Updated: April 28, 2020
For the latest information about the CMS program, please visit our April 28 alert.
On March 28, 2020, the Centers for Medicare & Medicaid Services (CMS)
released
guidance
expanding its Accelerated and Advanced Payment Program, which now allows
most Medicare Part A and Part B providers and suppliers to request an
advance of up to 100 percent (or more) of the Medicare payment amount for a
three- or six-month period, depending on the provider category. The
Accelerated and Advanced Payment Program could offer healthcare providers
and suppliers critical liquidity to help with cash-flow issues providers
are experiencing because of postponement in non-essential surgeries and
procedures, staffing challenges and disruption in billing related to the
2019 novel coronavirus (COVID-19) pandemic.
The expansion of the program was in part authorized by the Coronavirus Aid,
Relief, and Economic Security Act (CARES Act) as discussed in a Mar. 27, 2020 client alert, and is only for the duration of the COVID-19 public health emergency. CMS
stated a desire to expand the program to help Medicare providers and
suppliers accelerate cash flow during the pandemic. As a result, providers
will be better able to support workforces, purchase supplies and equipment,
and ensure providers have the resources they need to allow focus on patient
care during this pandemic.
CMS’ published
fact sheet
includes further details. Though this program appears to be still evolving
in its implementation through Medicare Administrative Contractors (MACs)
and is subject to further guidance from CMS, below are six key points
healthcare providers and suppliers should know about the Accelerated and
Advanced Payment Program, based on guidance released to date.
- Eligibility. To qualify for advanced or accelerated
payments, the Medicare-enrolled provider or supplier must: (i) have billed
Medicare for claims within 180 days immediately prior to the date of
signature on the provider’s or supplier’s request form; (ii) not be in
bankruptcy; (iii) not be under active medical review or program integrity
investigation; and (iv) not have any outstanding delinquent Medicare
overpayments. Currently, it appears, given CMS’ guidance, that all Medicare
providers and suppliers that meet the eligibility criteria may participate
in this program.
- Payment Amount. While most providers and suppliers will
be able to request up to 100 percent of the Medicare payment amount for a
three-month period, certain provider categories may be given additional
support. Specifically, the time period for inpatient acute care hospitals,
children’s hospitals and certain cancer hospitals has been extended to six
months, and critical access hospitals (CAH) are able to request up to 125
percent of their payment amount for a six-month period. Note that the
accelerated Medicare payment program does not apply to Medicare Advantage
plans.
- Calculation Methodology Is Pending. It is currently
unclear how the three-month or six-month amount will be calculated, and it
may depend on each MAC’s updated request form. CMS’ guidance does not
specify whether the amounts requested are limited to unpaid accounts
receivable or if the payment will be for what providers and suppliers
expect to bill over the next, or a typical, three- or six-month (as
applicable) period. That said, some MACs are instructing providers to use the past three or six months of Medicare reimbursement to determine
the proper payment amount.
Historically, the Accelerated and Advanced Payments Program applied only in
an “exceptional situation” when there was a delay in preparing and
submitting claims, and CMS would pay ahead for what it expected to pay
facilities such as inpatient hospitals and skilled nursing facilities for
care already provided but not yet billed (e.g., a patient discharge that
had not yet occurred) or billed but not yet paid (e.g., Medicare review
process still ongoing). The program has not previously been as widely
available to the entire nation or to other provider and supplier types,
including individual physician practices. Due to the nature of the COVID-19
pandemic, CMS’ guidance has expanded this program to seemingly apply to all
services and all provider and supplier types. Providers may want to
consider submitting their historic Medicare collections over a three- or
six-month period as a starting point to ensure they receive appropriate
support. On the other hand, providers will need to balance the requested
amount against the required repayment and recoupment, considering
projections on future services, to ensure they will be able to make the
Medicare program whole.
- Repayment, Recoupment and Final Reconciliation. The MAC
will begin to recoup the advance by offsetting claims from providers and
suppliers 120 days after receipt of the advance. During this time, until
the final reconciliation described above or the advance is recouped in
full, any claims submitted will be offset against any advanced or
accelerated payment that was made. At the final reconciliation, providers
and suppliers will be required to repay any balances still owed because of
the advanced or accelerated payment. McGuireWoods is still confirming if
the MAC will offset the claims in full after this 120-day period, or if
they will instead take a smaller percentage so the provider or supplier is
not cash-poor after the 120-day period. The final recoupment and
reconciliation will take place depending on the type of provider or
supplier, as follows:
- For the majority of hospitals — including inpatient acute care hospitals,
children’s hospitals, certain cancer hospitals and CAHs — the
reconciliation will happen at the one-year anniversary of the payment.
- For the small subset of Part A providers who receive a Period Interim
Payment, the reconciliation will happen at the final cost report process
(180 days after the final cost report).
- All other Part A and Part B providers and suppliers will have
reconciliation 210 days after the advanced payment date.
- Application Process. The accelerated and advanced
payment request forms can be found on each
MAC’s
website. For reference, links have been provided to prior Accelerated and
Advanced Payment Program forms for
CGS,
NGS,
Noridian,
Novitas
and
Palmetto. A number of these forms are expected to be updated in the coming week,
due to the expansion of the program. Each provider and supplier must
complete the entire form, including providing the following data:
- Provider/supplier identification information
- Legal business name or legal name
- Correspondence address
- National Provider Identifier (NPI)
- Payment amount requested
Though not included in CMS’ initial release, based on McGuireWoods lawyers’
conversations with MACs, providers and suppliers may also need to provide
certain financial information with their request for advanced payments. CMS
notes that any incomplete forms will not be processed. Providers are
required to provide the following additional information on the request
form:
- Check the box requesting the advance stating, “Delay in provider/supplier
billing process of an isolated temporary nature beyond the
provider’s/supplier’s normal billing cycle and not attributable to other
third party payers or private patients.”
- State that the request is for an accelerated and advanced payment due to
the COVID-19 pandemic.
- Include a signature of an authorized representative.
The guidance reflects that each MAC will work to review and issue payments
within seven days of its receipt of a payment request. Each MAC also has
created a COVID-19 hotline, available at least Monday through Friday (some
with weekend hours) for any questions in this process.
- Appeal Rights. Providers and suppliers do not have any
administrative appeal rights under this program. CMS notes, however, that
administrative appeal rights will apply to the extent CMS issued any
overpayment determinations to recover any unpaid balances on the
accelerated or advanced payments.
****
The Accelerated and Advanced Payment Program may assist providers and
suppliers in responding to the COVID-19 pandemic by allowing them to focus
on patient treatment and reducing certain financial burdens during this
time. CMS’ expansion of the program may give providers and suppliers
additional liquidity they need while combating the effects of the COVID-19
public health emergency. Though certain details are still unclear and the
program is subject to further guidance, the application process is now
open, and providers and suppliers may begin submitting advanced or
accelerated payment requests to their MACs. Ultimately, providers and
suppliers will want to weigh the need for liquidity in the amounts they
request against the ability to pay back after the pandemic. Providers and
suppliers will also need to consider how any payments received may impact
existing or anticipated debt financing, particularly any asset-based
receivables financing.
Please contact the authors for additional information on the Accelerated
and Advanced Payment Program and its availability to providers and
suppliers. McGuireWoods has published additional thought leadership on how companies across various industries
can address crucial coronavirus-related business and legal issues. The
firm’s
COVID-19 response team stands ready to help clients navigate urgent and evolving legal and
business issues arising from the COVID-19 pandemic.