Medicare providers and suppliers can apply immediately for accelerated and advance payments to address cash flow issues from the COVID-19 pandemic, CMS announced this week.
The $2.2 trillion Coronavirus Aid, Relief and Economic Security (CARES) Act signed into law last week authorized HHS Secretary Alex Azar to expand the accelerated and advance payment program for Medicare providers. That act included $100 billion for healthcare providers, among many other changes made to provide a response to the virus.
Hospitals, doctors, durable medical equipment suppliers and other Medicare Part A and Part B providers and suppliers are all eligible as long as they have billed Medicare for claims within the past 180 days and are not in bankruptcy, under active medical review or with outstanding delinquent Medicare overpayments.
CMS anticipates a seven-day turnaround on payments. Most providers can request up to 100% of Medicare payment for a three-month period, while inpatient acute care hospitals, children’s hospitals and certain cancer hospitals can ask for up to 100% of the payment amount for a six-month period. Critical access hospitals can request up to 125% of their payment amount for a six-month period.
As for repayment, CMS is giving one year from the date the payment was made for inpatient acute care hospitals, children’s hospitals, certain cancer hospitals and Critical Access Hospitals to repay the balance. All other Part A providers and Part B suppliers will have 210 days to repay.
Many US hospitals and health systems are facing critical liquidity issues as expenses explode and revenues shrink. For many, volume has fallen dramatically while staffing has remained unchanged.
At the same time, providers are spending to prepare for the pandemic, hiring additional staff in some cases, setting up temporary facilities, procuring personal protective equipment, sometimes at exorbitant prices, and more. Some hospitals already have furloughed workers; some are laying off employees, and others are warning that they may have to shut their doors (see here, here, here and here).
The CARES Act contained some solutions for providers facing an immediate cash crunch, including Medicare accelerated payments and a chance to defer payment of the employer share of the payroll tax. That provision requires the employer to pay the deferred tax over the following two years, with half of the amount required to be paid by Dec. 31, 2021, and the rest by Dec. 31, 2022.
HRI will publish a more complete guide to surviving the liquidity crisis in coming weeks. Watch this newsletter for news of the publication.