Employee Retention Credit Will Not Impact Care Center Rates

Posted on March 16, 2023 by Jeff Bostic

Earlier this week, Senator Amy Klobuchar’s office informed LeadingAge that the Centers for Medicare and Medicaid Services (CMS) will tell states with cost-based care center payment systems like Minnesota’s to treat Employee Retention Credit (ERC) funds like other federal CARES Act relief funds.

That means that care centers that receive those funds will not have them offset against costs when rates are set, which gives them a stronger incentive to apply if they are eligible. We appreciate the successful advocacy of LeadingAge, our national partner, with CMS on this important issue.

More resources

LeadingAge has also partnered with the national accounting firm FORVIS to give members access to helpful resources for applying for the ERC.

• A free webinar on applying for the ERC as a long-term care setting
• An article on how to satisfy the IRS requirements for documentation and substantiation

The webinar’s relevant highlights for members include how to evaluate whether a government order applies; specific examples of partial suspension of business operations (e.g., CMS orders restricting visitors, third-party service providers, and occupancy;) and how to show a measurable decline that satisfies “nominal impact,” such as a decline in census or resident days. Additionally, the webinar talks about how to correctly claim the PPP and ERC for the same eligible quarters and the importance of including healthcare benefits paid into the wage calculations.