On Oct. 8, the Centers for Medicare & Medicaid Services (CMS) announced amended terms for payments made under the Accelerated and Advance Payment (AAP) Program. Repayment will now begin one year from the date of issuance (as opposed to the previously stated 120 days). This change has been made under the Continuing Appropriations Act, 2021 and Other Extensions Act.
The AAP Program was expanded in March and gave providers advance and accelerated Medicare payments in an effort to increase cash flow to providers during the early stages of the COVID-19 pandemic. CMS was able to pay over 22,000 Part A providers and 28,000 Part B providers, distributing over $98 billion in accelerated payments and $8.5 billion in advance payments, respectively. Providers were required to being making payments starting in August, however, repayment will now be delayed until one year after payment was issued.
When repayment begins one year after the date of issuance, 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 six months. If a provider is unable to repay in the 29-month period, CMS will issue letters requiring repayment of the balance, subject to 4% interest.
Providers may also request an Extended Repayment Schedule (ERS) if they are experiencing financial hardships. An ERS is a debt installment payment plan that allows providers to pay over the course of three years or up to five years (in the case of extreme hardship). Providers should contact their Medicare Administrative Contractors for information on how to request an ERS.