New CMS loan repayment terms gives providers more time to repay funds
The Centers for Medicare and Medicaid Services (CMS) announced amended payment terms for funds that were provided under the Advance Payments (AAP) Program. These payments are a form of Medicare loan that has been widely used during the COVID-19 pandemic to help offset financial hardships caused by the pandemic.
“In the throes of an unprecedented pandemic, providers and suppliers on the frontlines needed a lifeline to help keep them afloat,” said CMS Administrator Seema Verma, MPH. “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. While we are seeing patients return to hospitals and doctors providing care we are not yet back to normal.”
Repayment of AAP funds was supposed to begin in August 2020, however, with the financial hardships that many are continuing to experience, CMS has delayed repayment terms to allow repayment to begin one year after payments were issued. According to the announcement by CMS, “After that first year, Medicare will automatically recoup 25 percent of Medicare payments otherwise owed to the provider or supplier for eleven months. At the end of the eleven-month period, recoupment will increase to 50 percent for another six months.” At the conclusion of this recoupment period, CMS will require repayment of any outstanding balance.
CMS is also allowing recipients of AAP funds to “request an Extended Repayment Schedule (ERS) for providers and suppliers who are experiencing financial hardships.” This may offer even more flexibility to those finding it difficult to repay these funds.
Related Resources:
CMS Fact Sheet: Repayment Terms for Accelerated and Advanced Payments Issued to Providers and Suppliers During COVID-19 Emergency
CMS Announces New Repayment Terms for Medicare Loans made to Providers during COVID-19
