Ignoring this Program is Costing You Millions

Ignoring this Program is Costing You Millions

While the pandemic continues to have devastating and staggering impacts on the health of the American people, it did push telehealth into the forefront of the medical industry – granting millions access to crucial care from home. In addition to the expansion of telehealth services, construction professionals are anticipating several new trends when it comes to building hospitals, urgent care centers, and other facilities in 2021 and beyond. Picture wider hallways and expanded waiting rooms to accommodate social distancing practices, updated HVAC systems, and a focus on automation to cut down on the number of surfaces that have previously required touching. For you, this might mean investing in new facilities for clinical expansion. If that’s in your future, look no further than the 504 loan program to access millions of dollars.

What is the 504 program?

It provides long-term, fixed-rate financing for major fixed assets that promote business growth and job creation. Generally, these loans max out at $5 million, but can go up to $5.5 million for “Small Manufacturers” and for certain energy projects. 504 loans are available through Certified Development Companies (CDCs), the Small Business Association (SBA) community-based partners, and the loan is distributed among three parties. The business owner puts up a minimum of 10%, a conventional lender (typically a bank) puts up 50%, and a CDC puts up the remaining 40%. Most businesses find that when their 504 loan closes, the rate is highly competitive with other financing options, making this an accessible, cost-effective opportunity you may not have tapped into. Ultimately, it’s a chance for you to hold onto as much-coveted working capital as possible.

How could your medical company benefit?

SBA 504 loan money can be used to buy a building, finance ground-up construction or building improvements, or purchase heavy machinery and equipment. You can also use the loan for the improvement or modernization of land, streets, utilities, parking lots and landscaping, or existing facilities.

To be eligible, your healthcare facility must:

  • Operate as a for-profit company
  • Have a tangible net worth of less than $15 million
  • Have an average net income of less than $5 million after federal income taxes for the two years preceding your application

The range of businesses that could qualify for commercial real estate lending extends across a wide spectrum, including:

Individual medical providers: like dentists, doctors, optometrists, physical therapists, or counselors needing more office or treatment space.

Medical and healthcare groups in the same class, with the same needs, seeking more room to treat patients.

While each of these facilities has unique real estate needs, they are all considered ‘owner-occupied’ healthcare businesses, which makes them eligible for SBA 504 financing. Additionally, businesses must meet the SBA’s definition of a small business, which typically means fewer than 250 to 1,500 employees. One of the most notable borrower benefits? Because payments are consistent over the term of the loan, the long-term, fixed interest rates make it easier for your company to budget each month. Keep in mind that a 504 loan cannotbe used for working capital or inventory, consolidating, repaying, or refinancing debt, or speculation or investment in rental real estate.

How do you apply?

The first step to apply is to contact your bank to learn more about the program, then prepare and assemble your 504 loan authorization package, using the SBA’s 504 Authorization File Library to identify the documentation you will need to apply for your 504 loan. This past fall, the SBA announced updated interest rates you can take advantage of to bounce back from COVID-19 financial disruptions. The program now allows for 10, 20, and 25-year interest rates as low as 2.2%. On average, the loans take around 30-45 days from application to funding. Approval time can, however, take anywhere from one to six months. Right now because of the Economic Aid Act, all borrower fees are waived through September 30, 2021, which means even more financial savings for your business. So, what are you waiting for? If you still have questions about how to get started, give our team a call today, we are happy to help out and can’t wait to get you access to the capital you need.

Three Steps to a Smarter Work from Home Plan

Three Steps to a Smarter Work from Home Plan

A year after the COVID-19 pandemic first shut down businesses statewide, many municipalities are still struggling to keep up with public demand. We are finding that those struggling the most have one common denominator: they are still completely paper-based, which creates a lot of delays, backlogged work, and overwhelmed employees. Based on our experience, municipalities that created a paperless environment pre-pandemic had a significant preparedness head start as we collectively acclimated to the remote workflow. Aside from work sustainability and convenience, it’s clear our governments’ public service sector needs new ways to attract and retain employees. Needless to say, resisting the changing (or changed) times is only going to hinder operating abilities moving forward. Below are three critical rules you can follow to succeed today, tomorrow, and in a post-pandemic world, because as you may have already guessed, there’s no going back to the “old way” of operating.

