The federal government recently postponed the recoupment of accelerated payments made to Medicare providers to help them weather the COVID-19 pandemic. Those receiving these payments now have until 365 days after the payment was issued to start repaying their loans.
The change affects funds received via the Medicare Accelerated and Advance Payment Program. Established before the pandemic, the program allows providers to receive future Medicare reimbursements as advances that must be paid back. The intent was to help healthcare providers maintain cash flow during a disruption in claims submission or processing.
In March of 2020, the program was temporarily expanded to a broader group of Medicare Part A providers and Part B suppliers as part of the CARES Act. For facilities that serve large populations dependent on Medicare and Medicaid, this assistance has been especially critical.
While the Centers for Medicare & Medicaid Services (CMS) is no longer accepting COVID-19-related applications for advance payments, those who have already received them now have more time to pay off their advance or accelerated payments.
Here are the specifics from CMS on the new terms:
- Repayment does not begin for one year starting from the date the accelerated or advance payment was issued.
- Beginning at one year from the date the payment was issued and continuing for eleven (11) months, Medicare payments owed to providers and suppliers will be recouped at a rate of 25%.
- After the eleven (11) months end, Medicare payments owed to providers and suppliers will be recouped at a rate of 50% for another six (6) months.
- After the six (6) months end, a letter for any remaining balance of the accelerated or advance payment(s) will be issued.
Note that you can still repay your advance or accelerated payment at any time. These are simply the new terms for those who must (or choose to) wait. You can read the CMS fact sheet for more specific information on these changes.
If you have questions about advance or accelerated payments, contact James Moore. As healthcare CPAs, we’ll continue tracking this program closely and keep you informed of further changes.
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