CMS suspends advance payments to providers, is reevaluating accelerated payments for hospitals

A photo of the exterior of a hospital on a sunny day
Health systems like HCA Healthcare have received millions through the Centers for Medicare & Medicaid Services' accelerated payments program to help stabilize operations during the COVID-19 pandemic. (Steve Design/Shutterstock)

The Trump administration is suspending a program that offered advanced payments to providers and reevaluating another program that offered accelerated payments to health systems after doling out about $100 billion. 

The Centers for Medicare & Medicaid Services (CMS) announced over the weekend it is immediately suspending its Advance Payment Program to Medicare Part B suppliers such as doctors, non-physician practitioners and durable medical equipment suppliers.

The agency is reevaluating the amounts that will be paid under its Accelerated Payment Program, which have been made available to fee-for-service Medicare providers such as hospitals in light of the $100 billion already sent to providers through the program. 

CMS had expanded the loan programs to ensure providers and suppliers had resources needed to combat COVID-19 as many began furloughing or laying off workers due to sharp revenue drops from elective care amid the COVID-19 response.

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CMS approved more than 24,000 applications under the program and advanced more than $40 billion to Part B suppliers in the last several weeks. It approved 21,000 applications for accelerated payments, totaling nearly $60 billion in payments to hospitals.

Prior to COVID-19, the agency had only approved just over 100 of such requests.

The advanced and accelerated payments are not grants, but instead payments that are required to be paid back within one year, officials said.  

In a release, CMS officials said the actions are also being taken "in light of the $175 billion recently appropriated for healthcare provider relief payments," the agency said, referring to $100 billion allocated in the CARES Act as well as $75 billion allocated to providers through the Paycheck Protection Program and Health Care Enhancement Act. 

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The Department of Health and Human Services is distributing that money through the Provider Relief Fund. Those funds will be used to support healthcare-related expenses or lost revenue attributable to the COVID-19 pandemic and to ensure uninsured Americans can get treatment for COVID-19, officials said.

Among the recipients of the funding, HCA Healthcare said it benefited from about $4 billion in accelerated Medicare payments provided under the CARES Act, saying that money will be repaid over an eight-month period beginning in August. HCA also received about $700 million of funds from the first phase of the public health and social services emergency fund.

Those two pieces of economic assistance have had the greatest impact in stabilizing the health system's financials amid challenges presented by COVID-19, HCA officials said during a recent conference call with analysts.

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