Daily Check-ins

At RBT, we create daily check-ins at the beginning of the workday to identify mission-critical functions to best conduct our professional services. Not only does this increase team member accountability, but it provides a reliable way to stay connected, while we are physically apart. Implementing small consistent actions can reinforce a sense of transparency, trust, and heightened team organization. Particularly in a remote work setting, researchers say high-quality connections (HQCs) are crucial for high-performing teams. HQCs happen when we have regular, short, positive interactions at work which provide a sense of positive energy in the moment, regardless of whether those interactions happen over Slack, email, or Zoom. Researchers believe HQCs lead to higher performance because high-quality relationships and the resulting psychological safety allow for greater learning in organizations and may contribute to innovation. We know, ZOOM burnout is real. While virtual interactions can never replace in-person meetings, the reality is some employees may never opt to return to traditional in-office settings, even post-pandemic. For some, the increased work-life balance, elimination of commute time, and comforts of home will trump returning to the office where workplace distractions cut into valuable productivity time. Respecting rather than resisting an employee’s desire to remain remote (as long as they continue contributing and remain productive) will set municipalities apart in the recruiting arena.

(Truly) Embrace Digital

The well-known “Silver Tsunami” is upon us as baby boomers retire, shrinking the public sector workforce significantly over the next few years. While the goal is to have tech-savvy millennials fill the void, the public sector struggles to recruit and retain them. Neglecting technological upgrades and modernizing employee training to transition to digital practices will only hinder your ability to recruit younger employees. Embracing digital workflows doesn’t just mean getting on board with cloud-based software or upgrading your internal IT and then forgetting about your tech for a few years. It’s important to revisit policies, both old and new to determine if there are holes in the way you are operating, and constantly improve processes. Have you transitioned to electronic signatures for purchase authorization? Fantastic, as this decision has no doubt smoothed the purchasing process. But, is your payment authorization still on paper and then being scanned into your system? Reevaluate all of the processes you have in place to avoid a workflow that’s vulnerable to threats and prone to delays.


As local government employees age out of the workforce, are you staying competitive? Not only will cross-training provide team members with valuable skills and a sense of variety in their schedule, but it will be instrumental in keeping up with the pace of daily demands. It’s more important than ever before to be as accommodating as possible to employees who are balancing work, family, and the stressors associated with a yearlong pandemic. As many are feeling emotionally and physically fatigued, and likely some are falling ill with the virus, some team members will inevitably be quarantining due to community spread, or recovery. Payroll still needs to be properly documented, and taxes still need to be collected, even when teams are short-staffed. By training your team members to perform various duties, you are creating a more resilient and more efficient workflow that can and should be utilized for years to come.

We understand these are challenging and unprecedented times. Local government agencies are trying to serve the public with limited resources and in some instances, limited capabilities with remote restrictions. Our dedicated team is here to answer questions you might have, and help you navigate your financial needs.

The Challenge Ahead for NY’s 2021 Healthcare Planning

The Challenge Ahead for NY's 2021 Healthcare Planning

Before the pandemic, New York’s hospitals already had the thinnest statewide average operating margin in the nation. They face $20 billion to $25 billion in revenue losses and extraordinary costs due to COVID-19 – and that does not include the financial damages accruing during this latest surge of COVID-19 cases we are currently experiencing. Nearly a year into fighting this deadly virus, the financial situation has only become more dire. Facing a continued public health crisis, a complex vaccination rollout process for millions of New Yorkers, plus a historic deficit, healthcare industry leaders have a lot on their plates. According to the most recent information from state officials, New York projects a $13.3 billion shortfall, or 14%, in revenue and estimates a $61 billion decline through 2024 as a direct consequence of the COVID-19 pandemic. So, what are the top financial focuses of the health industry? PwC’s new study and issues report examines healthcare’s future uncertainty by outlining six major 2021 challenges:

  1. rightsizing after the telehealth explosion
  2. adjusting to changing clinical trials
  3. encouraging digital relationships that ease physician burdens
  4. forecasting for an uncertain 2021
  5. reshaping health portfolios for growth
  6. building a resilient and responsive supply chain for long-term health

The fiscal year (FY) 2021 New York Executive Budget recommends $88.5 billion for DOH, including $76.7 billion for Medicaid, $5.3 billion for the Essential Plan, and $6.5 billion for remaining health program spending. This reflects a decrease of $71.7 billion from the FY 2020 Enacted Budget due to the discontinuation of two-year appropriations for Medicaid. Below, we will touch on some 2021 state healthcare budget highlights to anticipate. What is the future of Medicaid, prescription drug pricing, medical transparency, and new mental health funding in our region?

