Medicare advance payments
As part of the CARES Act, CMS expanded its accelerated and advance payment program. CMS suspended this program on April 26. However, due in part to the AADA’s advocacy, on Oct. 1, the President 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) soon will be able to 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.
Medicare relief payments
The U.S. Department of Health and Human Services (HHS), through the Health Resources and Services Administration (HRSA), announced $20 billion in new funding for physicians and other providers on the frontlines of the COVID-19 pandemic.
Under this Phase 3 General Distribution allocation, physicians who have already received Provider Relief Fund payments of 2% of annual revenue from patient care, may submit more information and apply for additional funding that considers financial losses and changes in operating expenses caused by the coronavirus. Previously ineligible providers, such as those who began practicing in 2020, may also apply.
The application opened Monday, Oct. 5, 2020 and runs through Friday, Nov. 6, 2020. Practices are encouraged to apply early. Learn more about how to apply.
In Phase 1, HHS sent $30 billion in direct payments starting April 10 based on Medicare fee-for-service payments from 2019, then in Phase 2 HHS distributed another $20 billion starting April 24. The combination of the Phase 1 and Phase 2 payments, which distributed $50 billion allocated by the CARES Act for health care relief, reflected each practice’s proportion of overall net patient revenue for 2018.
Provider Relief Fund payments are 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 receives any of these payments has to complete an attestation form accepting the terms and conditions (PDF). Please note, HHS is making these payments public. See below for more details on how the payments work.
Who can apply for the third payment?
Those who were eligible for a previous Provider Relief Fund disbursement, plus those who are new providers in 2020 may apply for the third payment. Providers may be eligible whether or not they applied for, received, accepted or requested prior Provider Relief Fund distributions. If a provider did not previously receive approximately 2% of annual revenues from patient care, they will receive the 2%, plus their Phase 3 allocation .
To be eligible, the applicant must either have: billed Medicaid/CHIP between Jan. 1, 2018 and March 31, 2020 or billed Medicare fee for service between Jan. 1, 2019 and March 31, 2020. Also, the applicant must have filed a federal tax return for fiscal years 2017-2019, or be exempt from doing so, and if they provided care before Jan. 1, 2020, have gross receipts from patient care reported on IRS Form 1040. Additionally, the applicant must have provided patient care after Jan. 31, 2020, and did not permanently stop providing patient care. Finally, applicants may be eligible even if they received coronavirus recovery funds from the Small Business Administration or Federal Emergency Management Administration.
How should I apply for the third payment?
Practices that wish to receive this third payment need to visit the HHS portal and apply as soon as possible. All applicants must complete this new application, which has been modified slightly to further calculate payment based on the financial impact of COVID-19. Those who have lost revenues and/or increased expenses attributed to COVID-19 that have not been otherwise reimbursed are encouraged to apply. The deadline for consideration is Friday, Nov. 6, 2020 at midnight. Consider working with your accountant to complete the following:
Most recent federal income tax return for 2017, 2018, or 2019, unless exempt
Revenue worksheet (if required by Field 15)
Operating revenues and expenses from patient care
How will I receive the payments?
The Department of Health and Human Services (HHS) has partnered with UnitedHealth Group to disperse the payments. Providers receiving more than $100,000 must sign up for Optum Pay to receive additional funds. The practice will be paid via Automated Clearing House account information on file with UnitedHealth Group or HHS. The automatic payment will come via Optum Bank with “HHSPAYMENT” as the payment description. If you receive paper checks from CMS, you will receive a paper check in the mail within the next few weeks.
What is the methodology for the third payment?
While HHS has not released the methodology for the third payment, it has stated that the intent is to pay providers a percentage of the change in their operating revenues minus their operating expenses from patient care. HHS expects the payment amounts will depend on how many providers apply. HHS has also indicated that it plans to determine the final payment amounts for providers for those who already received payments equaling 2% of their annual patient care revenue after all applications have been received. Finally, these payments will not be made on a rolling basis; rather HHS will issue payments after all applications are submitted and reviewed.
Will attestation be required for third payment recipients?
Yes, recipients who receive Provider Relief Fund payments must accept or reject funds within 90 days through the Provider Relief Fund Application and Attestation Portal. The attestation should be identical to that which was required for the first and second payments (see below).
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 of this initial tranche of funds is conditioned on acceptance of the Terms and Conditions (PDF download). 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.
The following are the steps that had to be taken for the second payment:
Submit if you would like to accept or reject the funds before June 3, 2020.
