,290 annually and $14.56 hourly, the study calculates that facilities would have been able to pay for “43,956 additional CNA hours with the loan that they received” (or “17,153 additional RN hours”). However, it finds that 12 weeks after receiving a PPP loan, facilities actually increased the hours of certified nurse aide (CNA) time by only 26.19 hours per week (slightly more than one hour per day) and licensed practical nurse time by only 6.67 hours per week (slightly more than a quarter of an hour per day). Registered nurse hours were not significantly affected by PPP loans.
Nursing home staffing levels increased in only minimal ways after nursing facilities received hundreds of thousands of dollars in PPP funds. Where did the rest of the PPP money go? How did facilities spend the bulk of the $10.5 billion that they received in PPP funds?
The study reinforces two essential points. First, nursing facilities must be held fully accountable for all funding they receive, whether Medicare or Medicaid reimbursement or PPP dollars or any other “bonus” or “quality” payments. Second, facilities should not receive additional public funding unless it is accompanied by stringent accountability and enforcement measures. Residents, staff, families, and taxpayers deserve no less.
August 3, 2023 – T. Edelman