THE MILLIONAIRE DENTIST™

The ultimate podcast for dentists and specialists
apple podcast logo overcast logo spreaker logo pocketcasts logo tunein logo iTunes Logo google podcasts logo iheartradio logo

EPISODE 90: HHS Phase 4 - What You Should Know

Steve Levy, CPA, stops by for a quick update on what the 4th Phase of HHS brings. Casey and Jarrod learn a thing or two.

WANT TO STAY UP TO DATE? SUBSCRIBE TODAY

 

EPISODE 90 TRANSCRIPTION

Announcer:

Hello, everyone. Welcome to The Millionaire Dentist Podcast, brought to you by Four Quadrants Advisory. On this podcast, we break down the world of dentistry finances and business practices to help you become the millionaire dentist you deserve to be. Please be advised, we do speak with an honest tongue and may not be safe for work.

Casey Hiers:

Hello and welcome. This is Casey Hiers back at The Millionaire Dentist Podcast with co-host Jarrod Bridgeman.

Jarrod Bridgeman:

Hey, how you doing?

Casey Hiers:

Good. How are you?

Jarrod Bridgeman:

Great.

Casey Hiers:

Looking dapper. And we also have special guests, Steve Levy. He is our resident attorney, even though we don't offer legal services officially. He's also a CPA, just one of those overachievers. You have six letters after your name. I have zero. I'm not feeling inadequate. We're good. Welcome.

Steve Levy:

Hello. Hello.

Casey Hiers:

So for our audience today, we have a time-sensitive topic. It's the Health and Human Services Distribution, AKA free money. It is taxed, but free money. So we brought Steven. He helps our clients make sure that all of their paperwork, for lack of a better word, or electronic work is submitted. We're on top of that as a concierge's firm, we do that for our folks, but we wanted to kind of do a public service announcement today for our listeners and potentially our listener's friends who could miss out on this. So Steve let's just kick it off first. Thanks for joining us, but what is this HHS phase four distribution all about?

Steve Levy:

Well, as the title says, this is phase four of what's been done basically in four phases. Up until now, the first one was a real minor phase of just small dollars. Two and three were substantial, some folks got in the six digits for a combined with the two phases. It's very similar to the prior two stages in that the government is looking to reimburse or supplement for lost wages, increased expenses as a result of COVID. And this is the way they're doing it. This is another phase they're doing it. It's a little different from the others, but we'll probably get into that a little later.

Casey Hiers:

Absolutely. Santa Claus is coming to town more free money. I know I've talked to a lot of practice owners who actually have more in their practice accounts than they've had in a long time and a lot of it is due to some of these things. I know some of them actually kind of feel a little bad about it, because they're they're doing well, but that's neither here nor there. If there's opportunities as a practice owner, somebody who took risk to go to dental school, to own a practice, to have staff and payroll. You took those risks. If this is part of what's going on, you at least need to be aware. I think that's important to understand. Walkthrough how somebody qualifies for this payment, who should be paying attention to this?

Steve Levy:

Well, we'll focus on dental providers, but it's really a broad spectrum of folks that are eligible as long as they're practicing in health. Even if they haven't been doing for very long, it could even be those that started in 2020.

Casey Hiers:

Like Healthcare, anything, health-related?

Steve Levy:

Anything health-related.

Casey Hiers:

How about if somebody opens a massage business

Steve Levy:

That might not qualify, that might be on the fringe of qualification. If they're writing a prescription of any type, that might qualify? There are certain databases that the health and human services will crosscheck to make sure it's in one of their qualifying categories for that.

Casey Hiers:

I would imagine a majority of our listeners qualify, but just curious. Jarrod, I know you're trying, you got an up-and-coming massage business.

Jarrod Bridgeman:

I was trying to think of a way to get some of that free money for myself. To be honest.

Casey Hiers:

I saw the wheels turning.

Jarrod Bridgeman:

I was trying, man. I was trying.

Casey Hiers:

Well, that's why you need to consult the attorney and CPA in house so you don't get yourself in trouble.

Steve Levy:

That's right.

Jarrod Bridgeman:

Steve. Okay, so let's say I did have a medical-type business and I can apply. How do I? What do I have to do to apply for this?

