CMS Suspends Advance Payments and Re-evaluates Accelerated Payments

On April 26, 2020, the Centers for Medicare & Medicaid Services (CMS) announced it was immediately suspending its advance payment program to Part B suppliers, and re-evaluating the amounts that will be paid to providers under the accelerated payment program, including hospitals. CMS’ announcement comes in light of the provider relief fund created by the $100 billion appropriated to the Public Health and Social Services Emergency Fund in the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), and the additional $75 billion in funding in the Paycheck Protection Program and Health Care Enhancement Act.

CMS expanded the advance payment and accelerated payment programs to help offer providers and suppliers resources to combat cash-flow issues related to the 2019 novel coronavirus (COVID-19) pandemic, as discussed in a previous McGuireWoods legal alert. Since the expansion of this program on March 28, 2020, CMS approved approximately $59.6 billion in payments to Part A providers and $40.4 billion to Part B providers and suppliers, on more than 45,000 total applications between the two programs. Unlike the funds distributed under the provider relief fund, payments made to providers under the advance payment and accelerated payment programs are not grants, so providers and suppliers must pay the amounts back.

For Part B Medicare suppliers, such as physician groups and surgery centers, CMS will not accept any new applications for the advance payment program. CMS notes that any additional funding will continue through other programs, including the provider relief fund. More information about applying for additional financial support from the relief fund is available in this recent McGuireWoods legal alert.

For Part A Medicare providers, CMS will re-evaluate all pending and new applications for accelerated payments in light of the direct payments made available through the relief fund and other sources. CMS noted that the accelerated payment program grew out of an emergency funding program for when there is a disruption in claims submission or claims processing. The CARES Act provided support for hospitals during the COVID-19 pandemic — including increasing the requested amount to at least six months of typical Medicare claims. With other funding sources, CMS appears to be returning the program closer to the pre-COVID-19 program, with the CARES Act statutory revisions. To this end, CMS provided a revised fact sheet on the details of the program after this announcement. Though the fact sheet remains largely the same as when it was first released, and therefore the prior guidance largely applies for eligible Part A Medicare providers, the updated fact sheet notes the following changes:

  • As noted above, the advanced payment program to Part B suppliers is suspended immediately.
  • The processing time for the accelerated payment program removed that Medicare Administrative Contractors (MAC) would review and issue payments “within seven (7) calendar days of the request.” CMS did not give a new timeline for the review, likely providing additional time for closer evaluation.
  • CMS stated clearly that any further accelerated payment would be evaluated in light of the provider relief funds to ensure Part A Medicare providers have financial need for further acceleration payments.

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CMS did not otherwise change the terms of the programs for providers who already received an advance or acceleration payment, so providers should expect to repay the Medicare program utilizing the same periods indicated in McGuireWoods’ prior guidance.

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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