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CMS Issues Guidance for Medicare Providers and Suppliers to Apply for Accelerated Payments to Address COVID-19 Financial Challenges

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Update #2: CMS issued a press release on Sunday, April 26, announcing the suspension of the Medicare loan program as it applies to Part B suppliers, including physicians and other practitioners (referred to as advance payments), and that CMS will be "reevaluating" new and pending applications for hospitals and other Part A providers (referred to as accelerated payments). CMS indicated that it made these decisions “in light of” the $175 billion that Congress appropriated to HHS for Provider Relief Fund payments. Additionally, CMS updated its Fact Sheet on the program with this new information.

Update #1This publication was updated on April 7, 2020. To read the original version, click here.

Accelerated and Advance Payments are now available to all eligible Medicare Part A and Part B providers and suppliers to provide cash flow during the public health emergency. The funds are equal to either three or six months of Medicare payments, depending on the provider/supplier type, and are provided interest free for at least one year for hospitals and for 210 days for other providers and suppliers. Repayment will begin after 120 days of receiving the accelerated/advance payments. Availability of the funds is not tied to COVID-19 expenses. Application for the funds requires only that the provider indicate that the need for cash is a result of the pressure of the crisis on claims processing.

The Centers for Medicare and Medicaid Services (CMS) issued guidance on March 28, 2020, outlining how Medicare providers and suppliers can access these Accelerated and Advance Payments. The guidance implements a provision in the CARES Act, the third stimulus bill recently enacted by Congress (see Baker Donelson summary of health care provisions in the CARES Act here).

Eligibility

During the COVID-19 public health emergency, accelerated and advance payments are available to all Medicare Part A and Part B providers and suppliers, including physicians. Medicare will allow additional hospital types that are not previously eligible for accelerated payments. The added hospital types include children's hospitals, certain cancer hospitals, and critical access hospitals (CAHs). 

The mechanics of obtaining the accelerated/advance funds should be simple. According to CMS's fact sheet on the Accelerated and Advance Payment, health care entities do not need to meet specific COVID-related criteria in order to qualify for the advanced payments. Indeed, the application forms are in a simple, check the box format, with little more required from providers other than their NPI, address and a responsible party certifying the eligibility of the provider/supplier.  We understand that some MACs are still updating their forms to reflect this simple approach.

To qualify for expedited payments, providers/suppliers must:

  1. Have billed Medicare for claims within 180 days immediately prior to the date of signature on the provider's/supplier's request form,
  2. Not be in bankruptcy,
  3. Not be under active medical review or program integrity investigation, and
  4. Not have any outstanding delinquent Medicare overpayments.

Significant questions remain about eligibility for the accelerated payments for those providers undergoing medical review audits or investigations. Providers who are considered (or suspected) to be in arrears with the Medicare program would not be permitted to access the advanced payments. Outstanding questions include:

  • Would a provider undergoing a Targeted Probe and Educate (TPE) program review be "under active medical review?"
  • Would a supplier under Zone Program Integrity Contractor (ZPIC) audit be considered "under a program integrity investigation?"
  • Would a provider appealing a post-payment denial be considered "under active medical review?"
  • Will survey and certification findings, including civil monetary penalties, be disqualifying?
  • Can a provider currently under a Corporate Integrity Agreement (CIA) qualify?

Accelerated/Advance Payment Amount

The availability of funds will be based on a look- back at Part A and Part B claims history. Notably, payments under Part C, Medicare Advantage Plan billings, are not included. Most providers and suppliers will be able to request up to 100 percent of the Parts A and B Medicare payment amounts for a three-month period. Inpatient acute care hospitals, children's hospitals, and certain cancer hospitals are able to request up to 100 percent of the Medicare payment amount for a six-month period. CAHs can request up to 125 percent of their payment amount for a six-month period.

It is not yet clear when the lookback period will begin and end. For suppliers, we anticipate that the lookback will be to claims paid in the final quarter of 2019 (10/1/19 – 12/31/19). For hospitals, we anticipate the lookback will be to claims paid the second half of 2019 (7/1/19 – 12/31/19). We are waiting for confirmation of the time period that will be used to calculate hospital payments.

The forms will request the provider to specify the amount requested. Providers and suppliers may choose to request less than 100 percent of the payment initially. An entity that requests a 50 percent of the maximum payment can come back later and ask for the other 50 percent.  

Claims Filing and Recoupment Processes

After receiving the funds, providers/suppliers can use the funds without restriction to fund operations. Providers/suppliers will continue to submit claims as usual after the issuance of accelerated/advance payments and will receive full payments for Part A and Part B claims submitted. After 120 days, when the provider or supplier submits a claim to Medicare, amounts due will be offset against the accelerated/advance payments. Instead of receiving reimbursement for newly submitted claims, the reimbursement will be recouped prior to payment and will go towards repaying the payments.

After the applicable repayment period is over, each Medicare Administrative Contractor (MAC) will perform a reconciliation to ensure all balances are repaid, at which time any outstanding balance will be due back and interest will begin to accrue under the applicable rate. It appears that interest will accrue if the repayment timeline is not met through recoupment. The repayment timeline depends on the provider/supplier type:

  • Inpatient acute care hospitals, children's hospitals, certain cancer hospitals, and CAHs have up to one year from the date the accelerated payment was made to repay the balance.
  • All other Part A providers and Part B suppliers will have 210 days from the date of the advance payment was made to repay the balance.

Regulation 42 CFR Section 405.378 provides for the charging and payment of interest on overpayments to Medicare providers. These rates are updated quarterly, and the current interest rate for first quarter 2020 is 10.25 percent.

Challenges with Repaying the Accelerated/Advance Payments

After 120 days, this new policy would leave providers/suppliers without incoming Medicare cash flow, as current remittances for Part A and Part B claims would be recouped. Because Medicare has the ability to recoup, existing lenders would presumably be nervous about debtor organizations taking the payments in these uncertain times. Health care associations are requesting a smaller recoupment percentage (e.g., 25 percent) that would allow the provider to get back on its feet while making good faith payments. Another possibility would be to have graduated recoupments, with the amounts increasing as the provider or supplier becomes more financially stable. We are waiting to see if CMS updates its guidance related to how the accelerated/advance payment program will operate during the COVID-19 public health emergency.

Application Process

Applying for the funds is very straightforward. Providers/suppliers must complete an Accelerated or Advance Payment Request form issued by their MAC that will ask the provider/supplier to request a specific payment amount. The forms should not require financial justification, although we understand that MACs may still be updating their forms to reflect the rules during the public health emergency.  As noted above, a provider or supplier already in debt to the Medicare Program will not be considered eligible for the advance. If the request is approved, providers/suppliers should receive payments within seven calendar days of the request.

Each MAC is operating a COVID-19 hotline to assist with accelerated payment requests. Information to help locate the MAC for a provider/supplier's geographic area can be found here.

Baker Donelson will continue to monitor CMS guidance and will provide updates regarding the Medicare Accelerated and Advanced Payment Program. For any questions, please contact Jeff Davis, Julie Kass, or Bill Mathias. You may also visit the Coronavirus (COVID-19): What you Need to Know resource page on our website.

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