We want to share the update regarding the pause to Federal grants. We understand this is shocking and we are monitoring any releases of information to provide support. This update is to provide what we know as of now and specific recommendations to manage your financial situation.
Last night, the Office of Management and Budget (OMB) issued a memo to all federal agencies, stating, “Federal agencies must temporarily pause all activities related to obligation or disbursement of all Federal financial assistance, and other relevant agency activities that may be implicated by the executive orders.”
Here are links to the executive orders the memo refers to:
Here is what we know right now:
The temporary pause takes effect at 5:00 PM EST TODAY, January 28.
Section 330 awardees (CHCs, PCAs, HCCNs) will not be able to drawdown any funding until the pause is lifted even if you have received an NOA
There will be no issue of new awards
No later than February 10, 2025, agencies will be required to submit a report to OMB with detailed information on programs subject to the pause
It was announced PMS is ONLY operating from 9:00am – 4:00pm EST, however, we are aware that the site is currently down
EHB is currently down as of 8:30am PT
Any awards in conflict with Administration priorities will be canceled
CLC Recommendations – Short Term Strategy:
Project your cash needs for at least the next 60 days
It is uncertain what will happen after February 10 when the reports are due to OMB, so we want all centers closely monitoring their cash
Continue working to meet your compliance requirements, such as FFRs, UDS, etc.
With systems currently down, we are unsure of the impact on these deadlines but highly encourage work continues on the preparations
Explore emergency funding sources that are available:
Line of credits
Short-term bank loans
Donations
Hospitals affiliations, more applicable in Urban areas
Look at financial opportunities, such as slowing vendor payments and accelerating receivables
Pause any current recruiting efforts
Be prepared to make cuts
Develop a plan to communicate to staff
Review Feldesman’s release this morning: Broad Federal Funding Pause: What to Know and Do
Plan to attend Feldesman’s webinar next week: What Grantees Need to Know About the New Administration's Executive Orders | Feldesman Training Solutions
CLC Recommendations – Longer Term Strategy:
Project out longer-term scenarios to know the financial implications of and develop a contingency plan:
Payer mix changes
Changes in reimbursement rates for Federal programs
Review staffing and determine necessity, reduced FTE, furlough, etc.
Review non-salary expenses and determine the opportunity for reductions
Explore alternative funding sources that are available:
Local and private grants
State grants
Fundraising campaign
If not in place, develop a dashboard report that monitors key metrics:
Production
Revenue per encounter by payer
Cash projections
Do not forget your routines. This is not the time to get behind on month end, cost report prep, audit processes, etc.
Conduct financial reviews to optimize your other revenue sources, such as 340B, and efficiencies in your billing systems.
Share the impact of funding delays on patient care to build public and political support by talking to:
Local rotary
Chamber of Commerce
Local candidates
We know this brings concern and uncertainty, and CLC is here to support you. We are closely monitoring the updates and connecting with our industry contacts for any updates. CLC’s history and strength is in helping clinics through crisis.
Please reach out to us if you need support.
Phone: 509-226-1393
E-mail: info@communitylinkconsulting.com
Sincerely,
Karen Creveling-Hughes, CEO