Steve Levy:

Well first of, you have until October 26th to apply. So there is time, although there's a process for it. The Health and Human Services website has a spot for you to apply, and many are familiar with that website, who have received phase two and phase three funds. It's a very similar process. The only wrinkle in this one is that you have to get your identification number verified first and they'll run that against the database of medical providers in order to continue on the process. Now they're saying that could take up to four days. So really they're wanting, in a recent webcast they said, they're wanting people to start this early so that there's enough time to get all the information gathered and submitted on time.

Casey Hiers:

If you're talking about a government entity that says they need four days, so that's a week.

Steve Levy:

Yeah. I would say, so that's a week.

Casey Hiers:

Yeah. And so we'll put this podcast out soon, but you know the urgency.

Steve Levy:

Yeah. Certainly.

Jarrod Bridgeman:

Is it pretty extensive? The paperwork?

Steve Levy:

No, it's not too bad. Now, it is a little broader than other phases, where other phases have focused in on a certain quarter. What you'll generally do is submit your last filed practice tax return, as well, you're going to submit three quarters of profit and loss that are the last two quarters of 2020 and the first quarter of 2021, plus comparable quarters of 2019 because they want to see how it compares, to see if you did kind of suffer a loss, both on the revenue side and increased expenses. That's what they're focused on in their evaluation.

Casey Hiers:

So if you could have a good dental CPA, you can get that information within the hour. Those who have a poor standard of care, it might take another week to get that from their team and then if they have to do the cross reference, that can be another week. So when you talk about time urgency, there is something to that now. So it's fairly extensive but manageable for folks to do, how will they evaluate how much to give each applicant?

Steve Levy:

Well, like I mentioned, they will be seeing how your revenue was affected in quarter two, quarter three of 2020, and quarter one of 2021 versus the similar revenue and expense comparison for 2019, which was generally a clean year. But for 2020, as we know, there's been a decrease in revenues and an increase in even COVID-related expenses or general expenses. So while it's not a definite formula, that's generally what they're saying they're going to evaluate.

Steve Levy:

I will say there are two components to this application. One is that it's that general analysis of how revenues and expenses have gone. Then the second one is a rural component and that is that if you are serving folks that live in rural communities, then you can also get a distribution related to that. Now, it doesn't mean that your office has to be in a rural location. It just means that you may be serving rural communities. You may not know if they live in a rural community, so basically what the HHS recommends is if you want to be considered for this rural distribution, go ahead and check a box that you want to be considered and it will have through its magical database, figuring out if you have rural clients. It's generally rural clients that are on some sort of government help such as Medicare, Medicaid, Chip, that kind of thing.

Casey Hiers:

Why does it matter if somebody's a rural patient?

Steve Levy:

They feel that rural patients may be underserved and that they may not have the means to-

Jarrod Bridgeman:

And they have to drive farther.

Steve Levy:

Right, they have to drive farther and that at there aren't as many healthcare providers for rural folks.

Casey Hiers:

It sounds like our government underestimating the ingenuity of the citizens. I'm having a hard time making this connection like there's a farmer that lives in a rural area and they don't think they can hop in their truck and drive 20 miles to get their tooth fixed.

Steve Levy:

I'm not really sure what they're thinking is there, but they've had this carve-out.

Casey Hiers:

Fascinating. Yeah. Fascinating. That's why we have you on. I'm learning things as I go. Wow, a rural bonus.

Steve Levy:

Right.

Jarrod Bridgeman:

All right, so let me say this. Let me ask you, if I get the payment, right?

Steve Levy:

Yes.

Jarrod Bridgeman:

From there, what would be the next step? Once I have it, do I just start spending?

Casey Hiers:

Well, hold on Jarrod. That's a great question but I had a hypothetical that I wanted to ask before I went on my rural tangent. So let's say, in 2019 quarter one, $150,000 in revenue.

Steve Levy:

Okay.

Casey Hiers:

In 2020, $50,000.

Steve Levy:

Okay.

Casey Hiers:

In 2021 back to $150,000.

Steve Levy:

Okay.

Casey Hiers:

They apply for this. Are they going to get any money?

Steve Levy:

Well, we're not quite sure. They're going to compare quarter to quarter. So let's say quarter one 2019 is going to be compared with quarter one of 2021. So then quarter-

Casey Hiers:

How about if they're very similar?

Steve Levy:

If they're very similar? Well, there's different factors. There's not a clear formula and some may be denied but it's definitely worth applying for, just in case. There is that magic formula where they will receive the funds.

