Early in the pandemic many providers took advantage of an expansion of the Medicare Accelerated and Advance Payment (AAP) program and applied for advance payments of up to 100% of their Medicare receipts for a three-month period due to COVID-19 impact on business. After 120 days, the funds were to be recouped from the provider’s Medicare claims until all funds are paid back within 210 days. However, Medicare Administrative Contractors (MAC) did not begin this recoupment after the 120 days had elapsed in anticipation of legislative action which was finally enacted on October 1, 2020.
H.R.8337: Continuing Appropriations Act, 2021 and Other Extensions Act.5 changed the terms of loan repayment as follows:
- One year delay in repayments for both Part A and Part B providers.
- Recoupment amounts are limited to 25% of current claims during the first 11 months and 50% for the next six months.
- Interest does not accrue until 29 months from the date of the first advance payment.
- Interest rate lowered from 10% to 4% for payments not repaid within the 29 month recoupment period.
If the provider or supplier is unable to repay the total amount of the AAP during this time-period (a total of 29 months), CMS will issue letters requiring repayment of any outstanding balance, subject to an interest rate of four percent.
The letter also provides guidance on how to request an Extended Repayment Schedule (ERS) for providers and suppliers who are experiencing financial hardships. An ERS is a debt installment payment plan that allows a provider or supplier to pay debts over the course of three years, or, up to five years in the case of extreme hardship. Providers and suppliers are encouraged to contact their MAC for information on how to request an ERS. CMS will be communicating with each provider and supplier in the coming weeks as to the repayment terms and amounts owed as applicable for any accelerated or advance payment issued.
Update: A previous version of this article included a statement directly from the 10/8/2020 CMS announcement regarding the use of Provider Relief Funds to repay these loans. However, CMS subsequently removed that line on 10/9/2020 so it has also been deleted from this article.