Separate Funding for CMS AAPP and $100 Billion in Loans Under CARES

Chambliss, Bahner & Stophel, P.C.
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Chambliss, Bahner & Stophel, P.C.

Late on April 7, 2020, the Centers for Medicare and Medicaid Services (CMS) issued a press release announcing that it has delivered nearly $34 billion in the past week to health care providers on the frontlines battling the 2019 Novel Coronavirus (COVID-19) through its expanded Accelerated and Advanced Payment Program (AAPP).

Accelerated AAPP Request Process

During this short period of time, CMS has approved 17,000 of the 25,000 requests for accelerated and advanced payments it has received, reducing processing times to four and six days, down significantly from the typical three to four weeks. Prior to COVID-19, CMS had approved just over 100 total requests for accelerated and advanced payments in the past five years.

Funding Sources Distinguished

Importantly, in explaining that the AAPP is funded by the Hospital Insurance (Part A) and Supplementary Medical Insurance (Part B) trust funds—the same funds used to pay out Medicare claims each day—CMS clarified that AAPP funding is separate from the $100 billion that the Department of Health and Human Services (HHS) will have discretion to administer pursuant to the Coronavirus Aid, Relief, and Economic Security (CARES) Act for COVID-19 related health care expenses or lost revenues.    

Why Does This Funding Distinction Matter to You?   

We are receiving numerous questions from health care providers regarding the “double dipping” implications of seeking both AAPP payments and a Paycheck Protection Program (PPP) loan from the Small Business Administration under the CARES Act. While this CMS press release does not explicitly authorize the dual pursuit of AAPP payments and a PPP loan, given the clarification that AAPP funding is distinct from the $100 billion CARES Act appropriation, we believe other CARES Act appropriations, such as that made for the PPP, are also likely to be viewed by CMS to be funded separately from the AAPP and therefore simultaneously pursuable by a health care provider.

The implications of this CMS press release are consistent with our prior client update “Support for Health Care Providers During the COVID-19 Pandemic” on this issue.

In the meantime, health care providers continue to wait for HHS to provide additional information on how they can access the $100 billion in CARES Act funding for COVID-19 related health care expenses and lost revenues, which CMS advises will be forthcoming.

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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