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New Repayment Terms for COVID Accelerated & Advance Payment Loans

New Repayment Terms for COVID Accelerated & Advance Payment Loans

Healthcare providers who took advantage of Medicare’s COVID Accelerated & Advance Payment loans received a significant repayment extension from the recently enacted Continuing Appropriations Act, 2021 and Other Extensions Act.

According to CMS, the repayment period has been extended, and a phased-in recoupment process will begin one year after the date the accelerated or advance payment was issued. During the first 11 months of recoupment, the rate will be 25 percent of the provider/supplier Medicare payments. Then, at the end of the initial 11-month period, the recoupment rate will increase from 25 percent to 50 percent for an additional six months. 

At that point, 29 months from the date the payment was made, if the total amount of the accelerated/advance payment has not been recovered, CMS will issue a demand letter for the outstanding balance, which will be subject to a 4 percent interest rate.

Under the original terms and conditions, the recoupment process was slated to begin 120 days after the date of issue and every claim unpaid at that time or submitted afterwards was to be used to repay the accelerated/advanced payment (essentially a 100 percent recoupment rate). Any payments not repaid within one year by most hospitals and within 210 days by most other providers would have then been demanded to be paid in full by the provider.

Through the COVID Accelerated & Advance Payment loan program, providers and suppliers could request up to 100 percent of their Medicare payment amount for a three-month period. Inpatient acute care hospitals, children’s hospitals, and certain cancer hospitals were able to request up to 100 percent of the Medicare payment amount for a six-month period. Critical access hospitals (CAH) could request up to 125 percent of their payment amount for a six-month period.

The program began March 28, but was shuttered by CMS within a month because of the amount of money loaned out—around $100 billion in accelerated or advance payments were made to healthcare providers and suppliers. That includes the approval of over 21,000 applications totaling $59.6 billion in payments to Part A providers, and over 24,000 applications advancing $40.4 billion in payments for Part B providers and suppliers. 

For more information about the new repayment guidelines, check out this article from Indiana’s Medicare Contractor WPS-GHA.

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Charity Singleton Craig

Charity Singleton Craig is a freelance writer and editor who provides communications and marketing services for CIPROMS. She is responsible for creating, editing, and managing all content, design, and interaction on the company website and social media channels in order to promote CIPROMS as a thought leader in healthcare billing and management.

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