Congress has passed a continuing resolution which, in addition to funding the government through December 11th, modifies the recoupment process of the Medicare Advanced/Accelerated payment program. The President signed the bill shortly after the final vote.
Following the passage of the CAREs Act, the Centers for Medicare and Medicaid (CMS) expanded access to the existing Advanced/Accelerated payment program which gave providers quick access to revenue at the start of the COVID-19 pandemic. Funds distributed under the program are loans that are eventually paid back to CMS.
Under the original terms of the program, Medicare Administrative Contractors (MACs) should have begun recouping funds at end of August in the form of automatic 100% reductions in new Medicare payments. However, the recoupment process did not begin as expected and MACs stated they were instructed to pause repayment until directed by CMS. There has not been an official update on the program from CMS since they closed the program on April 26th.
Now, with the passage of the new bill, those that received Medicare Advanced/Accelerated payments will have more flexibility to repay the funds. The bill modifies the program in the following ways:
- Borrowers now have 365 days (12 months) from the date of disbursement of the loan before recoupment begins. For most groups, that means it will start on/or about April 2021.
- MACs will recoup 25% of new claims for the first 11 months, then 50% of new claims for up to the following 6 months until completely recouped.
- Therefore, borrowers would have a total of 29 months (12 + 11 + 6) from the original distribution date to repay the balance in full before interest would be incurred. This takes the recoupment period to September 2022 potentially.
- The interest rate applied to outstanding balances after 29 months has also been lowered to 4% instead of 10.25%
As always, ADVOCATE will keep you up to date on this and all issues impacting medical groups as they become available.
Kayley Jaquet
Manager, Regulatory Affairs