The Centers for Medicare and Medicaid Services distributed $34 billion in advance payments to hospitals last week. The payments, which are separate from the $100 billion carved out for hospitals in the CARES Act, are intended to ensure healthcare providers are able to procure needed supplies during the pandemic.
Hospital groups had lobbied for the payments last month, saying smaller facilities and those in rural areas would struggle with costs tied to the virus. In addition to the cost of care and procuring supplies, such as masks and other protective equipment, most facilities have cancelled elective and low-acuity procedures, a significant source of income.
In a letter to Congress, the American Hospital Association, American Medical Association and American Nurses Association previously estimated that hospitals are losing up to $1 million per day in expenses for treating Covid-19.
The $34 billion was allocated through CMS’ Accelerated and Advance Payment Program. Payments are available to providers under Medicare Part A and doctors, non-physician practitioners and medical equipment suppliers under Medicare Part B. Most providers will be able to receive up to three months of reimbursements, and some will be paid out for six months.
“Healthcare providers are making massive financial sacrifices to care for the influx of coronavirus patients,” CMS Administrator Seema Verma said in a news release. “Many are rightly complying with federal recommendations to delay non-essential elective surgeries to preserve capacity and personal protective equipment. They shouldn’t be penalized for doing the right thing. Amid a public health storm of unprecedented fury, these payments are helping providers and suppliers – so critical to defeating this terrible virus – stay afloat.”
In the last week, CMS said it had received more than 25,000 requests from healthcare providers and suppliers for accelerated or advance payments. It has approved 17,000 of them so far.
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