End of COVID-19 Emergency: Legal Implications for Healthcare Providers (May 1, 2023)
April 28, 2020 For the latest information about the CMS program, please visit our April 28 alert. (April 28, 2020)
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
- 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.
- 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.