CMS suddenly suspended advance Medicare payments for physician practices on Sunday, and some groups are concerned that other federal funding streams are uncertain.
Physician groups including primary-care practices have been hard-hit by a dropoff in revenue from nonessential procedures. Many have already received some support from federal relief programs, but it's unclear how much more physician-owned practices will receive from a $175 billion provider grant fund and small business assistance programs.
One funding stream physician practices could use to keep their doors open was Medicare advance payments, until CMS cut off the program Sunday.
CMS in March expanded its Accelerated and Advance Payment Program. The advance payments have to be repaid, and eventually turn into high-interest loans. The agency said it distributed more than $40 billion to nearly 24,000 Medicare Part B providers and suppliers, and was pulling back on the program because the $175 billion allocated by Congress for provider relief grants has started to go out.
American Academy of Family Physicians Senior Vice President Shawn Martin said it's possible providers in the most dire straits have already applied for the program, but was confused as to why CMS would abruptly cut off the loan program as the situation remains fluid.
"This isn't new money. These are monies that likely would be spent anyway, they are just being spent in advance of care delivery. The cash flow mechanism changes, but the total outlay likely doesn't," Martin said.
CMS only cut off new applications for Part B providers and suppliers, while saying the agency would "reevaluate" applications for Part A accelerated payments. Martin said that difference disadvantages small practices that don't keep reserve funds, while hospitals also have access to grant funds.
Primary Care Collaborative President and CEO Ann Greiner said the advance payments were one of several "lifelines" for primary-care practitioners.
"We want to see programs extended," Greiner said.
Many provider and hospital groups had asked CMS to extend the timeline for when loan recoupment begins, try to lower the eventual interest rate, or even make the loans forgivable.
While the advance payments have been suspended, physician practices could still get some of the $175 billion in provider grant funds set aside by Congress in the Coronavirus Aid, Relief, and Economic Security Act and a subsequent refill. These grants don't have to be repaid.
Physician practices received some of the first, $30 billion tranche of grants that HHS released on April 10 based on Medicare fee-for-service revenue, but it's unclear how much they will receive from a second $20 billion tranche. While hospitals got direct deposits for the second round of funding on Friday, physician practices that don't file CMS cost reports have to submit paperwork to receive the payments.
"These groups are struggling to see patients and keep their staff paid and doors open - how do they manage a process that requires revenue cycle analysis?" Martin said.
The overall funding distribution for $50 billion in general grant fund is based on providers' net patient revenues, but some distributions were sent out before physicians had submitted their data.
The department could have generally divvied up the money generally by health expenditures, said King & Spalding Partner Christopher Kenny, but that still leaves questions about how rolling distributions will be conducted for physician practices moving forward.
"How do you know that physicians are going to be getting their appropriate amount, if proportion isn't possible to do as accurately as if they had everyone's data?" Kenny said.
The American Medical Group Association said even $175 billion may not be enough relief as the pandemic stretches on, and estimated Congress would need to appropriate more than $300 billion in additional grant funds to replace half of physicians' lost revenue across hospitals and physician groups.
Some small, independent providers were eligible for small business loans to help keep workers on payroll, but funding lapsed before all applicants were able to obtain funding. Congress replenished the program last week, and it resumes operations Monday.
The Trump administration isn't publishing sector-by-sector data on who has received small business assistance funds, but Washington Council Ernst & Young Principal Heather Meade said it's possible a carveout for small lenders could help eligible providers access capital through their local banks.
But the money could run out quickly, with many applicants already in the queue and lenders more familiar with the distribution process.
AMGA said most of their medical group and integrated health system members have too many employees to qualify for the Paycheck Protection program, but some may qualify for the Federal Reserve's mid-size business lending program. However, details of how to apply for the Main Street Lending Program have not yet been released weeks after the CARES Act was passed.
"They see themselves on the front lines, taking care of COVID-19 patients, with revenues reduced, money seems to be going other places," said AMGA Vice President Chet Speed.