CMS is not (yet) recouping accelerated payments made to providers early in the pandemic

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Ingrid Stiver Senior Manager, Health Research Institute, PwC US September 24, 2020

CMS has not yet started recouping accelerated payments it made to providers early in the pandemic, according to multiple sources. CMS Administrator Seema Verma acknowledged this in an interview with Modern Healthcare last week and did not provide any specifics on when the agency would begin to do so.

The Coronavirus Aid, Relief and Economic Security (CARES) Act allows CMS to wait 120 days before recouping the accelerated payments. Under the statute, CMS should have started recouping the accelerated payments from providers by offsetting against the accelerated payment any Medicare fee-for-service claims it received starting 121 days after the accelerated payment. According to a CMS Fact Sheet, this process is automatic and should not require any action on behalf of providers.

In an interview with Modern Healthcare, Verma indicated that CMS is guiding Congress as it considers the repayment terms, outlined in Section 3719 of the CARES Act. Modifying the terms or forgiving the loans would require action by Congress, since the terms are incorporated into the statute.

HRI impact analysis

The CARES Act expanded CMS’ authority to accelerate payments during the COVID-19 pandemic to providers, including inpatient acute care hospitals, children’s hospitals, cancer hospitals and critical access hospitals.

Under the program, providers could request up to 100% of the Medicare payment amount (125% for critical access hospitals) for a three-month period (six-month period for critical access hospitals, inpatient acute hospitals, children’s hospitals and some cancer hospitals). According to the CMS Fact Sheet, CMS would start recouping payments after 120 days from the date of the accelerated payment and would give most providers up to a year to repay in full (210 days for some providers).

In late April, CMS announced that it was suspending the program and not taking any new applications in light of the funding available through the CARES Act Provider Relief Fund, which gives direct relief to providers, not requiring repayment. (See HRI’s previous coverage on the CARES Act Provider Relief Fund here and here.)

As of May 2, CMS had advanced over $100 billion under the expanded accelerated payment program: $92 billion to hospitals, skilled nursing facilities and other Medicare Part A providers, and $8 billion to providers participating in Medicare Part B only, including physicians and durable medical equipment suppliers.

In late July, a coalition of provider organizations including the American Hospital Association and the Association of American Medical Colleges sent a letter to Verma urging CMS to delay the start of repayments until Congress has the opportunity to make changes to the program.

Congress is considering extending and relaxing the repayment terms but has yet to do so. The Medicare Accelerated and Advance Payments Improvement Act, introduced in May by Sen. Jeanne Shaheen, D-NH, would delay repayments for one year, cap the recoupment at 25% of a claim, give all providers up to two years for full repayment, limit the interest rate charged on any balance at 1%, and allow CMS to waive repayment for providers that demonstrate extreme hardship.

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Trine K. Tsouderos

HRI Regulatory Center Leader, PwC US

Tel: +1 (312) 241 3824

Ingrid Stiver

Senior Manager, Health Research Institute, PwC US

Erin McCallister

Senior Manager, Health Research Institute, PwC US

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