Due date arrives for Medicare cash advances as docs plead for extension: ‘Many practices will fail’
The due date is arriving for Medicare’s Advanced and Accelerated Payment program as two physician advocacy groups are urging the federal government to revise its “harsh” collection terms.
CMS first launched the offering back in March to help smooth over cash flow concerns for providers hobbled by the pandemic. Terms state that clinicians must begin repayment 120 days after the loans were issued, the American College of Radiology noted in an update shared Monday.
“Members are advised that if they received APP funds, repayments are about to come due,” ACR wrote Aug. 17. “Most Part A and B providers will have to pay back the funds in 210 days, with the exception of inpatient acute care, children’s, cancer and critical access hospitals, which will have one year after issuance,” the college added later.
Under the terms, each future claim a provider submits will be offset by the advanced payments they received back in the spring. Following the payment period, contractors will demand the remainder of the balance and begin charging 10.25% in interest, the ACR said.
Meanwhile, both the American Medical Association and Medical Group Management Association are urging CMS to ease up on the onerous collection terms. In its own Aug. 14 update, the AMA noted that Medicare will begin taking 100% reductions from payments to recoup its cash advances, a hit that’s tough to swallow for practice still reeling from the crisis.
"We have significant concerns that recouping the advance payments by offsetting 100% of Medicare claims until the balance is extinguished will result in a sudden seizure of Medicare revenues, halting cash flow and putting physician practices in financial jeopardy," AMA CEO James Madara, MD, wrote in letter to the federal agency. "Now more than ever, we need physician practices on strong financial footing and open to combat COVID-19."
Instead, they want the Centers for Medicare and Medicaid Services to extend recoupment to a year from payment issuance, drop the collection amount to 25%, and increase the payment period to two years. The MGMA made a similar request in its own letter, also asking the feds to waive any interest charges. Absent such actions, Madara is worried that “many practices will fail.”
All told, the AAP received some 24,000 in applications totaling $40.4 billion in advanced payments to doctors and other Medicare Part B suppliers, the AMA noted.
Marty Stempniak has covered healthcare since 2012, with his byline appearing in the American Hospital Association's member magazine, Modern Healthcare and McKnight's. Prior to that, he wrote about village government and local business for his hometown newspaper in Oak Park, Illinois. He won a Peter Lisagor and Gold EXCEL awards in 2017 for his coverage of the opioid epidemic.