CMS successfully paid more than 22,000 Part A providers, totaling more than $98 billion in accelerated payments. This included payments to Part A providers for Part B items and services they furnished. In addition, more than 28,000 Part B suppliers, including doctors, non-physician practitioners, and Durable Medical Equipment (DME) suppliers, received advance payments totaling more than $8.5 billion. CMS advanced payments were loans given to providers and suppliers to avoid having to close their doors and potentially causing a disruption in service for seniors.
Providers have not been subjected to repayment of Medicare Advance Payments, although such repayments should have already been initiated under the original program. CMS has now announced amended terms for payments issued under the Accelerated and Advance Payment (AAP) Program as required by recent action by President Trump and Congress. Under the Continuing Appropriations Act, 2021 and Other Extensions Act (P.L. 116-159), repayment will now begin one year from the issuance date of each provider or supplier’s accelerated or advance payment, unless the Provider elects to repay the obligation earlier. Repayment terms will not apply if the advance payments have been repaid prior to one year from the date the advance payment was issued.
Providers were initially required to make payments starting in August of this year, but with this action, repayment will be delayed until one year after payment was issued. After that first year, Medicare will automatically recoup 25% of Medicare payments otherwise owed to the provider or supplier for 11 months. At the end of the 11-month period, recoupment will increase to 50% for another 6 months. If the provider or supplier is unable to repay the total amount of the AAP during this time-period (a total of 29 months), CMS will issue letters requiring repayment of any outstanding balance, subject to an interest rate of 4%.
Providers will also be afforded the opportunity to request an Extended Repayment Schedule (ERS) for providers and suppliers who are experiencing financial hardships. An ERS is a debt installment payment plan that allows a provider or supplier to pay debts over the course of 3 years, or, up to 5 years in the case of extreme hardship.
To allow even more flexibility in paying back the loans, according to the News Release, the $175 billion issued in Provider Relief funds can be used towards repayment of these Medicare loans. CMS will be communicating with each provider and supplier in the coming weeks as to the repayment terms and amounts owed as applicable for any accelerated or advance payment issued. This is an interesting development as providers that did not request or accept an advance payment would not be eligible for using Provider Relief Funds for payments of debt whereas it appears those providers which requested and accepted advance payments could have debt essentially forgiven, or a portion forgiven.
We will keep you informed as details of the Continuing Appropriations Act are further reviewed.