Published March 30, 2020

Ensuring Provider Cash Flow During the COVID-19 Pandemic—Medicare Advance Payments

Section 3719 of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), signed into law March 27, authorizes the Centers for Medicare & Medicaid Services (CMS) to make advance payments to Medicare providers to ensure adequate cash flow during the COVID-19 pandemic. The following day, CMS published program instructions regarding the issuance of these payments.

The process for requesting Medicare Advance Payments under the new law is quick and easy, especially as compared to the pre-existing process for making such requests. Also, the amount of a provider’s advance payment is based simply on its historical Medicare payments. The pre-existing process limited these payments to the difference between the provider’s anticipated payments and expenditures over a specified period of time.

Eligibility.  Any Medicare provider is eligible for an advance payment if the provider:

  1. Has billed Medicare for claims within the last 180 days.
  2. Is not in bankruptcy.
  3. Is not under active medical review or program integrity investigation.
  4. Does not have any outstanding delinquent Medicare overpayments.

Amount of Payment.

  • An inpatient acute care hospital, a children’s hospital, or a cancer hospital may request up to 100% of its Medicare payments for a 6-month period.
  • A critical access hospital may request up to 125% of its Medicare payments for a 6-month period.
  • Any other Part A or Part B provider may request up to 100% of its Medicare payments for a 3-month period.

Application Process.  A provider may apply for an advance payment using the request form found on its Medicare Administrative Contractor’s (MAC) website. Each MAC maintains a COVID-19 hotline to assist with requests. This contact information is included in the above-referenced program instructions.

To complete the form, the provider will need to supply: (1) identification information (e.g., legal business name, address, NPI); (2) the amount of the request; and (3) the reason for the request. Specifically, the provider should check Box 2 on the form and state that the request is for advance payment due to the COVID-19 pandemic. The form must be signed by the provider’s authorized representative and be submitted to the MAC via e-mail.

Approval Process.  According to the program instructions, the MAC will review each application for completeness and verify the applicant is eligible for an advance payment. The MAC will then notify the applicant by e-mail as to whether the request has been approved or denied.

For approved requests, the MAC will issue a payment within 7 calendar days of the request’s submission.

Recoupment and Reconciliation.  For the first 120 days following the provider’s receipt of the advance payment, the Medicare Administrative Contractor (MAC) will continue to make full payment on all claims submitted by the provider. Thereafter, the MAC will recoup the amount of the advance payment by withholding any payment on all claims submitted by the provider.

For a hospital, the MAC will perform a reconciliation one year following the hospital’s receipt of its advance payment. If any remaining amount is owed, the MAC will make a demand for direct payment. For all other providers, the MAC will perform the reconciliation at 210 days.

The program instructions do not address what would happen if the provider were unable to meet a MAC’s demand for direct payment. In the case of overpayment refunds, MACs will consider requests for extended repayment schedules, subject to interest. In deciding whether to request an advance payment, a provider should assume this would be the case for any remaining amount following recoupment.

If you have any questions regarding these matters, or require assistance in preparing an advance payment request, contact one of our PYA executives below at (800) 270-9629.

Disclaimer: To the best of our knowledge, this information was correct at the time of publication. Given the fluid situation, and with rapidly changing new guidance issued daily, be aware that some or all of this information may no longer apply. Please visit our COVID-19 hub frequently for the latest updates, as we are working diligently to put forth the most relevant helpful guidance as it becomes available.

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