CMS: Revised Repayment Terms for Medicare Accelerated Payments

On October 8, 2020, the Centers for Medicare and Medicaid Services (CMS) issued a Fact Sheet setting forth the repayment terms for advances made under the Medicare Accelerated and Advance Payments Program (AAPP).  These changes were mandated by the passage of the Continuing Appropriations Act, 2021 and Other Extensions Act, which was enacted on October 1, 2020.

Background

On March 28, 2020, CMS expanded the existing Accelerated and Advance Payments Program to provide relief to Medicare providers and suppliers that were experiencing cash flow disruptions as a result of the COVID-19 pandemic, and associated economic lockdowns.  Under the AAPP, Medicare providers and suppliers were eligible to receive an advance of up to three months of their historic Medicare payments.  These advances are structured as “loans,” and are required to be repaid through the offset of future Medicare payments.

CMS began accepting applications for Medicare advances in mid-March 2020, before ending the program in late April following the passage of the CARES Act.  CMS ultimately approved more than 45,000 applications for advances totaling approximately $100 billion, before it suspended the program in late April 2020.

Under the pre-existing terms of the AAPP, repayment through offset was required to commence on the 121st day following the provider or supplier’s receipt of the advance funds.  The program also called for a 100% offset until all advanced funds had been repaid.

Revised Payment Terms

Under the revised payment terms announced by CMS, providers and suppliers will not be subject to recoupment of their Medicare payments for a period of one year from the date they received their AAPP payment.  Starting on the date that is one year from their receipt of the AAPP payment, repayment will be made out of the provider’s or supplier’s future Medicare payments.  The schedule for such repayments will be as follows:

  • 25% of the provider’s or supplier’s Medicare payments will be offset against the outstanding AAPP balance for the next eleven (5) months; and
  • 50% of the provider’s or supplier’s Medicare payments will be offset against the outstanding AAPP balance for the next six (6) months

To the extent there remains an outstanding AAPP balance after that 17 month period (i.e., 29 months after the date the provider or supplier received its AAPP payment, the provider or supplier will receive a letter setting forth their remaining balance.  The provider or supplier will have 30 days from the date of that letter to repay the AAPP balance in full.  To the extent the AAPP balance is not repaid in full within that 30-day period, interest will begin to accrue on the unpaid balance at a rate of 4%, starting from the date of the letter.

Medicare providers and suppliers are also permitted to repay their accelerated or advance payments at any time by contacting their Medicare Administrative Contractor.

 

Print Friendly, PDF & Email

Centers for Medicare and Medicaid Services (CMS), COVID-19, Medicare


Brian Werfel

Brian S. Werfel, Esq. is a partner in Werfel & Werfel, PLLC, a New York based law firm specializing in Medicare issues related to the ambulance industry. Brian is a Medicare Consultant to the American Ambulance Association, and has authored numerous articles on Medicare reimbursement, most recently on issues such as the beneficiary signature requirement, repeat admissions and interrupted stays. He is a frequent lecturer on issues of ambulance coverage and reimbursement. Brian is co-author of the AAA’s Medicare Reference Manual for Ambulance, as well as the author of the AAA’s HIPAA Reference Manual. Brian is a graduate of the University of Pennsylvania and the Columbia School of Law. Prior to joining the firm in 2005, he specialized in mergers & acquisitions and commercial real estate at a prominent New York law firm. Werfel & Werfel, PLLC was founded by David M. Werfel, who has been the Medicare Consultant to the American Ambulance Association for over 20 years.