The U.S. Centers for Medicare & Medicaid Services (CMS) announced amended terms Thursday for accelerated and advanced payments granted to Medicare-certified health care providers — including home health agencies — during the public health emergency.
Under the new “Continuing Appropriations Act” of 2021 and “Other Extensions Act,” repayment for providers will now begin one year after the advanced or accelerated payments were received.
The accelerated and advanced payment program was expanded in late March, meaning that providers would have been required to make payments starting in August, but when August came around, providers were not forced to begin paying back the money distributed to them.
Now, repayment will officially be delayed until one year after the payments were issued.
“In the throes of an unprecedented pandemic, providers and suppliers on the frontlines needed a lifeline to help keep them afloat,” CMS Administrator Seema Verma said in a press release. “CMS’s advanced payments were loans given to providers and suppliers to avoid having to close their doors and potentially causing a disruption in service for seniors. While we are seeing patients return to hospitals and doctors providing care we are not yet back to normal.”
In total, CMS has issued over $106 billion in payments to providers dealing with financial hardship and cash flow issues tied to COVID-19. CMS’s advanced and accelerated payment programs are generally granted to providers that, for example, are in an areas experiencing a natural disaster.
The distribution this time around, however, was one of the broadest — if not the broadest — distributions of upfront cash in the history of the program.
After the first year, there will be a tiered approach to a reimbursement cut-off, depending on how long providers take to pay back the money. That cut-off will range from just 25% of a provider’s reimbursement being cut off to 50%.
For instance, Medicare will automatically recoup 25% of Medicare payments that would usually be distributed to the provider for eleven months. Once that eleven-month period passes, recoupment will increase to 50% for the following six months.
If the home health provider is still unable to repay the total amount of the accelerated or advanced payments they received during that 29-month time period, CMS will issue letters requiring repayment of any outstanding balance, which will be subject to a 4% interest rate.
This means that providers will not only be gaining significantly more time to pay CMS back, but they will also be subject to a far lower interest rate if they are unable to repay in the designated time period. Usually, the interest rate would be closer to 10%.
“This makes real accommodations for providers,” Judy Waltz, a partner at Milwaukee, Wisconsin-based law firm Foley & Lardner LLP, told Home Health Care News in September when the now-official CMS changes became a possibility. “Overall, the burden on providers is much, much more bearable.”