Physician Practice Revenue

Practices can qualify for CARES funding even without COVID-19 patients, HHS says

April 15, 2020 2:21 pm
  • Practices can receive CARES Act grants even if they have no COVID-19 patients.
  • Closed practices also can receive grants.
  •  Video glitches affecting patents can reduce practice revenues from Medicare telehealth visits.

Physician practices can qualify for recently approved federal funds aimed at bolstering providers even if they don’t have active or suspected COVID-19 cases, federal officials clarified this week.

In response to provider requests, the U.S. Department of Health and Human Services (HHS) on April 13 clarified that practices do not need to have suspected or diagnosed COVID-19 patients to qualify for some of the $100 billion in provider payments included in the $2.2 trillion Coronavirus Aid, Relief and Economic Security (CARES) Act. The funding covers healthcare-related expenses, lost revenue attributable to COVID-19, and related testing and treatment. The payments do not need to be repaid.

In an update to an HHS page on the CARES Act provider funding, the agency noted, “Care does not have to be specific to treating COVID-19. HHS broadly views every patient as a possible case of COVID-19.”

Many practices had sought clarification of the eligibility criteria because not all have had diagnosed or suspected cases, said Mollie Gelburd, JD, associate director of government affairs for the Medical Group Management Association (MGMA).

Practices began receiving CARES Act provider funding April 10, Gelburd said. A lingering concern is the lack of certainty around certain “nebulous” requirements under the terms and conditions HHS is requiring recipients to accept, she said. For example, it was unclear whether the CARES Act grants could fund practice personnel expenses that also are covered by the law’s employee assistance provisions. The CARES Act separately offered forgivable loans to small businesses that use the funds to retain employees or for certain other business expenses.

Many practices have applied for some of the $349 billion in employee retention assistance included in the CARES Act, Gelburd said. However, that has not kept 22% of the practices that responded to a new MGMA survey from laying off staff. According to respondents, layoffs are projected to spread to 36% of practices by May 8.

The layoffs may stem from several factors, according to Gelburd. Various practices may:

  • Be too large to qualify for the payroll assistance, which is limited to businesses with 500 or fewer employees
  • Lack the funds to pay employees while awaiting the federal assistance
  • Face challenges navigating the application process for the funds

Gelburd worried that some large practices would be ineligible for most types of federal assistance because some, like OB-GYNs, treat few Medicare patients. The CARES Act and an HHS initiative to provide advance payments thus far have focused largely on Medicare providers and used Medicare revenues to determine payment amounts.

Nearly half (48%) of practices already have furloughed employees, and 60% expect to do so by May 8, according to the MGMA survey.

Practices are vulnerable

The adverse effects on practice personnel come as 55% of practices report reduced revenue and 60% report reduced patient volumes.

The adverse financial effects on physician practices also were reflected in a March survey by Kareo, a digital technology vendor. Of more than 600 medical practices, the survey reported, 9% had closed and “many more” were concerned about potential closures as patient office visits plummet due to “stay at home” orders and safety concerns.

HHS also clarified that practices were eligible for the CARES Act grants if they had “ceased operation as a result of the COVID-19 pandemic.”

Independent practices had experienced approximately a 35% decline in patient volumes, according to the Kareo survey.

Telehealth a double-edged sword

Many practices have turned to telehealth amid the pandemic, both MGMA and the Kareo survey found. For instance, 41% of independent medical practices reported in the Kareo survey that they were offering telemedicine, an increase from 22% in a 2018 survey. Another 34% said they were working to deploy telemedicine.

In the third week of March, the vendor’s revenue cycle systems found a 500% week-over-week increase in telemedicine visits.

However, some health plans do not cover telemedicine visits or cover them but at a lower amount than in-person care, said Gelburd.

Medicare, which recently implemented an unprecedented waiver to cover telehealth by all providers — having previously covered only use by rural providers — requires both audio and video for the provider to be paid at the same rate as for in-person care. And if patients’ video functions fail, as has been reported by many practices, the practices must resort to using lower-paying audio-only visits in those cases.

“If you are not using the video functionality, then chances are that your reimbursement will be significantly lower than it would be if it were in-person,” Gelburd said.

Issues regarding advance payments

Practices have started receiving the advance payments Medicare began distributing this month to bolster providers’ finances during the pandemic, Gelburd said. However, she urged practices to ensure they can repay those funds within 200 days of receipt, lest they incur the 10.25% interest rate that will apply after that point.

Additionally, some health plans have agreed to accelerate the processing of payments by weeks or months in response to the financial challenges brought on by the coronavirus. For example, UnitedHealth Group recently announced it will accelerate nearly $2 billion in provider payments from its fully insured commercial, Medicare Advantage and Medicaid plans.

Some private plans that have risk-based contracts with practices also have started to expedite bonus payments owed to the practices, Gelburd said.



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