Another opportunity that HMA clients should consider to supplement their cash flow is the Medicare Accelerated and Advanced Payment program. These advanced payments can be requested by Part B providers (through your billing organization) who will be able to request up to 100% of your typical Medicare payments for up to a three-month period. You will receive the advance payment within 7 calendar days of the processed request. For 120 days after the issuance of these payments, your entities will continue to submit claims as usual and will receive full payments for claims during that period. At the end of the 120-day period the recoupment process will begin, and every claim submitted by the provider or supplier will be offset from the new claims to repay the accelerated/advance payment. Thus, instead of receiving payment for newly submitted claims, your outstanding accelerated/advance payment balance will be reduced automatically by the claim payment amount.
Although HMA clearly suggests that our clients think long and hard before taking on debt, this could be an opportunity to support cash flow during this critical time. Physicians can front end load their Medicare revenue now, having steady Medicare revenue based on reduced volume levels over the next four months (120 day “grace period”), then significantly reduced levels of Medicare revenue due to recoupment beginning on day 121 after the advance is provided and until the full recoupment is completed. At that time, hopefully your volume has returned to some semblance of normal, your cash from non-Medicare payors has increased, and you can better absorb reduced Medicare payments.
Although it is a relatively easy way to increase available cash for your practice, this money should be considered a “rainy day fund” and should be used judiciously in a way that is similar to a line of credit in order to avoid future cash flow problems.
Before making the decision to proceed, many HMA clients will need to consult with their attorney about drafting a memorandum of understanding with their fellow partners/shareholders stating that if any of them leave prior to the payback, that person will have their “buy-out” or other moneys owed to them reduced by their prorata share of this or any other debt.
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