Donovan Discusses Complications of Medicare Advanced Payments to Hospices

Partner Chris Donovan was featured in a Hospice News article, “Medicare Advance Payments Complicating Hospice M&A,” about Medicare’s Accelerated and Advance Payment program, providers’ repayment options and the program’s impact on providers’ business operations.

Donovan said the program works like a loan, though it doesn’t have the word “loan” in its name, and allows the U.S. Centers for Medicare & Medicaid Services (CMS) to make advance payments to providers, including hospices. CMS accelerates payments for a provider’s services on an interest-free basis and effectively recoups that money over time.

But there are aspects of the program that have been commonly misunderstood among health care providers, Donovan added, including questions about when the money should be repaid, whether a parent company can take the money and distribute it to a subsidiary, whether one entity can receive the money and transfer it to an affiliate, and how a provider can use the funds.

“It sounds simple to say that we’re going to do a loan program and you’re going to repay the money. But it’s going to take the form of advance payment of the money you otherwise would have received on a Medicare Part A or B,” he said. “The details are tricky in a lot of these things.”