In March 2021, CMS began recovering COVID-19 Accelerated and Advance Payment (“CAAP”) balances. After one year, the recovery of the advanced monies was made at twenty-five percent (25%) over eleven months, followed by fifty percent (50%) over the following six (6) months. Thereafter, any unrecovered monies will be collected at one hundred percent (100%) of Medicare payments until such time as all monies are recovered including four percent (4%) interest.
Depending on when the provider received the CAAP, 100% withholdings may have already started to recover remaining balances. At the end of the 29th month following the receipt of CAAP, the Medicare Administrative Contractor (“MAC”) should have issued a demand for repayment of any remaining balance. The provider has all repayment and recoupment options normally available when dealing with other Medicare overpayments. These options include requesting an Extended Repayment Schedule.
An Extended Repayment Schedule (“ERS”) is a statutorily authorized debt payment schedule, which allows a provider or supplier experiencing financial hardship to pay debts over time in monthly installments, including interest. An ERS can be extended to as many as five years if certain extreme hardship criteria are met. Providers and suppliers may request an ERS after the Medicare Administrative Contractor (MAC) issues a demand letter requiring repayment of a debt. Providers and suppliers should contact their MAC for information on how to request an ERS. A provider or supplier must meet certain statutory and regulatory requirements to be eligible for an ERS and also will need to meet specified criteria related to financial “hardship” or “extreme hardship” under 42 C.F.R. 401.607(c)(2) in order to be eligible for an ERS.
CAAP FAQ is available here.
AUDIT OF CARES ACT PROVIDER RELIEF FUNDS BY CMS
The 2022 OIG Work Plan includes the audit of CARES Act Provider Relief Funds. The Work Plan includes the following:
“The Coronavirus Aid, Relief, and Economic Security (CARES) Act and the Paycheck Protection Program and Health Care Enhancement Act appropriated $175 billion for the Provider Relief Fund (PRF) to support health care providers affected by the COVID-19 pandemic. In April 2020, the Health Resources and Services Administration began distributing the funds through general distributions to Medicare providers based on 2018 net patient revenue and targeted distributions for certain provider types (e.g., providers in areas particularly impacted by COVID-19, skilled nursing providers, and providers in rural areas). Providers such as hospitals may be eligible for PRF payments from the general and targeted distributions. We will select for audit a statistical sample of providers that received general and/or targeted distributions. Our objective is to determine whether providers that received PRF payments complied with certain Federal requirements, and the terms and conditions for reporting and expending PRF funds.”
The process has begun as selected providers are being notified of upcoming audits. The OIG audit notification letter includes the following:
“To expedite completion of our work, we request that you have the documentation pertinent to your entity’s use and reporting of PRF payments available at the time of our meeting. We appreciate your cooperation in this matter and will make every effort to minimize any disruption to the work of your office.”