If you missed this deadline, you will still be considered for future Provider Relief Fund Payments. Information on future distributions will be shared when publicly available.
If accepting the funds (and related terms and conditions), sign the attestation via the web portal and submit revenue information via the provider portal by Sept. 13, 2020 .
If refusing the funds (and related terms and conditions), reject the funds and submit information via the application portal for consideration.
Note, if you accept the funds but would now like to reject them and retract your attestation, you may do so by calling the provider support line at (866) 569-3522; for TTY dial 711. Also note, HHS is posting a public list of providers and their payments once they attest to receiving the payment and agree to the Terms and Conditions.
For further information, please see the HHS Provider Relief site.
What if I did not receive an automatic payment in phase 1?
If you have not received a payment, you can go to the Provider Relief portal and follow the instructions on how to claim the second general distribution. A Medicare billing TIN is required. For more information, contact UHG’s Provider Relations at 866-569-3522.
Who received the second payment?
Those who would typically submit revenue data to CMS through cost reporting received a payment automatically. Those without adequate cost report data on file, including most dermatology practices, will need to submit their revenue information to determine the amount of their payment. Dermatology practices should submit an application if they did not receive at least 2% of their net patient revenue from 2018 (or most recent complete tax year) in the first payment. If your initial General Distribution payment, which you should have received in April, was at least 2% of your 2018 patient revenue (including all payers), you won’t receive the second distribution. If you do qualify for a second payment, you can estimate it with the following equation: (Individual Provider Revenues/$2.5 Trillion) X $50 Billion = Expected Combined General Distribution. You may use “Gross Receipts or Sales” or “Program Service Revenue” for your revenue calculation. If your total relief payment exceeds 2% of your 2018 net patient revenue and you feel you were overpaid, you should reject the entire General Distribution payment and submit appropriate revenue documents through the portal. HHS has noted they do not intend to recoup funds as long as the physician’s lost revenue and increased expenses exceed the amount of relief funding a physician has received. HHS does reserve the right to audit recipients in the future to ensure that this requirement is met and collect any Relief Fund amounts that were made in error or exceed lost revenue or increased expenses due to COVID-19. Failure to comply with the Terms and Conditions may be grounds for recoupment.
Practices that received a first payment and wished to receive a second payment had to visit the HHS portal and apply. The Academy advised considering with your accountant to complete the following:
Their TIN and the TINs of any subsidiary organizations that do not file separate tax forms
The amount of Medicare payments received
Lost March 2020 revenues
Estimated lost April 2020 revenues
Payment transaction numbers or check numbers from their first relief fund payment
A copy of their most recently filed tax forms, according to the chart below.
|Federal tax classification:||Provide:||From:||On IRS form:||And upload:|
Sole Proprietor/Disregarded Entity (LLC)
Gross receipts or sales
|1040, Schedule C||1040, Schedule C|
|C Corporation||Gross receipts or sales||Box 1a||1120||1120|
|S Corporation||Gross receipts or sales||Box 1a||1120-S||1120-S|
|Partnership||Gross receipts or sales||Box 1a||1065||1065|
|Trust||Gross receipts or sales||Box 1||1040, Schedule C||1041 and Schedule C|
|Tax-Exempt Organization||Program service revenue||Box 9||990||990|
Practices would also have to accept terms and conditions. More instructions are available here; HHS has also released a new FAQ about the general distribution portal that contains helpful information for accessing the portal and applying for a payment. You can also access the Cares Act Provider Relief Fund Application Guide for help completing the portal.
Also, new changes to the HHS website include:
HHS plans to process portal entries every Wednesday.
The terms of this round of grants include agreement that the grant amount could be shared publicly. It is currently unclear if this applies to first-round grants.
The portal also notes that second round application data could be shared with auditors. It is currently unclear if this applies to first-round grants as well.
Guidance on these payments remains fluid as HHS has been updating and adjusting its rules for disbursement. The AADA is monitoring changes and will update this page with new information as we have it.
Who received the first payment?
Any practice that accepts Medicare fee-for-service payment (not Medicare Advantage) should have received a payment directly to the practice’s TIN associated with Medicare. If you are an employed dermatologist, you should not expect to receive an individual payment directly. Your employer organization will receive the payment to their central billing office and determine how to disperse the funds. Solo dermatologists and dermatologist-owners of group practices should expect to see the funds in each TIN linked to Medicare.
Additional COVID-19 business management resources
All content solely developed by the American Academy of Dermatology