WASHINGTON, D.C. – Today, U.S. Senators Jacky Rosen (D-NV) and Catherine Cortez Masto (D-NV) announced they have joined colleagues in a bipartisan letter urging Centers for Medicare & Medicaid Services (CMS) Administrator Seema Verma to request additional information and regulatory flexibility on the interest rates that CMS will charge hospitals, physicians, and other providers who participate in the Accelerated and Advance Payments Program that was expanded under the CARES Act.
“We write to bring your attention to the concerns we have heard from hospitals, physicians and other health care providers in our communities regarding the significant interest rates that are tied to Medicare’s Accelerated and Advance Payments Program,” wrote the Senators. “Hospitals, physicians and other health care providers have significant concerns about the 10.25 percent interest rate and the implications of such interest rates on their ability to participate in the Accelerated and Advance Payments Program. Our frontline health care providers and medical professionals across this country need financial support to continue their vital work in responding to COVID-19 and dealing with the economic consequences of this pandemic. Given the unprecedented nature of this crisis, more flexibility on interest rates and repayment of advance payments will be very important.”
Read the Senators’ full letter here.
BACKGROUND: Section 3719 of the CARES Act expanded Medicare’s Accelerated and Advance Payment Program. Specifically, the bill allows hospitals to request up to a six month lump sum or periodic payment from CMS for expected reimbursement for Medicare services. Most hospitals could elect to receive up to 100 percent of the prior period payments, with critical access hospitals able to receive up to 125 percent. This helps hospitals, especially in rural areas, maintain reliable and stable cash flow to support their workforce, buy essential supplies, create additional infrastructure, and keep their doors open to care for patients. Since passage of the CARES Act, CMS has delivered nearly $34 billion in advance payments to health care providers battling the COVID-19 pandemic through this program.
The program stipulates that the hospital would not be required to start paying Medicare back for four months after receiving the first payment, and hospitals would have at least 12 months to complete repayment without paying interest. However, CMS plans to charge a 10.25 percent interest rate for health care providers that do not complete repayment of the upfront advance payments by the applicable due dates. The 10.25 percent interest rate is a major concern for providers who are considering participation in this program.