Updates to the Medicare AAP Loan Program | News | APMA
Updates to the Medicare AAP Loan Program

October 5, 2020

COVID-19 aid distribution concept illustration

Updated on October 19

On October 1, as part of its Continuing Resolution (HR 8337), Congress finally provided relief to COVID-19 Medicare Advanced and Accelerated Payment Program (AAP) loan recipients. APMA expressed its significant concerns to CMS in August—specifically that the repayment terms are overly strict and would cause additional, unnecessary financial burdens for providers. in response, CMS temporarily delayed this automatic garnishment, waiting in part for congressional action. Congress made the following adjustments to the repayment timeline and terms:

  • postponed recoupment of disbursed funds until 365 days after the advance payment has been issued to a physician practice (the balance would be due by September 2022);
  • reduced the per-claim recoupment amount from 100 percent to 25 percent for the first 11 months and the 50 percent of claims withheld for an additional six months; and
  • lowered the interest rate from 10.25 percent to 4 percent.

On October 8, CMS announced it is adopting these changes, providing the following clarifications:

  • if the provider or supplier is unable to repay the total amount of the AAP during this time-period (a total of 29 months), CMS will issue letters requiring repayment of any outstanding balance, subject to an interest rate of 4 percent; and
  • this letter will also provider guidance on how to request an Extended Repayment Schedule (ERS) for providers and suppliers who are experiencing financial hardships.

An ERS is a debt installment payment plan that allows a provider or supplier to pay debts over the course of three years, or, up to five years in the case of extreme hardship. Providers and suppliers are encouraged to contact their Medicare Administrative Contractor (MAC) for information on how to request an ERS. Please note: Providers cannot use the funds they received through any Provider Relief Fund distribution to repay an AAP loan. CMS will be communicating with each provider and supplier in the coming weeks as to the repayment terms and amounts owed as applicable for any accelerated or advance payment issued.

Learn more about this program at www.apma.org/COVID19AAP. Find all of APMA’s COVID-19 information and resources at www.apma.org/COVID19.

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