The U.S. House of Representatives passed a funding bill Tuesday that should catch the attention of home health operators.
The bill included a provision aimed at lessening the burden associated with paying back advance and accelerated payments, which the Trump administration made available to financially support Medicare providers amid spring COVID-19 spikes.
Specifically, the provision seeks to delay the recoupment process for home health agencies and also lower the interest rates once that money is being paid back.
“This makes real accommodations for providers,” Judy Waltz, a partner at Milwaukee, Wisconsin-based law firm Foley & Lardner LLP, told Home Health Care News.
The advance and accelerated payment programs administered by the U.S. Centers for Medicare & Medicaid Services (CMS) are typically used to help providers withstand temporary financial hardship during moments of crisis, such as a hurricane or other disaster. The agency expanded the loan programs in March to help providers during the COVID-19 public health emergency.
Under traditional terms of the program, providers that receive payments have a 120-day grace period. Then, 210 days after that, they are expected to have repaid their balance in full.
Based on those practices, CMS was supposed to begin recouping funds in August. But that hasn’t happened yet, and Tuesday’s bill only increases the odds of a recoupment overhaul in days to come.
“Providers were getting paid early on this, and that was well and good,” said Waltz, who previously served as a former assistant regional counsel at the U.S. Department of Health and Human Services (HHS). “It allowed a lot of providers to receive really necessary relief. But then they started realizing that the day of reckoning was coming and that, suddenly they were going to go from getting full payment on their claims to getting no payment on their claims until that amount was paid back.”
The Democrat-controlled House voted 359-57 on the interim spending bill on Tuesday.
In particular, the provision on Medicare loan repayment looks to grant health care providers more time to pay back accelerated payments. It also seeks to cut their interest rates if they miss their repayment deadline and to save them from having their reimbursement cut off entirely if they fail to pay the government back.
Providers would be allowed as much as 29 months from the first payment they received to pay back their loan.
There would also be a tiered approach to the reimbursement cut-off, depending on how long it took for a payback, ranging from just 25% of a provider’s reimbursement being cut off to 50%.
Additionally, providers are placed in an overpayment category when providers do not pay the money back on time. Normally, the interest rate on those late payments would be closer to 10%, but that has now been sliced to less than half of that for providers.
“I think maybe most importantly, for those [providers] who end up in the overpayment category, they’ve reduced the interest rate to 4%,” Waltz said.
Industry advocates and trade associations have tried to get accelerated payments forgiven altogether, but that is not lawfully plausible, she noted.
The money comes from Medicare Part A and Part B, which are essentially trust funds.
“Medicare can’t just access more money or do whatever Congress does to pay for the federal debt,” Waltz said. “It’s very specific to the trust funds, so the idea of a forgiveness wasn’t realistic.”
In other words, CMS has to strictly respect where that money for the accelerated payments comes from and how it’s spent. So while forgiveness for the provider payments would have helped home health agencies a lot, it wasn’t something that could be pursued legitimately.
“That’s an important point to remember,” Waltz said. “Those weren’t very realistic demands.”
Despite the fact that providers are still on the hook for these payments, the recoupment adjustments in the House funding bill, if passed, would be a major win moving forward.
“Overall, the burden on providers is much, much more bearable,” Waltz said. “That’s both in terms of time and in terms of what ultimately might be paid if you get into the period where they were charging you interest.”
The bill heads to the Republican-controlled Senate next. Lawmakers on both sides of the aisle have expressed urgency to get legislation passed to keep the government from shutting down.
This funding bill would last through early December.