On March 9, 2024, in response to the cyberattack on UnitedHealth Group’s subsidiary, Change Healthcare/Optum, in late February 2024, the Centers for Medicare & Medicaid Services (“CMS”) made available Change Healthcare/Optum Payment Disruption (“CHOPD”) accelerated payments to Medicare Part A providers and advance payments to Medicare Part B suppliers experiencing claims disruptions as a result of the cyberattack.

CMS, through the Medicare Administrative Contractors (“MACs”), may grant CHOPD accelerated and advance payments in amounts representative of up to thirty days’ worth of Part A or Part B claims to eligible Medicare providers and suppliers, which is calculated by taking the total claims paid to the provider/supplier between August 1, 2023 through October 31, 2023 and dividing that number by three.

In this post, we will detail eligibility requirements and terms of the payments. We note that these are not loans or grants. They are advanced and accelerated payments and CMS will immediately begin to recoup the payments. For more details, CMS has issued a Fact Sheet and Frequently Asked Questions.

Who is eligible?

Medicare providers and suppliers of Part A or Part B services who are not currently receiving Periodic Interim Payments are eligible for CHOPD accelerated and advanced payments.

While the CHOPD program is related to disruptions in payments either directly from from Change Healthcare or through a third party, those payments do not have to have completely ceased and a provider/supplier does not have to indicate how much of a disruption that they have encountered.

What certifications are required in the payment request?

A provider/supplier must certify the following:

  1. The provider/supplier is not able to submit claims or receive claims payments from Medicare.
  2. The provider/supplier has experienced a disruption in claims payment or submission because of Change Healthcare. This can either be through a direct relationship or an indirect relationship (i.e., if a provider/supplier works with a claims processing service that works with Change Healthcare and has been unable to process the provider’s/supplier’s claims because its relationship with Change Healthcare has made it impossible to process the claims).
  3. The provider/supplier has been unable to obtain sufficient funding from other available sources to cover the disruptions in payment attributable to the incident.
  4. The provider/supplier is not currently insolvent or in bankruptcy.
  5. The provider/supplier is not itself or through its parents or subsidiaries subject to an active healthcare-related program integrity investigation (either, state or local or private qui tam).
  6. The provider/supplier is an active Medicare participant that does not have any delinquent Medicare debts and will use the funds for the operations of the specific provider/supplier for which they were requested.

What are the terms of the payment?

The provider/supplier must acknowledge and agree to the terms of the payment, which include, but are not limited to:

  1. The funds are extended from the Medicare Trusts and represent an advance on claims payments. 
  2. The accelerated and advance payment is not a loan and cannot be forgiven, indebtedness cannot be reduced, and there are no flexibilities regarding repayment timelines. CMS will use its standard recoupment procedures to recover these amounts. 
  3. Repayment will commence immediately via 100% recoupment of Medicare claims payments owed to the provider/supplier, as the provider/supplier submits claims and claims are processed, after the date on which the payment is granted. Recoupment will continue for a period of 90 days. 
  4. A demand will be issued for any remaining balance on day 91 following the issuance of the accelerated and advance payment. 
  5. Interest will start to accrue 30 days after a demand is issued consistent with the interest rate established under applicable interest authorities. Any resulting demand does not convey administrative or judicial appeal rights, or rebuttal rights.
  6. CMS will proceed directly to demand the accelerated or advance payments if any certifications or acknowledgments are found to be falsified. After a demand letter requiring repayment is issued, recoupment will continue at 100% until the balance is repaid in full. If a provider/supplier is experiencing financial hardship, they may request an Extended Repayment Schedule after a demand is issued. 
  7. Granting of an accelerated or advance payment is not guaranteed and payments will not be issued once the disruption to claims servicing is remediated, regardless of when a request is received. The program length is dependent on the duration of the Incident. CMS may terminate the program at any time.
  8. CMS maintains the right to conduct post payment audits related to any accelerated or advance payments issued under this program. 

Is there a deadline for submission for a payment request?

Currently, there is no end date for the program. However, CMS anticipates ending it upon the resolution of payment delays relating to the Change Healthcare incident. Therefore, if a provider/supplier would like to get involved, they are encouraged to do so sooner rather than later.

What documentation is needed for the payment request?

CMS is not currently asking for proof of delayed claims or attempts to secure emergency alternative funding. However, CMS has warned that MACs and auditors could perform later audits of requests, so maintaining documentation is important.

How is the advance/accelerated payment paid back?

On the day after the payment, Medicare will begin automatic recoupment of 100% of all claims over the course of 90 days until the full amount is recouped. For those 90 days there is no interest charged. Lump sum repayments will be accepted within those 90 days. However, the 100% recoupment level will continue until all funds are recouped.

Reed Smith will continue to track developments related to the CHOPD program as well as any other Medicare payment issues. If you have questions about this program or any other, please do not hesitate to reach out to the author or to your health care attorneys at Reed Smith.