CMS Issues New Repayment Terms for the Accelerated and Advance Payment Program

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The Accelerated and Advance Payment (AAP) program is a Medicare loan program that the Centers for Medicare & Medicaid Services (CMS) typically uses in emergency situations. On March 28, CMS expanded the AAP program to help ease the financial burdens of healthcare providers responding to COVID-19. With funding allocated under the CARES Act, CMS then used the AAP program to disburse approximately $106 billion to nearly 50,000 Medicare providers and suppliers before pausing the program on April 26.

On Oct. 8, CMS announced new repayment terms for all recipients that received AAP funds during the COVID-19 public health emergency. Specifically, CMS has officially announced that providers are not required to begin making payments in August of this year as originally planned. Instead, CMS has provided the following outline of the process and timeline for Medicare providers and suppliers to repay AAP loans:

  • AAP recipients now have one year from the date they received funds to repay CMS before CMS will initiate recoupment actions.
  • If an AAP recipient still owes anything after the first year, CMS will begin automatically recouping funds by offsetting 25 percent of future Medicare payments to the AAP recipient. This initial automatic recoupment period will last for 11 months.
  • After the 11-month recoupment period expires, CMS will then escalate the recoupment by offsetting 50 percent of future Medicare payments to any AAP recipient that still owes funds to CMS. This escalated recoupment period will last for six months.
  • Once the six-month escalated recoupment period ends (i.e., 29 months after receipt of the funds), CMS will notify all AAP recipients with an outstanding balance that full repayment is due and repayment will be subject to a 4 percent interest rate.

For more information, CMS has published both a Fact Sheet and FAQs on this topic.

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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