Situation Report | October 13, 2020
Last week, the U.S. Centers for Medicare and Medicaid Services (CMS) announced new recoupment terms for payments issued under the Accelerated and Advance Payment (AAP) Program. The amended terms are a result of the recently approved continuing budget resolution.
Medicare providers were initially required to make payments beginning in August. However, due to the recent federal extensions, repayment will be delayed until one year after payment was issued.
The AAP allows CMS to make advance payments to providers and are typically used in emergency situations. CMS issued $106 billion in payments to providers and suppliers in order to alleviate the financial burden health care providers faced while experiencing cash flow issues in the early stages of combating the COVID-19 Public Health Emergency.
According to CMS, as part of the recoupment efforts, after that first year (12 months), Medicare will automatically recover 25 percent of Medicare payments otherwise owed to the provider or supplier for 11 months. At the end of the eleven-month period, recoupment will increase to 50 percent for another six months — a 29-month total time period from the date the provider initially received payments. If the provider or supplier is unable to repay the total amount of the AAP over 29 months, CMS will issue letters requiring repayment of any outstanding balance, subject to an interest rate of four percent.
CMS also provides guidance on how providers can request an extended repayment schedule due to financial hardships.
Notably, the $175 billion issued in Provider Relief Funds can be used towards repayment of these Medicare loans.
CMS will communicate 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.
To learn more, visit the CMS website.