Casey Hiers:

Because of a rural component.

Steve Levy:

There is a rural component, that might be the big bonus they're hoping for.

Casey Hiers:

So, the message is apply, apply, apply. But there is a big unknown if this is what this could look like.

Steve Levy:

Absolutely. Because there hasn't been a huge amount of guidance for the prior to, typically what they've said in the prior to is that we're going to go with just 2% of your revenues and that's it. But this is a little more ambiguous as far as what might actually come to you.

Casey Hiers:

Interesting. Jarrod, what was your question again that you wanted to ask?

Jarrod Bridgeman:

Oh man, that was so important. No, but it is. So it was, if I receive the money, what's the next step?

Steve Levy:

So the next step, and this also applies to prior distributions in phase two and phase three, what you have to do is attest that you accept the money and this is done online. Once you receive the money, you have to attest that you received the money and that you agree to terms and conditions. Now, this is similar to terms-

Casey Hiers:

Well, well, well. What are these terms and conditions? Okay, are these the strings attached?

Jarrod Bridgeman:

Is this the thing at the end of like a webpage, I just kind of click check and-

Steve Levy:

Not quite, there are steps to take once you receive them. Now, the terms and conditions that you are agreeing to are really that you're going to not spend it wildly. You're going to spend it on your practice, which you will or it's to replace revenues. It's generally going to go in your practice, you're not going to go spend like some PPP recipients have spent on Lamborghini and wild things like that. You're not going to go with that. You're not going to spend it on anything illegal.

Casey Hiers:

How about if you had an in house masseuse for your dental practice and patients that come from a rural area who are just so exhausted from that car ride-

Steve Levy:

Right, now we're really combining elements and business purposes. That's what they're looking for so if there's a true business purpose for any of what you said, then you can go for it.

Casey Hiers:

Lot of creativity. Yeah. I mean, as a kid, the terms and conditions to getting gifts from Santa Claus was you had to be a good boy or girl. And so understanding the terms and conditions of this free money is good to know. So business purpose, that's the criteria.

Jarrod Bridgeman:

So you still have to be a good boy or girl.

Casey Hiers:

And you can be creative.

Steve Levy:

You can be creative. Certainly like if you need equipment, that's something that can be done. Really it's just going to your bottom line, your normal expenses that you would've spent before. There's also a reporting requirement, which is going to be coming for phase two and phase three recipients two, where it's going to explain. This is what you use the purpose for. This is what you use the funds for, it's you didn't spend it on anything lavish, that kind of thing. But we're going to see more of what that means later on. But with each of these phase distributions, there is that reporting that's going to be needed. Which it really isn't anything and we're going to do that for our clients. So it's not a big deal.

Casey Hiers:

Well, good. Steve, I appreciate you coming in here, again. Time-sensitive information and opportunity for practice owners and primarily our listeners to be able to apply for this and potentially get some funds to put back in the practice to help with the practice and that's a good thing. Anything else that we haven't covered that we need to mention about this?

Steve Levy:

One thing that I learned in a recent webinar is that HHS really wants people to receive this and they are thankful that dental providers and other healthcare providers are on the front lines of providing services for the public in these trying conditions. They stress that we thank you for all your efforts, and this is their, thank you. This is the government's thank you for those efforts.

Jarrod Bridgeman:

That's sweet.

Casey Hiers:

What'd Ronald Reagan say his famous quote, the nine scariest words in the English language? "I'm from the government and I'm here to help."

Jarrod Bridgeman:

Yes. Oh yeah.

Casey Hiers:

No, I joke, but hopefully. When you said terms and conditions my antennas went up, but so the government just genuinely wants to help and thank people. That's wonderful.

Steve Levy:

They really do.

Casey Hiers:

Fantastic. Steve, thanks for joining. Jared, that massage business. I'm telling you, bud. All right, guys.

Steve Levy:

Excellent.

Jarrod Bridgeman:

Thank you.

Announcer:

That's all the time we have today. Thank you to our guests for their insight and for sharing some really great information. And thank you to you, the listener, for tuning in. The Millionaire Dentist Podcast is brought to you by Four Quadrants Advisory, to see if they might be a good fit for you and your practice go on over to fourquadrantsadvisory.com and see why year after year, they retain over 95% of their clients. Thank you again for joining us and we'll see you next time.