CMS Decision to Cease Advance Payments May Prove Shortsighted

The U.S. Centers for Medicare & Medicaid Services (CMS) recently announced plans to suspend its advance payment program and reevaluate its accelerated payment program.

It’s a decision that some home health industry insiders feel is too premature.

CMS typically offers expedited Medicare payments to help providers during times of natural disasters. The agency initially expanded its accelerated and advance payments program for Medicare providers due to the ongoing COVID-19 public health emergency in March.

In total, CMS has approved more than 21,000 applications from Medicare Part A providers — or $59.6 billion in payments. The agency has also approved nearly 24,000 applications for Part B entities — $40.4 billion in payments.

Now, CMS says it will be reevaluating the amounts that will be paid under its accelerated payment program and suspending the advance payment program entirely. The agency’s reasoning: Home health providers now have other tools for financial support, including the Department of Health and Human Services (HHS) Provider Relief Fund.

It’s possible that many home health providers who need the CMS loans have already applied and received funds.

But that’s not the entire story, according to William A. Dombi, president of the National Association for Home Care & Hospice (NAHC). The COVID-19 heatmap continues to change, meaning financially stable providers in some parts of the country may need an advance payment in weeks to come.

“We have not heard of providers looking for advance payments recently, but the expansion of hotspots is still occurring across the country,” Dombi told Home Health Care News. “That will make it more difficult for [home health agencies] to operate from a cash flow perspective as paperwork takes a back seat to higher priorities at physician offices and other referral sources.”

So far, states such as New York, Washington and California have been COVID-19 hotspots.

In the coming weeks, states such as Alabama, Georgia and Florida could be potential hotspots, due to a large volume of Medicare beneficiaries with one or more COVID-19 high-risk diseases, according to Avalere Health. Several other parts of the country, including rural areas, have also been identified as danger zones.

Apart from direct COVID-19 costs, providers are additionally still facing bottom-line issues due to the previous suspension of elective procedures, according to Rob Simione, director of financial consulting at Simione Healthcare Consultants.

“They have had a tremendous decrease in volume due to elective surgeries cancellation and they have seen staffing issues,” Simione told HHCN. “This has created in some cases 30% to 50% loss in revenue and cash. These areas or future areas that have COVID-19 surges will need additional funding from CMS to be able to cover their expenses.”

In other words, CMS’s move to suspend the program may have been short-sighted, according to Simione.

“CMS is going to need to review where we see flare-ups and surges in COVID-19 patients,” he said. “They may need to provide funding sources to these areas. This may be through the accelerated payment or additional stimulus packages that occur.”

In April, CMS announced that Medicare providers would be getting emergency assistance payments to the tune of $30 billion. Currently, HHS is working to distribute another $20 billion to providers, with more relief coming soon after.

Dombi said it would be preferable for CMS to keep the advance payment program in place, as some providers are just now seeing a surge in their areas.

For now, it’s crucial for providers to stay on top of finances, according to Simione.

“The important thing is agencies need to track their expenses and revenue losses,” he said. “Medicare is going to ask for this information on a quarterly basis and any red flags could result in a potential audit.”

Home health care stakeholders aren’t the only ones concerned about CMS’s decision to suspend advance payments.

Physician groups have likewise expressed concerns about CMS’s decision, pointing to the financial hit that physician practices have recently taken, according to reports from Modern Healthcare.

“These groups are struggling to see patients and keep their staff paid and doors open,” Shawn Martin, senior vice president of the American Academy of Family Physicians, told Modern Healthcare. “How do they manage a process that requires revenue cycle analysis?”