Background on Accelerated and Advance Payments
In March of 2020, CMS expanded the COVID-19 Accelerated and Advance Payments (CAAP) Program to additional Medicare Part A providers and Part B suppliers in response to the COVID-19 pandemic. An accelerated or advance payment is a payment that is designed to help cash flow disruptions during a national emergency.
In line with the CARES Act and under the Continuing Appropriations Act, 2021 and Other Extensions Act, repayment under the CAAP Program begins one year from the date of each issued payment to a provider or supplier.
CMS announcement and repayment terms
On April 1, 2021, CMS announced that, beginning March 30, 2021, it began recovering CAAPs received by Medicare providers and suppliers whose one year repayment date is up.
A provider or supplier may repay their CAAP by contacting their Medicare Administrative Contractor (MAC). If such CAAP is repaid in full, the repayment terms noted below will not apply.
If a CAAP is not repaid in full (as detailed above) the following repayment terms will apply:
- The repayment process will begin automatically. Repayment for
each CAAP will begin one year from the issuance date of such
payment.
- Once repayments begin, Medicare providers and suppliers will
continue to submit claims, but a portion of the new claims will be
offset to repay the CAAP (25% during the first 11 months of
repayment and 50% during the next 6 months).
- If the CAAP is not paid in full after month 29, the MAC will
issue a demand letter to the provider or supplier requesting
payment of the remaining balance. If payment is not received in
full within 30 days from the date of the letter, interest will
begin accruing on the outstanding balance at a rate of 4%.
- If a provider or supplier received a CAAP and never reopened his/her provider or supplier location, then the provider or supplier is not penalized but will be required to repay the full amount at the end of the 29 month period. MACs will issue letters for any outstanding balanced owned as detailed above.
If experiencing financial hardship, providers and suppliers are encouraged to reach out to their MAC to request an Extended Repayment Schedule (ERS) after a demand letter is issued. An ERS is a debt installment payment plan, which allows a provider or supplier to pay their debts over a three year period. In cases of extreme hardship, the plan can be extended up to five years.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.