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CMS makes $34 billion loan available to providers, suppliers

CMS has received over 25,000 requests and has approved over 17,000 in the last week.

Susan Morse, Managing Editor

The Centers for Medicare and Medicaid Services is delivering close to $34 billion this week to providers to help fight the 2019 Novel Coronavirus.

The funds are a loan, separate from the $100 billion approved for health systems in the Coronavirus Aid, Relief and Economic Security Act. They are being provided through the expansion of the Accelerated and Advance Payment Program. 

The funds are being distributed based on Medicare fee-for-service revenue.  Most providers and suppliers will be able to request up to 100% of the Medicare payment amount for a three-month period. Inpatient acute care hospitals, children's hospitals, and certain cancer hospitals are able to request up to 100% of the Medicare payment amount for a six-month period. Critical access hospitals can request up to 125% of their payment amount for a six-month period.

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This is a streamlined process implemented by CMS to reduce processing times for a payment to between four to six days, down from the previous time frame of three to four weeks. 

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

WHY THIS MATTERS

Hospitals and health systems need a fast influx of cash, in some cases just to make payroll, to make up for revenue losses due to COVID-19.

Hospitals have cut staff, salaries and benefits to cut down on expenses.

The American Hospital Association has asked the federal government to get the $100 billion in federal stimulus money to providers as quickly as possible.

The immediate injection of $34 billion is needed.

In a little over a week, CMS has received over 25,000 requests from providers and suppliers for the loans. Over 17,000 have already been approved.

This compares to just over 100 total requests CMS has received in the past five years, with most being tied to natural disasters such as hurricanes.

However, America's Essential Hospitals said the way funds are being allocated could disadvantage hospitals that accept a large number of Medicaid, rather than Medicare, patients, as well as the uninsured, according to Dr. Bruce Siegel, president and CEO of America's Essential Hospitals.

"We are eager for this week's release of $30 billion from the Public Health and Social Services Fund but concerned by the basis for distributing these funds, as it could disadvantage some essential hospitals on the front lines of this crisis," Siegel said. "It is especially concerning because their narrow margins and front-line role mean these hospitals are among those in greatest need of funding support during this public health emergency."

CMS Administrator Seema Verma has said the agency will follow the release of this funding with another focused on Medicaid-dependent providers.

THE LARGER TREND

The CMS Accelerated and Advance Payment Program is funded from the Hospital Insurance (Part A) and Supplementary Medical Insurance (Part B) trust funds, which are the same fund used to pay out Medicare claims each day. The advance and accelerated payments are a loan that providers must pay back.

CMS will begin to apply claims payments to offset the accelerated/advance payments 120 days after disbursement. The majority of hospitals, including inpatient acute-care hospitals, children's hospitals, certain cancer hospitals and critical-access hospitals, will have up to one year from the date the accelerated payment was made to repay the balance. All other Part A providers and Part B suppliers will have up to 210 days to complete repayment of accelerated and advance payments, respectively.

The funding is separate from the $100 billion CARES Act appropriation that does not need to be repaid.

The Department of Health and Human Services will be providing additional information on how healthcare providers and suppliers can access CARES Act funds in the coming weeks, CMS said.

ON THE RECORD

"Healthcare providers are making massive financial sacrifices to care for the influx of coronavirus patients," said CMS Administrator Seema Verma. "Many are rightly complying with federal recommendations to delay non-essential elective surgeries to preserve capacity and personal protective equipment. They shouldn't be penalized for doing the right thing. Amid a public health storm of unprecedented fury, these payments are helping providers and suppliers – so critical to defeating this terrible virus – stay afloat."

Twitter: @SusanJMorse
Email the writer: susan.morse@himssmedia.com