CMS Approves $34 Billion in Medicare Payment Advances

King & Spalding

On April 7, 2020, CMS announced it has approved nearly $34 billion in requests from over 17,000 healthcare providers and medical equipment suppliers through the expansion of the Accelerated and Advance Payment Program (the Program). (By April 9, the estimated figure climbed to $51 billion.) The Coronavirus Aid, Relief, and Economic Security (CARES) Act expanded eligibility for the Program, which provides expedited Medicare payments when there is a disruption in claims processing or submission during national emergencies or natural disasters. Just one day after CMS’s announcement, a bipartisan group of more than 30 senators urged CMS to further support the providers’ and suppliers’ efforts battling the COVID-19 pandemic by eliminating or modifying interest rates for repaying the advanced payments.

Healthcare providers and suppliers do not need to meet specific COVID-19-related criteria to qualify for the advanced payments. They need only meet four eligibility requirements: (1) have billed Medicare for claims within the past 180 days, (2) not be in bankruptcy, (3) not be under active medical review or program integrity investigation, and (4) not have outstanding delinquent Medicare overpayments.

Providers must repay the payment advances funded by the Hospital Insurance (Part A) and Supplementary Medical Insurance (Part B) trust funds. Most hospitals will have up to one year to repay the advance payment. However, if CMS does not recoup the advance payments in the time provided, providers and suppliers are charged 10.25% interest on the remaining balance. In a letter to CMS dated April 8, 2020, 32 senators explained “hospitals, physicians and other health-care providers have significant concerns about the 10.25 percent interest rate and the implications of such interest rates on their ability to participate in the [Program].” The senators requested CMS extend the deadline for CMS to recoup the advance payments without interest or modify or eliminate the interest requirement altogether.

The amount of the payment depends on the type of provider with most providers and suppliers able to request up to 100% of the Medicare payment amount for a three-month period. However, inpatient acute care hospitals, children’s hospitals, and certain cancer hospitals are able to request up to 100% of the Medicare payment amount for a six-month period. Critical access hospitals can request up to 125% of their payment amount for a six-month period.

Importantly, the payments through the Program are separate from the $100 billion provided in the CARES Act, which distributes funds that do not need to be repaid.

The CMS announcement is available here. The CMS Fact Sheet is available here and provides more details on the application process. The senators’ letter to CMS is available here.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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