Has CMS decided to delay the recoupment of loans issued under the Accelerated and Advance Payment Program?
Due to the financial hardships created by COVID-19, earlier this year CMS expanded the list of eligible provider types able to obtain loans under the Accelerated and Advance Payment Program. CMS eventually stopped accepting applications for the program on April 26, 2020. However, in a press release, CMS stated over $100 billion in loans were issued to healthcare providers under the expanded program while it was active.
Typically, the recoupment period for these loans begins 120 days after the loan is issued to the provider. CMS offsets the loan amount from all newly submitted Medicare claims until the loan balance is recouped in full. MACs then conduct a reconciliation audit to determine if any balance remains on the loan. If the MAC determines there is still an outstanding balance, the provider is required to submit a direct payment to CMS for the remaining amount owed.
However, on September 30, 2020, the Senate passed a government funding bill that includes provisions to delay the recoupment period for these loans. Per a Modern Healthcare summary of the provisions:
“The bill would give providers one year after the Medicare Accelerated and Advance Payment Program loan was issued before recoupment would begin, an extension from 120 days under current law. The recoupment rate would also be lowered from its current 100% level to 25% for the first 11 months of repayment, and 50% for the six months afterward. Hospitals would have 29 months after payments to pay back the funds in full before interest would begin to accrue. The interest rate would be lowered from the current rate of 9.6% to 4%.”
As always, we would advise reviewing the bill in its entirety with your Legal and/or Compliance departments to fully understand the impact and implications to your individual facility.
H.R.8337 Continuing Appropriations Act, 2021 and Other Extensions Act:
Modern Healthcare article, “Congress relaxes Medicare loan repayment terms”: