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CMS Gives Medicare Part A & B Providers One More Year to Repay AAP Loans

The Centers for Medicare & Medicaid Services (CMS) said Thursday it will give Medicare Part A and B providers and suppliers an additional year to repay loans the agency made to them during the Covid-19 public health emergency (PHE).

CMS had advanced payments to Medicare Part A and B providers and suppliers through the Accelerated and Advance Payment (AAP) program to help cover costs as the PHE disrupted healthcare services this year. Initially CMS had required providers to start making repayments in August 2020.

“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,” CMS Administrator Seema Verma said in an announcement. “While we are seeing patients return to hospitals and doctors providing care we are not yet back to normal,” she added.

According to the agency’s new terms, after that first year, CMS will automatically recoup 25% of Medicare payments otherwise owed to the provider or supplier for 11 months. After that period, CMS will increase the recoupment amount to 50% for another six months.

CMS said it will send letters to providers who have any outstanding balances after the entire period—a total of 29 months— informing them that repayment will be subject to a 4% interest rate. Those letters will also include guidance on how to request an Extended Repayment Schedule (ERS) due to financial hardship. The agency’s announcement urged providers and suppliers to contact their Medicare Administrative Contractor for information about how to request an ERS.

An ERS will allow a provider or supplier to repay these debts over the course of three to five years. CMS also said providers and suppliers may use Provider Relief Funds to repay these Medicare loans.

CMS said it will communicate with each provider and supplier about the amount they owe and all applicable terms in the coming weeks.