What’s the news: The AMA is joining almost 100 medical societies and other health care-related organizations in urging Congress to, in its next COVID-19 relief bill, provide help for 501(c)(6) nonprofits that are facing devastating losses in revenue because of the cancellation of in-person events that help finance their operations.
“Many medical professional associations generate a significant portion of their revenue by holding conferences and providing essential continuing medical education sessions that help maintain and improve quality patient care,” states the letter to congressional leaders. “Because the COVID-19 public health emergency has caused these conferences to be canceled, many professional associations are facing severe financial losses and are in urgent need of financial assistance to remain in business.”
Previous legislation has limited relief to nonprofits classified as 501(c)(3) charitable organizations. The Internal Revenue Service considers nonprofit medical societies “business leagues” devoted to improving a profession’s business conditions and classifies them as 501(c)(6) organizations, which have not had access to the Paycheck Protection Program or other small-business relief initiatives.
Keeping these small businesses in operation benefits the economy because of the number of people they employ and strengthens the health care infrastructure, which ultimately benefits patient care. The letter warns of the negative impact of allowing these organizations to cease operations.
“This could lead to the reduction in other services that benefit patients and are essential to maintaining a strong physician workforce, such as programs that improve the quality and efficiency of physician practices, improve physician satisfaction and well-being, or provide a pathway for clinical reentry following a life event such as raising a family,” the letter says.
The AMA also joined a sign-on letter to Congress generated by the American Society of Association Executives (ASAE) noting that the business organizations representing many other professions expect losses due to reduced membership and “stunted programming,” and are now struggling to stay afloat.
The ASAE letter highlights the plight of one its members that provides critical assistance for rural health care. The organization is facing an almost $2.5 million financial loss as a result of major event cancellations.
Specifically, the ASAE letter requests that Congress do the following in its next COVID-19 aid package:
- Provide $25 billion in emergency assistance to trade and professional associations.
- Include 501(c)(6) organizations in the Paycheck Protection Program (PPP) or similar Small Business Administration loan expansions.
- Create a pandemic risk insurance program with a federal backstop for prospective insurance claims related to a pandemic or epidemic.
Find out what provisions the AMA supports in the House-passed Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act, and what needs to be included in a Senate bill.
Why it’s important: While the AMA believes it will be able to maintain its strong financial position during this crisis, smaller medical societies—especially those that rely heavily on in-person events such as conferences and classes for revenue—are not in the same position.
Medical societies and other organizations play a vital role in providing essential feedback to health policymakers, informing their members on clinical advances, and in organizing regional and local advocacy efforts on behalf of physicians and their patients.
Along with medical societies, the nation’s 62,000 professional and trade associations support the economy by offering workforce training, creating industry and professional standards, and disseminating essential information “particularly in times of crisis,” says the ASAE sign-on letter.
“These organizations are already relied upon to help coordinate federal resources to combat the coronavirus pandemic, and they require staff to fulfill this duty,” the ASAE letter adds.
Events account for about 35% of annual association revenue. Almost 30% of respondents in an ASAE Research Foundation survey reported current and projected losses between $100,001 and $500,000. Ten percent face losses of more than $1 million and 52% do not have insurance that provides coverage for these losses.
Learn more: Read about the AMA’s “all-hands-on-deck” response to the COVID-19 pandemic.
Stay current on the AMA’s COVID-19 advocacy efforts and track the pandemic with the AMA's COVID-19 resource center, which offers resources from JAMA Network™, the Centers for Disease Control and Prevention, and the World Health Organization.
