Home health agencies need to be on alert for shady advisers helping them get the Employee Retention Credit (ERC). Accountants offered tips to providers Tuesday on ways to protect themselves from unscrupulous third-party advisors during a webinar sponsored by the National Association for Home Care & Hospice.
Employers that continued to pay workers while being shut down during the COVID-19 pandemic or that had significant declines in gross receipts between March 2020 and December 2021 are eligible for the credit. Providers seeking the ERC must first have a good understanding of how the credit works before signing an engagement letter with an adviser, cautioned Troy Taylor, managing director of Forvis Wealth Advisors.
“Some of these third-party advisors are charging outrageous fees even if you don’t receive the credit,” Taylor said during the webinar. “So, even if you don’t even submit the form, you still have to pay them the full amount.”
Taylor also warned providers to fully understand the terms of any agreement and whether the third-party adviser will provide help in the event of an audit.
“My concern is a lot of these third-party advisors might not still be in business if there is an audit and you might be up a creek,” Taylor warned.
Taylor also advised home health agencies to do a simple internet search before signing a contract with an adviser to ensure there aren’t any lawsuits pending against them and have a trusted accountant review the contract before signing on the dotted line.
Many home health agencies saw significant declines in business during the public health emergency. A survey by NAHC of 6,800 agencies found average patient revenue declined from approximately $6.5 million in 2019 to $4.18 in 2020. Roughly half of home health firms experienced a 10% decrease in business during the first year of the PHE, while 35% of firms experienced a 20% drop in business, according to NAHC.
