CMS updated its COVID-19 Accelerated and Advance Payment (CAAP) Repayment & Recovery FAQs on June 24.
The CAAP allowed for payments to providers as a result of the COVID-19 Public Health Emergency. For repayment to take place, there are existing repayment and recoupment processes that CMS uses to recover these advanced payments, effective one year after CMS issued the CAAP disbursement. (Note: This date may vary slightly from when the funds were actually received, due to the bank needing to clear it first.)
Once recoupment begins, 25 percent of all Medicare payments will be automatically deducted from the provider for 11 months; thereafter, the rate will increase to 50 percent for another six months. If there is any balance left when the six months are completed, a demand letter will be sent for the remaining balance. If full payment is not sent within 30 days from the date of the letter, an interest rate of 4 percent will begin to accrue on the remaining balance for each 30-day period. An extended repayment schedule can only be requested once the demand letter is received, and certain hardships would have to be met to qualify.