Citing recently created coronavirus relief sources for home health agencies and other Medicare providers, the U.S. Centers for Medicare & Medicaid Services (CMS) announced Sunday that it is suspending its advance payment program.
The agency is also “reevaluating” its accelerated payment program.
By pressing pause on the recently expanded loan programs, CMS effectively eliminates two key financial tools some home health agencies have used to manage cash flow during the coronavirus outbreak.
“CMS had expanded these temporary loan programs to ensure providers and suppliers had the resources needed to combat the beginning stages of the 2019 Novel Coronavirus (COVID-19),” the agency noted in a press release. “Funding will continue to be available to hospitals and other health care providers on the front lines of the coronavirus response, primarily from the Provider Relief Fund.”
Normally, CMS’s accelerated and advance payment programs provide funding based on historical payments when there is a disruption in claims submission or processing due to a natural disaster or similar emergency.
On March 28, CMS announced it would also allow Medicare providers to request accelerated and advance payments during the ongoing coronavirus public health emergency.
Providers and suppliers that receive funding through the loan programs are typically required to pay back the money within one year — or less — depending on the nature of their businesses.
Since expanding the accelerated and advance payment program, CMS has approved more than 21,000 applications from Medicare Part A providers, totaling $59.6 billion in payments.
For Part B entities, CMS has approved nearly 24,000 applications, totaling $40.4 billion in payments.
“Beginning today, CMS will not be accepting any new applications for the Advance Payment Program, and CMS will be reevaluating all pending and new applications for Accelerated Payments in light of historical direct payments made available through the Department of Health & Human Services’ (HHS) Provider Relief Fund,” the agency said in the release.
So far, CMS has already distributed $30 billion to Medicare providers through the relief fund created by the $2 trillion CARES Act. The agency is also in the process of distributing another $20 billion in general reimbursement.
Unlike accelerated and advance payments, the emergency funding does not have to be paid back.
Prior to suspending the advance payment program, some home health care industry insiders expressed concern that providers would paint themselves into a corner by borrowing too much money from CMS during such an uncertain time.
Generally, the worry was that agencies would borrow money to stay afloat in the present, then be left without means of paying that money back in months to come. Home health volume and admissions are highly unstable due to the coronavirus, and it’s unclear when operations may begin to stabilize.
“You have to be responsible,” Rob Simione, director of financial consulting at Simione Healthcare Consultants, previously told Home Health Care News. “It’s an advance payment, which means the payments will need to be paid back. CMS will start deducting what you own them out of your claims. You have to track the information and make sure you understand how much you’re going to owe.”