CMS Announces Repayment of COVID-19 Accelerated and Advance Payments

King & Spalding

On April 1, 2021, CMS announced that it began recovering COVID-19 Accelerated and Advance Payments (CAAPs) from Medicare providers and suppliers as early as March 30, 2021. Repayments begin one year from the date CMS initially issued the CAAPs. CMS requested that providers and suppliers ensure their billing staff are aware that the recovery has begun or will begin soon.

Accelerated and advance payments are intended to provide necessary funds to Part A providers and Part B suppliers when there is a disruption in claims submission or processing due to national emergencies or natural disasters. As previously reported here and here, CMS made advance Medicare payments during the COVID-19 public health emergency (PHE), with the goal of alleviating the financial burden and cash flow issues providers and suppliers faced during the initial stages of the PHE. Enacted on October 1, 2020, Title V (Section 2501) of the Continuing Appropriations Act, 2021 and Other Extensions Act (the Act) amended the CAAPs repayment terms for all providers and suppliers who requested and received CAAPs during the PHE. Under the Act, CMS will recoup the accelerated and advance payments at a rate of 25 percent, beginning one year from the date of issuance and continuing for eleven months. After the end of this initial period, CMS will continue to recover remaining CAAPs at a rate of 50 percent for six months. At the end of the six-month period, the Medicare Administrative Contractor (MAC) for each provider or supplier will issue a demand letter for full repayment of any remaining balance of the payments. If CMS does not receive payment from the provider or supplier within 30 days, interest will accrue at the rate of four percent from the date the MAC demand letter was issued. Interest will then be assessed for each full 30-day period.

In its April 1, 2021 announcement, CMS indicated it will alert providers and suppliers as more information becomes available and also noted that the MACs may have more information.

The April 1, 2021 MLN Matters article announcing the recovery date is available here. CMS’s overview of the payment program is available here. The CAAPs FAQs are available here. The CAAPs fact sheet is available here.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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