Medicare outlined details of the funding that hospitals and other providers were scheduled to begin receiving April 10 from among the first $30 billion the agency will release for coronavirus-related assistance.
A web posting by the U.S. Department of Health and Human Services (HHS) detailed the initial $30 billion wave of payments out of $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 testing and treatment for COVID-19. The payments do not need to be repaid.
“Payments being delivered this morning account for $26 billion of the initial $30 billion,” Alex Azar, secretary of HHS wrote April 10 on Twitter.
Each provider can estimate its payment by dividing its 2019 Medicare fee-for-service (FFS) payments received — not including Medicare Advantage payments —by $484 billion and multiplying that ratio by $30 billion. Providers can determine their 2019 Medicare FFS billing total through their organization's revenue management system.
HHS cited the example of a community hospital that billed Medicare FFS $121 million in 2019 and would receive $7.5 million in CARES funding.
Who is eligible for payments?
The funds will be distributed to all facilities and providers paid by Medicare FFS in 2019, including practices that are part of larger medical groups, for which payments will be sent to the group's central billing office. CMS did not respond to a request for further details on provider eligibility.
According to the web posting, CMS will use healthcare organizations’ taxpayer identification number (TIN) to provide payments through UnitedHealth Group (UHG). Large organizations will receive payments for each of their TINs that bill Medicare. The UHG and CMS payments will:
- Be paid through automated clearinghouse account information on file with UHG or CMS
- Provide automatic payments through Optum Bank with "HHSPAYMENT" as the payment description
- Send paper checks to providers that normally receive those from CMS
Conditions of payment
Providers must sign an attestation confirming receipt of the funds and agree to the terms and conditions of payment within 30 days of receiving the payment. CMS will open the portal for signing the attestation starting the week of April 13 at the Provider Relief Fund information page.
A condition for receiving payments from the initial tranche of CARES funds is to agree not to balance-bill any patient for COVID-related treatment. Another requirement is to limit collection of out-of-pocket payments from COVID-19 patients to what would be collected from patients who receive in-network care from the provider.
Providers unwilling to accept the terms must contact HHS within 30 days of receiving payment and then return the full payment to HHS as instructed.
Next funding rounds
CMS said it will direct the remaining $70 billion in CARES Act provider funds to:
- Providers in areas particularly impacted by the COVID-19 outbreak
- Rural providers
- Providers of services with lower shares of Medicare payment
- Providers that predominantly serve the Medicaid population
- Providers requesting payment for the treatment of uninsured Americans
The Medical Group Management Association (MGMA) reported this week that 97% of medical group practices have experienced a negative financial impact directly or indirectly related to COVID-19.
“These grant funds are crucial in allowing practices to not only treat patients on the front lines, but to keep their doors open for the inevitable surge of healthcare needs post-pandemic,” Anders Gilberg, senior vice president for MGMA, said in response to the payment details. “We will continue to urge Congress and the Administration to support our nation’s healthcare professionals throughout this public health emergency and once the storm passes.”
Hospitals’ finances have been negatively affected by widespread delays in elective care, rapidly rising supply costs and costs of extra staffing, according to letters from the American Hospital Association (AHA) to health plans, in which AHA cited a need for expedited payment of outstanding healthcare bills.
“Inadequate financial resources and cash flow threaten hospitals’ ability to remain staffed and open,” AHA wrote.