Providers Still Waiting for Government to Act on Advance Payment Recoupments

CMS greatly expanded its advanced payment loan program starting in March in response to the COVID-19 pandemic. The expansion provided needed funds to countless hospitals and physician practices that saw their patient volume and revenue plummet in the early weeks of the pandemic. However, the government set a quick due date of August for repayment. As a result, providers and facilities that took the loans can now expect to see recoupments in their current Medicare payments.

Under the current rules, Medicare will recoup up to 100% of new payments until the balance is paid, meaning providers face the daunting prospect of zero Medicare receipts for the immediate future. Interest groups including the American Medical Association and American Hospital Association have been reaching out to CMS and the Trump administration in an attempt to fix this oversight. Both groups argue that while patient volumes have begun to rebound, they have yet to reach pre-pandemic levels. This continuing revenue dent adds to the financial strain many medical practices and facilities face as they continue to pay for additional PPE, telemedicine infrastructure and software, and other items needed to revamp their office to comply with social distancing and other prevention guidelines. 

The AMA specifically asked to have the recoupment rate lowered to a maximum of 25% of current payments, meaning providers will continue to receive funds during the payback period. Further, they requested that the recoupments be delayed until one full year after the initial loan receipt date. With Congress deadlocked over further relief bills, the AMA reached out directly to the White House in the hope of an executive order to amend the program, noting that failure to do so will likely push many struggling practices and facilities into insolvency. 

Providers who see their Medicare payments recouped should reach out to their congressional representatives and senators to encourage action on this urgent issue.