If home health and hospice providers discover an unexpected Medicare payment from the Centers for Medicare & Medicaid Services (CMS) later this week, they shouldn’t be too alarmed — it’s not a billing error.
The surprise deposit isn’t a mistake, but rather a no-strings-attached bump to help maintain operational stability amid coronavirus disruption. CMS Administrator Seema Verma highlighted her agency’s plans to float all Medicare providers an immediate financial lifesaver during a White House coronavirus task-force briefing on April 7.
“This week, we will be putting out another $30 billion [in] grants,” Verma told members of the media. “This is going to be based on Medicare revenue. There are no strings attached. So the health care providers that are receiving these dollars can essentially spend that in any way that they see fit.”
The exact details are scarce, but CMS appears to be sending $30 billion to all Medicare-reimbursed health care organizations, with funding coming from the recently established Public Health and Social Services Emergency Fund under the CARES Act.
Additionally, CMS plans to distribute the $30 billion via direct deposit, basing payments on 2019 Medicare revenue, Matt Wolfe, a partner at law firm Parker Poe, told Home Health Care News.
“As part of the CARES Act, Congress had appropriated $100 billion for a fund to deal with the public health emergency,” Wolfe said. “The provisions of the act were pretty broad in terms of how those funds could be appropriated, but the expectation was that they would be used as grants — not as a forgivable loan program or tax credit.”
Overall, net Medicare spending for 2019 is estimated at more than $640 billion, according to Congressional Budget Office data. To some, that context may make the $30 billion in emergency relief look like a single drop of water in a vast ocean, especially when spread across home health providers, hospice agencies, skilled nursing facilities (SNFs), hospitals and other Medicare players.
But — considering it’s essentially free money — it can still be a huge help.
“We’re not talking about making providers necessarily whole, but we’re also not talking about a pittance here,” Wolfe said.
Apart from the recently announced $30 billion, CMS has also expanded its accelerated and advanced payment program to alleviate cash flow challenges associated with coronavirus costs. Home health providers are likewise receiving financial relief tied to the suspension of the 2% Medicare sequestration, another action stemming from the CARES Act.
If it makes sense, some cash-strapped home health agencies can even pursue small business loans through the CARES Act’s Paycheck Protection Program.
“Obviously, every provider is going to need to sort of customize their COVID-19 playbook in order to stay afloat right now, but I think this $30 billion could potentially be a very significant part of that playbook,” Wolfe said.
For Medicare providers that don’t use direct deposit, CMS will offer “a very simple registration” process, Verma noted.
“This is going to be done in a very easy, simplified way,” she said.
For skilled nursing facilities that primarily derive their income from Medicare, the $30 billion infusion is estimated to yield about $1.5 billion in payments, according to an analysis from Mizuho Securities USA. There currently is no estimate for the home health industry.
At the April 7 briefing, the administrator also hinted at a second wave of grant money coming soon for Medicaid-based providers.
“We recognize that … there are providers out there — pediatricians, children’s hospitals, OB-GYNs, even our nursing homes — [where] a lot of their revenue comes from other sources. Medicaid or other payer sources,” Verma said. “And so those organizations will be addressed in the second tranche of funding.”
Combined with the lending CMS has provided through its expanded accelerated payments program, the agency has funneled roughly $64 billion into the health care system in the past week alone.