Required Reporting and Repayment – CMS Collecting on COVID-19 Relief Payments

The CARES Act established two significant policies for health care providers – the Provider Relief Fund and the Medicare Accelerated and Advance Payment Programs.

The Provider Relief Fund offered funds for appropriate provider expenses, lost revenue due to COVID-19, or to help uninsured Americans get testing and treatment for COVID-19. These payments do not need to be repaid to the US government, assuming providers comply with the terms and conditions, and with specified directions to be announced by the HHS Secretary.

• July 20^th, 2020 HHS released a notification of what reporting requirements will be mandatory for providers that received payments under the Provider Relief Fund of greater than $10,000. 
• The final instructions will be available by August 17, 2020 with reporting available starting October 1, 2020 and due no later than February 15, 2021. 
• View current press release. 

Many providers also opted to apply for the Medicare Accelerated or Advance Payment Loan for COVID-19 financial relief. These providers are expected to start repayment of this loan beginning August 1st, 120 days from the receipt of funds.

• CMS will automatically recoup the loan amount due from Medicare fee-for-service payments, zeroing out any newly submitted claims until the borrowed funds are repaid.
• Acute care hospitals will have to repay the loan in full within 12 months; clinicians and other health care providers are expected to repay the loan in full within seven months (210 days).
• Providers unable to complete the repayment by the deadline, will begin to accrue interest on the balance at a rate of 10-percent – a shocking rate that is inconsistent with low rates specified in the CARES Act for other industries.

Groups like Federation of American Hospitals and the American Hospital Association (AHA) have been pushing for changes to the loan programs. Leading among requested changes are to delay of the start of repayments, lower the interest rate and extend the repayment period before interest begins to accrue.  The H.R.6800 HEROS Act proposal addresses the Accelerated Loan repayment:

• “Reduces the interest rate to 1% for health care providers who have received financial assistance through the Medicare Accelerated and Advance Payments Program, provides up to 1 year before claims are offset, and sets a recoup percentage maximum of 25% per claim. Allows up to 2 years for the outstanding balance of the advance payment to be repaid. (Section 30206)”

Congress has been negotiating loan repayment structures in the next round of the COVID-19 relief bill. IPMS will monitor CMS news for updates.

Sources: CMS