December 1, 2023

How the 2022 Consolidated Appropriations Act Impacted Accounting in 2023

According to the Centers for Medicare & Medicaid Services’ report “Advancing Rural Health Equity,” the 2022 Consolidated Appropriations Act (CAA) maintained telehealth options due to the Covid-19 Public Health Emergency (PHE) order for 151 more days beyond the original expiration of the Covid-19 PHE. Medicare recipients will benefit from the extension of telehealth services. This legislation will also permit Medicare to pay for telehealth services provided by Federally Qualified Health Centers and Rural Health Clinics.

The 2023 Consolidated Appropriations Act extends, through 12/31/2024, the following telehealth flexibilities authorized during the Covid-19 public health emergency. Healthcare providers are permitted to bill Medicare for telehealth services regardless of Medicare patients’ residence. Examples of providers include audiologists, speech language pathologists, physical therapists and occupational therapists. Telehealth coverage will also remain available for mental health services through 2024.

During March 2020, the U.S. Centers for Medicare & Medicaid Services (CMS) lengthened the Covid-19 Accelerated and Advance Payments (CAAP) Program to more medical suppliers under Part A and Part B. Such accelerated and advanced payments are remittances to both Part A and Part B providers in the case of interruptions to submissions and processing of claims. This can happen during man-made or natural disasters as a means to speed up cash flow to health care suppliers and providers. The CARES Act (P.L. 116-136) offers greater flexibility via increased time lines and payment sums through the expanded CAAP program for providers.

Based on the Continuing Appropriations Act, 2021, and Other Extensions Act, while the CMS no longer accepts accelerated or advance payments, permitted providers will have repayment begin 12 months after each provider or supplier’s accelerated or advance payment is issued.

One important consideration when it comes to accounting for these types of transactions is party consideration. Primarily, these transactions involve more than simply the purchaser and merchant. When it comes to medical services, and especially Medicare and Medicaid, there’s the patient, the direct service provider (doctor, nurse, admin staff, etc.), the facility (in or out of network consideration), and the private or government-based administered entity. The point here is that when it comes to revenue recognition, there needs to be explicit delineation for which party delivers services to the patient (and when), and how each party recognizes revenue based on their arrangement(s) with the patient.  

As for recognizing revenue, the relationships between patient and the different providers are important due to when the entities are able to recognize revenue — generally when the material/service/product is delivered/satisfied. This is where records are important to keep and analyze on the accounting end so there can be proper reconciliation as to when the product/service has been fulfilled and when it’s recognized by the appropriate entity for revenue recognition procedures.

While there’s no cut-and-dried method to account for the evolving way payments are made, it’s important to keep up with state and federal legislation. Always check with your accountant to stay current with the latest updates to these laws.