The Centers for Medicare & Medicaid Services’ (CMS) accelerated payment program provides necessary funds when there are disruptions in claims submission and/or processing. The Coronavirus Aid, Relief, and Economic Security (CARES) Act expanded the program to include not only acute care hospitals, but also critical access hospitals (CAHs), children’s hospitals and cancer hospitals during a public health emergency. CMS further expanded eligibility for accelerated/advance payments during the COVID-19 public health emergency to all Medicare providers and suppliers.
Accelerated Payment Terms
Accelerated payments function as a loan and must be repaid to CMS in full. The Continuing Appropriations Act, 2021 and Other Extensions Act, enacted on Oct. 1, 2020, established new repayment terms for accelerated/advance payments. Among other provisions, the new terms include:
- One year (from date payment was issued) before repayment begins – hospitals begin repayment as early as April 2021;
- 25% withhold of Medicare claims during the first 11 months of repayment, followed by a 50% withhold during the subsequent six months; and
- 4% interest applied to any remaining balance at the end of the repayment period.
Impact to Hospitals and Health Systems
CMS provided at least $85 billion in accelerated payments to hospitals during 2020. These payments have served as critical life lines to hospitals and health systems. They’ve provided crucial funding to support the front-line personnel treating patients; the construction of new sites of care to minimize the virus’ spread; and the purchase of ventilators, drugs and supplies to care for the critically ill.
However, the requirement to repay these funds will place hospitals and health systems back in financial jeopardy while they work to recover from this unprecedented pandemic. Total losses for the nation’s hospitals and health systems were projected to be at least $323.1 billion in 2020, according to an AHA report released last year. Recent forecasts project that total hospital revenue in 2021 could be down between $53 billion and $122 billion from pre-pandemic levels. This continued financial squeeze on the hospital field could result in the slowdown of vaccine distribution and administration, continued pressure on tired front-line caregivers and diminished access to care.
The AHA urges Congress to provide relief for all hospitals with accelerated payment program loans, including acute care hospitals, CAHs, children’s hospitals, cancer hospitals, long-term care hospitals, inpatient rehabilitation hospitals, inpatient psychiatric hospitals and extended neoplastic disease care hospitals. Recoupment of accelerated payments is scheduled to begin as early as April and many hospitals facing sustained financial pressure need assistance now before their loans become due.
- Hospitals are the nation’s primary source of COVID-19 testing and treatment, and need additional support to continue to help get vaccine shots into arms quickly.
- Providers will continue to face historic financial and care delivery challenges throughout this extended public health emergency and beyond.
- Accelerated payment forgiveness is necessary for providers to recover and rebuild while maintaining the delivery of care that patients and communities are depending on.