Redesigning Medicaid and Health Care

The FY 2021 Enacted Budget calls for Medicaid spending to increase by 3%, or about $500 million. The Medicaid Redesign Team II, a cross-section of health care providers, labor, local government, and other industry stakeholders offer up their recommendations in the FY 2021 Enacted Budget which include a transformation of the hospital reimbursement structure to support services to the uninsured, increases investments in primary care, and new requirements that enhance oversight of managed care and transportation. The reforms also address managed long-term care, by far the fastest-growing sector of Medicaid. These include aligning New York State’s eligibility requirements with those of other states for new applicants for Consumer Directed Personal Assistance Program and Personal Care Services and enhancing reporting requirements for both programs; capping statewide enrollment in managed long-term care to incentivize plans to assist in ensuring appropriate enrollment, and creating a statewide independent assessor to achieve efficiencies by removing duplicative efforts to determining eligibility and enrollment in the managed long-term care program.

Prescription Drugs

The FY 2021 Enacted Budget includes a three-part plan to lower prescription drug costs for all New Yorkers. The Budget caps insulin co-payments at $100 per month for insured patients to help address the rising cost of insulin that has resulted in diabetes patients rationing, skipping doses, and not filling prescriptions. A commission of experts will also be recruited to study the feasibility and benefits of a Canadian drug importation program and submit a plan to the U.S. Department of Health and Human Services for review.

Medical Transparency

To increase healthcare service accessibility, New York plans to create a consumer-friendly, one-stop website, called NYHealthcareCompare where New Yorkers can easily compare the cost and quality of healthcare procedures at hospitals around the state. The website will be created by the Department of Health, the Department of Financial Services, and the New York State Digital and Media Services Center.

Student Mental Health Program

Some describe the ongoing COVID-19 pandemic as a psychological pandemic, as health service providers statewide have become overwhelmed with an increase in mental health requests. To meet the rising demand in light of school closures, the budget provides $10 million in funding for grants to school districts to address student mental health needs. These grants are intended to improve student access to mental health resources and assist students who have experienced trauma that negatively affects their educational experience. This program will be administered by the Office of Mental Health and developed in consultation with the State Education Department.

As we have seen, organizations need resilient infrastructures and supply chains to absorb future shocks. They need detection systems to spot financial trouble ahead and identify the right partners or deals. We understand that on every level, this industry is facing unprecedented pressures and stressors. We highly encourage management to frequently check in with employees. As a reminder, health care workers can text NYFRONTLINE to 741-741 to access 24/7 emotional support services. Any New Yorker can call the COVID-19 Emotional Support Hotline at 1-844-863-9314 for mental health counseling, and as always our dedicated RBT team is here to help you create a financial plan to navigate these complicated times.

Sources: PWC, NYS

Crash Course in Cash Management

Crash Course in Cash Management

A new year means a fresh look at what’s working and what’s not – in all aspects of life. Here we are (finally) in 2021, and while the Covid-19 pandemic rages on, there are some bright spots to keep in mind. 140,000 New Yorkers have received the first Covid-19 vaccine dose to date and New York expects to receive another 259,000 doses this week. But while we are taking steps to protect the physical health of our frontline heroes, it doesn’t mean that the healthcare industry as a whole has good financial health – in fact, far from it. The American Hospital Association (AHA) estimates that from March to June, the pandemic cost hospitals around $202.6 billion. If you’ve been scratching your head trying to reimagine cost-savings measures, you’re not alone. For starters, you’ve probably re-examined supply chain operations and discussed opportunities to beef up your organization’s personal protective equipment (PPE) inventory for the coming months. But what emerging best practices can your team adopt to help achieve better working capital amidst this unpredictable environment?


Your healthcare system’s ability to pay off its obligations is a central measure of its financial health. Improve liquidity ratios by paying off liabilities, cutting back on costs, using long-term financing, and managing receivables and payables. There are many ways to approach liquidity, but for starters, we suggest that you examine areas your team can cut costs and consider your accounts payable. You can often negotiate longer payment terms with certain vendors – but if you never ask, you’ll never get the extension. Remember to frame your request in a way that makes the arrangement mutually beneficial. For example, more cash flexibility could be exchanged for several glowing referrals to industry connections. A hospital that can pay its expenses and pay down its debts through the profits it generates from its operations is one that is likely to succeed.

Trim Wisely

When it comes to cutting costs, always align professional fees with clinical demand. If you notice a particular service lacks a financially positive growth trajectory, it’s time to modify or eliminate it. You can also consider removing capital projects that are no longer feasible or lack full funding. On the flip side, prioritize high-demand clinical services you expect to grow, and explore partnerships to create regional solutions that share cost and risk. You can also perform rolling budget updates to consider the ongoing economic impact on payor mix and volume.

