Yesterday, the Centers for Medicare & Medicaid Services (CMS) announced that it is changing the terms for Medicare Parts A and B providers who received payments from the Medicare Accelerated and Advance Payment (AAP) programs, which authorize advance payments that must be repaid. Provider repayment “will now begin one year from the issuance date of each provider or supplier’s accelerated or advance payment.” The change was required as part of the Continuing Appropriations Act, 2021 and Other Extensions Act. CMS Administrator Seema Verma emphasized that the “advanced payments were loans given to providers and suppliers to avoid having to close their doors and potentially causing a disruption in service for seniors,” adding that the health care system is “not yet back to normal.”
Repayment Process – Highlights of the repayment process, as described by CMS, include the following:
- Provider repayment will be delayed until one year after payment was issued.
- After the first year, “Medicare will automatically recoup 25 percent of Medicare payments otherwise owed to the provider or supplier for eleven months.”
- “At the end of the eleven-month period, recoupment will increase to 50 percent for another six months.”
- If a provider or supplier cannot “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.”
Provider Relief Funds – CMS also announced that it will permit the “$175 billion in Provider Relief funds” to be used “towards repayment of these Medicare loans.”
Program Details – The agency provided details on payments under the programs, which included $98 billion in accelerated payments to Medicare Part A providers, and $8.5 billion in payments to Medicare Part B providers and suppliers.
Additional information, including instructions on requesting an “Extended Repayment Schedule (ERS) for providers and suppliers who are experiencing financial hardships,” can be found in these CMS materials: