On September 22, 2020, the U.S. House of Representatives approved a continuing resolution to keep the government funded through December 11, 2020. Under current law, government funding is set to expire at midnight on September 30, 2020.
The House resolution is a stopgap measure that would maintain funding for most government programs at their current Fiscal Year 2020 levels. However, the Continuing Resolution omits $30 billion in agricultural aid sought by the Trump Administration and Senate Republicans. As of last week, it appeared that a compromise had been struck between the Administration and Speaker Pelosi under which the agricultural aid would be tied to the extension of special food benefits to recipients of free or reduced-price school lunches authorized by the Families First Coronavirus Response Act. The Continuing Resolution also does not include new spending on economic aid for those impacted by the coronavirus.
The Continuing Resolution will now go to the U.S. Senate for consideration.
Impact on Repayment of Medicare Accelerated and Advance Payments
In response to the COVID-19 pandemic, CMS announced that it would be opening the Medicare Accelerated and Advance Payment Program (AAPP) to all health care providers and suppliers that were impacted financially by the pandemic. Under the AAPP, Medicare-enrolled providers and suppliers were eligible to receive an advance of up to three months of their historic Medicare payments. These advances were structured as “loans,” and were required to be repaid through the offset of future Medicare payments. CMS began accepting applications for Medicare advances in mid-March 2020, before ending the program in late April following the passage of the CARES Act. CMS ultimately approved more than 45,000 applications for advances totaling approximately $100 billion, before it suspended the program in late April 2020.
Under the existing terms of the AAPP, repayment through offset was required to commence on the 121st day following the provider or supplier’s receipt of the advance funds. The program also called for a 100% offset until all advanced funds had been repaid.
The American Ambulance Association, the American Hospital Association, the Association of American Medical Colleges, and numerous other advocacy groups have advocated that the AAPP be revised to give health care providers and suppliers greater flexibility to repay the advanced funds. The AAA and others argued that these changes were necessary to avoid a financial crisis when CMS began offsetting Medicare payments to repay the advanced funds. A copy of the AAA’s letter to CMS Administrator Seema Verma can be viewed by clicking here.
In the Continuing Resolution, the House addressed this issue by making the following changes to the AAPP:
- Hospitals and Other Part A Providers: Upon request of the hospital or other Part A provider: (1) provide for 1 year before claims are offset to recoup the advanced funds, (2) limit the offset to not more than 25% of the payment on a future claim for the first 11 months during which offsets are required, (3) limit the offset to not more than 50% during the next 6 months, (4) provide for up to 29 months (from the date the advanced payments were first received) before requiring that the outstanding balance be paid-in-full, and (5) limit the interest charged on the unpaid principal balance of any advanced funds to 4%.
- Part B Suppliers: Upon request of the supplier: (1) provide for 1 year before claims are offset to recoup the advanced funds, (2) limit the offset to not more than 25% of the payment on a future claim for the first 11 months during which offsets are required, (3) limit the offset to not more than 50% during the next 6 months, (4) provide for up to 29 months (from the date the advanced payments were first received) before requiring that the outstanding balance be paid-in-full, and (5) limit the interest charged on the unpaid principal balance of any advanced funds to 4%.
The Continuing Resolution would require the HHS Secretary to post within 2 weeks of enactment (and updated every 2 weeks thereafter) the following information related to the AAPP on the CMS website:
- The total amount of such payments under each part of the program, including the specific percentage of such payments made out of the Federal Hospital Insurance Trust Fund and the Federal Supplementary Insurance Trust Fund;
- The total amount of payments under each part of the program, by industry type;
- The CMS identifier and the amounts received by each health care provider or supplier.
HHS would also be required to post periodic reports, starting in July 2021 and every six months thereafter until all AAPP amounts have been repaid, that contain the following:
- The total amounts yet to be repaid;
- The total amounts yet to be repaid, by industry type;
- The total amounts repaid under each program, including the specific percentage of such repayments deposited back to the Federal Hospital Insurance Trust Fund or the Federal Supplementary Insurance Trust Fund; and
- The total interest collected on all repayments
The Senate will most likely approve the House CR before the September 30, 2020 deadline.