Tech Flexibility

Embrace and expand telemedicine options. Despite the overwhelming challenges of the past year, Moody’s ranks U.S. for-profit hospitals as stable, with volumes expected to gradually recover from 2020 levels, while continued government aid and positive commercial and Medicare rate increases will drive growth. According to Moody’s latest report, technology and innovation will allow more procedures to be conducted outside of the hospital, and can also significantly help hospitals increase efficiency, improve patient outcomes, and save costs. By integrating long-term telehealth services, you will be saving money and expanding access to underserved communities, a true win-win.

Balancing Act

There are four common balance sheet (statement of financial position) mistakes we’d like to help your organization avoid:

  • Omitting transactions
  • Recording transactions incorrectly
  • Not classifying data correctly
  • Forgetting to record inventory changes

The best way to avoid these errors is to check your balance sheet frequently (not just when you need to), and keep your financial documents organized. Compare the current reporting period with previous ones. Calculating financial ratios and trends can help you identify lurking financial pitfalls. Ask your team a few questions to gain a more transparent understanding of your financial makeup. Do you have more assets? Have you accrued more debt or invested in new equipment and facilities? Are your financial obligations (current liabilities) under control? Is the amount that payers owe you growing?

Without additional funding and significant transformation, the healthcare industry is likely to experience rapidly eroding liquidity in the coming months. On our road back to normal, organizations need to make drastic structural and operational changes. Now is the time to revisit cost-saving ideas your team may have previously considered but not set in motion. Acting now will improve short-term liquidity and pave the way for a more sustainable operation in the years to come.

Additional Sources:

Healthcare Financial Management Association


The Invisible Healthcare Threat You Didn’t Know About

Ransomware Attack

As an industry, we have been consumed and devastated by the ongoing impact of the COVID-19 pandemic.

For months, oversaturated healthcare systems were pushed to their breaking points, in dire need of personal protective equipment (PPE). Still, some smaller buyers report struggling to maintain ample supply as we face a surge in cases. But as we battle one threat, another is silently lurking. If ransomware attacks aren’t on your radar, you need to consider the massive toll these cyber threats can take on your system’s financial health and reputation.

Did you know that just a few weeks ago, New York-based St. Lawrence Health System’s computer network was shut down after a ransomware attack?

The three-hospital health system with locations in Canton-Potsdam, Massena and Gouverneur discovered a new variant of Ryuk ransomware within hours of the initial attack and acted quickly to disconnect its IT systems. If you’re not already familiar, ransomware is malware that locks up a system’s computers and data until a ransom is paid. The New York Health Department acknowledged the attack and has been in communication with the health system. Late last month, Sky Lakes Medical Center in Klamath Falls, Oregon was also hit. Both providers maintain there’s no evidence patient information was compromised, but troubling data suggests this trend is a growing threat that isn’t going away. In 2020 alone, a total of 59 U.S. health care providers or systems have been impacted by ransomware, disrupting patient care at up to 510 facilities, according to Brett Callow, an analyst at the cybersecurity firm Emsisoft. In a joint alert, the FBI and two federal agencies said they had credible information of “an increased and imminent cybercrime threat” to U.S. health care providers. The alert said malicious groups are targeting the sector with attacks aiming for “data theft and disruption of healthcare services.”

The reality is, our healthcare systems have more data than ever before, but providing protection for that data is often an afterthought.

Internet-enabled medical devices are fantastic tools to increase speed and efficiency but many are poorly secured and come with additional risks. As patient records become more digitized and people depend on telehealth services, healthcare providers need to protect sensitive data. On average, the cost to recover from these attacks – without paying the ransom – totals more than $732,520 in the US, which includes business downtime, lost data, operational costs, device costs, and other expenses. But when the organizations paid, the recovery costs nearly doubled to $1.4 million. So you can’t afford to just hope it doesn’t happen to you. What steps can your team take now to proactively protect your system? Kevin Coleman, executive director of the National Cyber Security Alliance recently suggested implementing the following best practices:

  • effective security policies
  • training road maps for IT teams
  • integration of proactive cybersecurity education

“It’s essential for facilities to regularly create backups of critical systems and files, and to house those offline from the network. Healthcare and public health facilities should also be vigilant about upgrading and updating their legacy hardware and software; ensuring that all connected devices and applications have multi-factor authentication enabled; and that employees know how to identify and avoid malicious email links and attachments,” said Coleman. We understand for an industry already under immense pressure, adding this concern to your plate may trigger more stress. As always, if you have specific questions about strengthening your organization, please reach out to a dedicated RBT team member to schedule a consultation.