Medicare Advance Payment Loans Due; AMA Seeks Delay
By Amy Lynn Sorrel

Physicians who received payments in the spring from the Medicare Accelerated and Advance Payment Program are supposed to start repaying those loans as early as this month. 

But given that most practices are still struggling with lost revenue and cash-flow disruptions related to the COVID-19 pandemic, the American Medical Association is asking the Trump administration to delay and possibly reconsider those repayments. 

As of May, Medicare distributed a total of $100 billion to hospitals, physicians, and providers through the accelerated/advance payment program, including nearly $6 billion in Texas. 

“We greatly appreciated that the Centers for Medicare & Medicaid Services (CMS) worked quickly in the spring to provide financial assistance to physicians in need. It was a lifeline that many physician practices needed. … However, we have heard significant concerns from physicians about their ability to repay this amount of money,” AMA Executive Vice President and CEO James L. Madara, MD, wrote in an Aug. 7 letter  to White House Chief of Staff Mark Meadows. 

From March to May, physician revenues were down nationally at least 50%, according to the AMA letter. Texas Medical Association surveys showed that in May, about two-thirds of Texas physicians had experienced a reduction in salaries and patient volume of half or more. 

Even though practices have begun reopening, “the volume of visits and procedures is lower than before the pandemic. There are a series of reasons, including: spacing of patients to comply with social distancing, additional costs due to personal protective equipment (PPE), and an inability or unwillingness of many patients to engage in activities outside their home, including visiting their physicians. In addition, physicians will not be able to see nearly as many patients as they did before COVID-19 due to new safety precautions and PPE supply shortages,” Dr. Madara explained.

With the next COVID-19 relief package – which could include loan forgiveness – held up in Congress, AMA urged the Trump administration to address the issue immediately via an executive order.

Medicine’s letter is blunt about the impact of Medicare’s accelerated/advance loan terms on physicians, calling them “harsh.”

Per the Coronavirus Aid, Relief, and Economic Security (CARES) Act, Medicare can begin collecting on the accelerated/advance payments 120 days after initial payments were disbursed, and physicians have 210 days from that date to fully repay the funds without interest. After that deadline, physicians would incur 10.25% interest on any outstanding balance.

Medicare can recoup the money directly from physicians’ current claims, or doctors can request to repay the funds directly.

Under the program, physicians could receive a maximum of 100% of three months’ worth of Medicare accelerated/advance payments based on the October to December 2019 claims period, according to an AMA analysis.

AMA urges the Trump administration to issue an executive order to:

• Postpone the recoupment for one year from the time Medicare issued the advance payment;
• Reduce the per-claim recoupment amount from 100% to 25%; and
• Extend the repayment period for physicians to two years.

“If the Administration does not act, many physician practices will fail,” Dr. Madara wrote.

By contrast, physicians do not have to repay other federal financial assistance offered during the pandemic – such as the Provider Relief Fund and the Paycheck Protection Program for small businesses – if they meet certain criteria.

The Medicare Accelerated and Advance Payment Program existed before the pandemic for such emergency situations. On April 26, the Centers for Medicare & Medicaid Services announced that it was suspending certain advance payments and reevaluating pending and new applications in light of subsequent passage of the CARES Act provider relief grants.

To help you make informed decisions for your practice during the pandemic, TMA has published a Practice Viability Toolkit that provides up-to-date information and resources. The toolkit includes a section on cash flow, including loan assistance, lines of credit, payment deferrals, loan refinancing, and loans from private banks.

You can find the toolkit and other tools, resources, and information on the practice viability section of the TMA COVID-19 Resource Center.