May 12, 2020

Manchin Bill To Improve Medicare Payments Program, Provide Financial Relief For Healthcare Providers On Front Lines Of COVID-19 Pandemic

Washington, DC – U.S. Senator Joe Manchin (D-WV) announced he will introduce legislation to reduce interest rates and modify repayment obligations for healthcare providers who’ve sought financial assistance amid the coronavirus pandemic through Medicare’s Accelerated and Advance Payments Program. This program was expanded under the CARES Act to allow for hospitals, physicians and other Medicare-participating providers to apply for upfront payments from Medicare to help cover revenue shortfalls as a result of COVID-19. To date, West Virginia healthcare providers have received $654 million in upfront payments through this program to mitigate the economic shortfall caused by the pandemic.

“Our healthcare providers are on the front lines of the COVID-19 pandemic and are feeling the financial burdens of cancelling elective procedures and other work that provides the financial support many of our providers need to stay afloat. This legislation will reduce interest rates and modify repayment obligations through Medicare’s Accelerated and Advance Payments Program. This change will allow our healthcare providers to continue caring for their fellow West Virginians without worrying about keeping their doors open and paying back their Medicare assistance. I am proud to introduce this legislation and will work with my colleagues on both sides of the aisle to make commonsense changes that help our healthcare providers during this crisis,” said Senator Manchin.

Rather than allowing a gradual repayment, the program currently requires the Centers for Medicare & Medicaid Services (CMS) to withhold 100 percent of otherwise applicable payments owed to providers for Medicare services in order to pay back the upfront payment, starting as soon as just four months after the upfront payment is made. Equally concerning, if these upfront payments are not recouped within certain timeframes (e.g. within year for hospitals) after the upfront payment was made to the health care provider, CMS is required to charge significant interest on the remaining balance owed by the provider. Based on current Treasury regulations and rates, the applicable interest rate is set as high as 10.25 percent for repayment of Medicare’s accelerated and advance payments for hospitals, physicians and other healthcare providers who have not completed repayment by the applicable due date.

Senator Manchin’s legislation would delay the start of the withholding period and the commencement of interest accrual, while also limiting the portion of Medicare reimbursement for services that can be withheld to pay down the upfront payment to 25 percent of the otherwise applicable payment for the service. The bill would limit the interest rate to 1 percent for remaining balances that have not been paid back through withholding after two years. The legislation would also authorize CMS to forgive remaining balances owed by providers in cases of hardship. To help ensure that the Medicare Accelerated and Advance Payments Program does not harm Medicare’s solvency or Medicare premiums, the bill requires the Department of the Treasury to work with CMS to hold the Medicare trust funds and Medicare premiums harmless.