Public, Private Payers Offer Upfront Reimbursement Amid COVID-19

April 09, 2020 - Public and private payers are looking to support provider organizations during the unprecedented COVID-19 crisis by advancing claims reimbursement and relaxing certain billing requirements, like prior authorization requests.

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Hospitals and other healthcare providers are finding themselves between a rock and a hard place. The federal government recently recommended that organizations cancel or postpone non-medical, elective procedures in order to conserve healthcare resources during the crisis and reduce the transmission and exposure of the novel coronavirus.

However, many providers are struggling to keep their organizations operating with the loss of procedures that normally drive revenue. The organizations are also facing a sudden surge of COVID-19 patients who require expensive inpatient and oftentimes intensive care.

To mitigate financial losses incurred during the COVID-19 crisis, CMS recently expanded its Accelerated and Advance Payment Program to almost all Medicare Parts A and B providers. The program provides three to six months’ worth of Medicare reimbursement upfront to approved providers.

The federal agency announced yesterday that it has already advanced nearly $34 billion in Medicare reimbursements to over 17,000 providers.

“Healthcare providers are making massive financial sacrifices to care for the influx of coronavirus patients,” CMS Administrator Seema Verma said in the announcement. “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.”

Medicare’s Accelerated and Advance Payment Program has scarcely been used to provide emergency funding to providers. In fact, CMS has only approved 100 requests in the past five years. But the unprecedented public health crisis created by COVID-19 is leading to an uptick in requests and a wider outpouring of support from the payer industry.

On the heels of Medicare, some private payers are also offering their provider partners upfront claims reimbursement to help them shoulder the burden of operating in a COVID-19 world.

Blue Shield of California announced on April 6 that it will make up to $200 million in direct support available to its healthcare providers and hospitals through advance payments and other options, such as financing guarantees and contract revisions.

“This much-needed cash infusion will support health professionals dealing with the pressures of the coronavirus (COVID-19) pandemic,” Blue Shield of California stated in the announcement.

Additionally, the payer reported that it will ease prior authorization requirements, including extending new and existing requests for elective procedures to 180 days and waiving prior authorizations for post-acute care patient transfers. Initial clinical concurrent review requirements will also be streamlined during the crisis to encourage providers to spend more time on patient care, not administrative responsibilities.

On April 7, UnitedHealth Group also unveiled its plans to accelerate nearly $2 billion in claim reimbursement and support to healthcare providers to address the short-term financial challenges created by COVID-19.

Advanced claim reimbursement will by available to the payer’s fully insured commercial, Medicare Advantage, and Medicaid businesses. The payer will also offer up to $125 million in small business loans to clinical operators who are partners with UnitedHealth Group’s partner company OptumHealth.

“We are grateful to the health care providers and their teams who are on the front lines battling COVID-19,” David S. Wichmann, UnitedHealth Group’s CEO, stated in the announcement on Tuesday. “The actions we are taking today will provide nearly $2 billion in accelerated payments and financial support so our care provider partners can focus on delivering needed care.”

Similar to Blue Shield of California, UnitedHealth Group coupled its advance payment program with prior authorization flexibilities. The payer will suspend prior authorization requirements for post-acute care transfers and when a member transfers to a new provider.

UnitedHealth Group will also extend timely filing deadline for claims during the public health emergency and implement provisional credentialing to allow out-of-network care providers who are licensed independent practitioners to participate in one or more networks.

Advance payments and billing flexibilities are new ways the payer industry is supporting the healthcare system during the COVID-19 crisis. Many payers have already implemented strategies to broaden access to affordable COVID-19 treatment during the public health emergency, but now many are finding ways to support their provider partners who are on the frontline of the pandemic.