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Analysis

CMS Approves $34B in Medicare Payment Advances

By John Commins  
   April 07, 2020

The payment advances, essentially loans that will have to be paid back, were distributed under CMS's Accelerated and Advance Payment Program.

The Centers for Medicare & Medicaid Services said it used a streamlined approval process this week to distribute $34 billion in Medicare advanced payments to 17,000 providers and suppliers battling COVID-19

The payment advances – essentially loans that will have to be paid back – were distributed under CMS's Accelerated and Advance Payment Program, which is funded by the Hospital Insurance (Part A) and Supplementary Medical Insurance (Part B) trust funds, which are the same fund used to pay Medicare claims.

The $34 billion outlay is separate from the $100 billion provided in the Coronavirus Aid, Relief, and Economic Security Act, which distributes funds that do not need to be repaid.

CMS Administrator Seema Verma said the new streamlined process reduced the processing time from three or four weeks to four to six days.   

"Healthcare providers are making massive financial sacrifices to care for the influx of coronavirus patients," Verma said in a media release.

"Many are rightly complying with federal recommendations to delay non-essential elective surgeries to preserve capacity and personal protective equipment," she said. "They shouldn't be penalized for doing the right thing."

CMS this month has received more than 25,000 requests from providers and suppliers for expedited payments and has approved more 17,000 requests in the past week.

Before the pandemic, CMS had approved about 100 requests for advanced payments in the past five years, mostly for natural disasters such as hurricanes and tornadoes.

"Amid a public health storm of unprecedented fury, these payments are helping providers and suppliers – so critical to defeating this terrible virus – stay afloat," Verma said.  

The expedited payments are available to Part A providers, including hospitals, and Part B suppliers, including doctors, non-physician practitioners and durable medical equipment suppliers.

Most of the stakeholders can get an advance on three months of their Medicare reimbursements, and some providers can get up to six months.

CMS will apply claims payments to offset the accelerated/advance payments four months after the pay-out.

Most hospitals will have up to one year from the date the accelerated payment was made to repay the balance. Other Part A providers and Part B suppliers will have up to 210 days to complete repayments.

“Amid a public health storm of unprecedented fury, these payments are helping providers and suppliers – so critical to defeating this terrible virus – stay afloat.”

John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.


KEY TAKEAWAYS

CMS has received 25,000 requests for expedited payments and has approved more 17,000 requests in the past week.

Before the pandemic, CMS had approved about 100 requests for advanced payments in the past five years, mostly for natural disasters.

The $34 billion outlay is separate from the $100 billion provided in the CARES Act, which does not need to be repaid by providers.


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