The Centers for Medicare and Medicaid Services has decided to deliver close to $34 billion this week to providers to help combat the coronavirus pandemic. These funds are a loan, apart from the $100 billion that is approved for health systems in the Coronavirus Aid, Relief and Economic Security Act. These funds are being provided through the expansion of the Accelerated and Advance Payment Program.
They are distributed on the basis of Medicare fee-for-service revenue. Most of the providers and suppliers are allowed to request up to 100% of the Medicare payment amount for three-month period. While inpatient acute care hospitals, certain cancer hospitals and children’s hospitals are allowed to request up to 100% of Medicare payment amount for a period of six-month. Critical access hospitals can request up to 125% of their payment amount for a period of six-months.
This streamlined process has been implemented by CMS to cut down processing times for a payment to between four to six days, reduced from the previous time frame of three to four weeks.
These payments are made available to Part A providers, which includes hospitals, and Part B suppliers, which includes doctors, non-physicians, practitioners and durable medical equipment suppliers.
Hospitals and health systems need cash, in some cases only to make payroll, to make up for revenue losses in the face of the coronavirus pandemic.
Why does this matter?
Hospitals have cut staff, salaries and benefits to lower the expenses.
The American Hospital Association has requested the federal government to get $100 billion in federal stimulus money to providers at the earliest. There is an immediate need of $34 billion.
A bit over a week, CMS has got over 25,000 requests from providers and suppliers requesting for the loans. Over 17,000 have been approved. This is in comparison to 100 total requests that CMS has received in the past five years, mostly related to natural disasters like hurricanes.