Medical Groups Slam CMS For Suspending Advance Payment Program

The American Medical Group Association (AMGA) is calling on CMS to reverse its decision to end the Advance Payment Program (APP) for the remainder of the COVID-19 crisis.

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In an April 28 letter to CMS Administrator Seema Verma, the association representing more than 175,000 physician practices criticized CMS’ recent decision to suspend the program providing upfront Medicare reimbursements to providers to offset cash flow issues stemming from the COVID-19 crisis.

“[T]he program helps ensure healthcare providers have the financial resources they need to continue operations during this public health emergency,” wrote Jerry Penso, MD, MBA, president and CEO of AMGA. “CMS has not indicated the reasoning that led to this decision. We ask that CMS reverse this decision and instruct the Medicare Administrative Contractors to continue processing loan requests for both Part A and Part B providers.”

CMS announced on Sunday the suspension of the Advance Payment Program, which has given approximately $100 billion in upfront Medicare reimbursements to hospitals and physicians alongside the Accelerated Payment Program, a similar loan program operated by the agency.

Administrator Verma stated that the program would end in light of new provider relief funding through the Paycheck Protection Program and Health Care Enhancement Act. President Trump signed the act late week, providing another $75 billion in grants to healthcare providers combatting COVID-19.

But medical groups disapproved of the agency’s decision, arguing that the Advance Payment Program should stay open as long as the public health emergency is in place.

“When CMS expanded the APP to encompass hardships related to COVID-19, its guidance indicated the expansion would last for the duration of the public health emergency,” Penso wrote. “Although the public health emergency was set to expire on April 26, Secretary Azar used his authority in the Public Health Service Act to extend the public health emergency that he first declared on January 31, 2020. As the public health emergency remains in effect, so too should the APP.”

Healthcare providers are also “in desperate need of more support, not less,” Penso added.

Lawmakers have appropriated a total of $175 billion to the Provider Relief Fund through the Coronavirus Aid, Relief and Economic Security (CARES) Act and the most recent Paycheck Protection Program and Health Care Enhancement Act.

However, the grants do not provide sufficient financial support, Penso contended.

A recent survey of AMGA members showed that medical groups are facing unprecedented challenges with remaining financially viable during the COVID-19 crisis. In the survey, 60 percent of independent, physician-owned medical groups reported that they will exhaust their cash reserves by summer.

Half of respondents also said their groups have lost more than half of their revenue during the crisis.

Integrated health systems have also reported financial challenges during the crisis. According to AMGA survey data, 40 percent of these organizations have experienced revenue declines of more than half, and nearly all systems reported declines of 25 percent or more.

The $30 billion released as part of the Provider Relief Fund helps these providers, but AMGA members reported that their portion of the relief funding provided less than a week’s revenues for health systems.

“The APP offered a bridge for our members until their operations begin to recover from the cancellation of surgeries and elective procedures that have so significantly reduced their revenues that their survival is far from certain,” Penso stated.

The letter from AMGA comes about a week after hospitals and health systems asked top health officials to modify the program. The American Hospital Association (AHA), America’s Essential Hospitals, and other leading hospital groups urged HHS and CMS to increase the amount hospitals can borrow from three or six months of Medicare payments to 12 months of Medicare payments.

The groups also called for extended repayment periods of at least 12 months and lower interest rates of no more than two percent.