CMS Delays CARES Act Advanced and Accelerated Payments Program Recoupment

In March 2020, Congress passed the CARES Act to provide relief for Americans during the 2019 Novel Coronavirus (“COVID-19”) pandemic. Part of the CARES Act included an expansion of the Advanced and Accelerated Payments Programs. The Department of Health and Human Services (“HHS”) stated that this expansion would go on for no more than four months, and that the Centers for Medicare and Medicaid Services (“CMS”) would seek recoupment of these accelerated payments after 120-days from issuance of the accelerated payment has passed.

Despite the timeline given by HHS, many hospitals and other healthcare providers have reported that after the 120-day timeline given by HHS had passed, CMS had not yet begun recoupment. Speculation supports the idea that the 120-day deadline is still intact, but that hospitals still have not seen recoupment because of a 30-day turnaround time. However, CMS released guidance that indicated recoupment would be automatic and begin immediately after the 120-day period, heightening confusion among hospitals.

Hospitals and other healthcare providers have been lobbying Congress to forgive these loans, but Congress has yet to come to a resolution. It is possible that CMS is hesitant to begin recoupment while these negotiations are occurring, because if Congress ultimately decides to offer loan forgiveness after CMS has begun recoupment, then CMS would be responsible for repaying the withheld monies.

Most providers support loan forgiveness, or at least a delay in recoupment, because once recoupment begins, many hospitals may lose liquidity and will be ill-equipped to handle the volume of COVID-19 cases that are still coming through their doors. Hospitals also contend that forcing them to repay these loans while the pandemic is still in full force could permanently financially cripple the hospitals relying on these loans. One hundred percent of those accelerated payments will be taken back from providers who had received accelerated payments via the recoupment process.

Once recoupment does begin, hospitals and providers should be aware that they do not have administrative appeal rights with regards to these accelerated payments. Appeals will only be available if CMS determines that there was an overpayment in the accelerated payment.

For over 35 years, Wachler & Associates has represented healthcare providers and suppliers nationwide in a variety of health law matters, and our attorneys can assist providers and suppliers in understanding new developments in the CARES Act and when to expect accelerated payment recoupment to begin. If you or your healthcare entity has any questions pertaining to healthcare compliance, please contact an experienced healthcare attorney at 248-544-0888 or wapc@wachler.com.