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Medicare relief payments

The U.S. Department of Health and Human Services (HHS), through the Health Resources and Services Administration (HRSA), provided new funding for physicians and other providers on the frontlines of the COVID-19 pandemic. Phase 1 of the distribution occurred beginning April 10, 2020, and included $30 billion to providers who Medicare billed fee for service, and a later an additional $16 billion was distributed. In the Phase 2 General Distribution, HHS distributed $5.98 billion to participants in state Medicaid/Children’s Health Insurance Program, Medicaid managed care, and Medicare providers who had not received a Phase 1 payment equal to 2% of their total care revenue or had a change in ownership in 2019 or 2020. For the Phase 3 General Distribution, HHS and the HRSA have distributed $24.5 billion to more than 70,000 providers. HHS and HRSA expected to meet close to 90 percent of each applicant’s reported lost revenues and net change in expenses caused by the coronavirus pandemic in the first half of 2020. More background on the program appears below.

Provider Relief Fund payments were directly deposited in the accounts normally associated with Medicare payments. Please note, these are payments, not loans, and will not need to be repaid.

Anyone who received any of these payments must complete an attestation form accepting the terms and conditions (PDF). Please note, HHS is making these payments public.

What are the terms and conditions for accepting payment?

If you ceased practice operations as a result of the COVID-19 pandemic, you are eligible to use these funds as long as you care for individuals with possible or actual cases of COVID-19. Care does not have to be specific to treating COVID-19. HHS broadly views every patient as a possible case of COVID-19. The payments are intended to be used to prevent, prepare for, and respond to coronavirus. The funds are to reimburse for health care expenses or lost revenues attributable to coronavirus. If a physician does not have lost revenues or increased expenses due to COVIID-19 equal to the amount funded, then the funds must be returned. As a condition to receiving these funds, practices must agree not to seek collection of out-of-pocket payments from a COVID-19 patient that are greater than what the patient would have otherwise been required to pay if the care had been provided by an in-network provider and abstain from “balance billing” any patient for COVID-related treatment.

Providers must sign an attestation confirming receipt of the funds and agreeing to the terms and conditions of payment. The attestation will be done via web portal. HHS’s payment is conditioned on acceptance of the Terms and Conditions (PDF). The Terms and Conditions require the submission of revenue information through the provider portal for later verification. If a provider receives payment and does not wish to comply with these Terms and Conditions, the provider must do the following: reject the funds and then submit the required information to the application for consideration.

Advance payment program

As part of the CARES Act, CMS expanded its accelerated and advance payment program. CMS suspended this program on April 26, 2020. However, due in part to the AADA’s advocacy, on Oct. 1, 2020, President Trump signed a Continuing Resolution which extended both the period before repayment begins and the period before the balance must be repaid, reduced the recoupment percentage, and lowered the interest rate for payments made under the program to 4%. Without this new law, if you obtained a loan through this program, you would have been required to start paying back the loan 120 days after receiving the loan and would need to pay back the full amount of the loan 210 days after receiving the loan. If you do not pay back the full amount by the time CMS requests full payment (within 31 days of a request) you would have been charged accruing interest at a variable Treasury rate (9.625% as of April 21).

When must the payments be made?

Under the new law, repayment is now delayed until one year after payment was issued. After that first year ends, Medicare Administrative Contractors will automatically recoup 25% of Medicare payments otherwise owed to the practice for 11 months. At the end of the 11-month period, recoupment will increase to 50% for another six months.

What if I won’t be able to make the repayment amounts?

If you cannot repay the total amount of the Medicare Advanced and Accelerated Payments, you would have an outstanding balance that is subject to an interest rate of 4%. Your local Medicare Administrative Contractor (MAC) can provide you information on how to request a debt installment payment plan that would extend the payment period for up to 3 or even 5 years, based on financial hardship. For more information about this Extended Repayment Schedule, reach out to your MAC.

Additional COVID-19 business management resources

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