Reprinted with permission from Birmingham Medical News
On October 8, 2020, the Centers for Medicare & Medicaid Services (“CMS”) announced amended repayment terms for loans (“AAP loans”) issued under the Accelerated and Prepaid Payment Program (the “AAP Program” ), in order to facilitate the conditions of reimbursement and recovery. Originally, vendor and vendor repayments were to begin 120 days after the PSA loan was granted, which in some cases could take place as early as August of this year, and beneficiaries could be reimbursed up to 100% Medicare payments during the reimbursement phase. . However, as a result of the action of Congress and CMS, the repayment of each PSA loan will now begin one year from the date of issuance of that PSA loan, and the payback percentages are now reduced, as detailed. below.
As you probably know, CMS expanded the existing AAP program in March of this year and issued AAP loans to healthcare providers and providers to help shoulder the financial burden of the COVID-19 pandemic. CMS has made a total of over $ 98 billion in expedited payments to over 22,000 Part A providers. In addition, over 28,000 Part B providers, including physicians, non-physician practitioners and suppliers of sustainable medical equipment, have received advance payments totaling more than $ 8.5 billion.
The Law on Permanent Credits of 2021 and the Law on Other Extensions (PL 116-159) (the “Law on Permanent Appropriations”), enacted on October 1, 2020, changed the conditions for reimbursement of all suppliers and suppliers. who applied for and received PAA loans during COVID. -19 Public health emergency. “In the throes of an unprecedented pandemic, vendors and frontline vendors needed a lifeline to help them stay afloat,” said CMS administrator Seema Verma. “CMS prepayments were loans given to providers and suppliers to avoid having to close their doors and potentially causing service disruption for seniors. While we are seeing patients returning to hospitals and doctors providing care, we have not yet returned to normal, ”she added.
Using CMS’s revised repayment guidelines, below is an overview of repayment requirements and steps in relation to a PAA loan:
1. Day 1 – The provider or provider receives the PAA loan.
2. From Day 1 to Month 12 of the PAA Loan – No PAA loan repayment is required, and CMS does not collect any amount to apply to the PAA loan.
3. Month 13 to Month 23 of AAP Loan – Repayment begins with clearing Medicare payments. Medicare will automatically claw back 25% of Medicare payments otherwise owed to the provider or provider and apply this clawback to the outstanding balance of the AAP loan. Please note that CMS will not reduce the reimbursement percentage or defer reimbursement at the request of a supplier or supplier, as these conditions are specified by Congress in the Standing Appropriations Act.
4. Month 24 to Month 29 of AAP Loan – Medicare will automatically recover 50% of Medicare payments otherwise owed to the provider or provider and apply this clawback to the current AAP.
Loan balance. Again, CMS will not reduce the reimbursement percentage or defer reimbursement at the request of a supplier or supplier, as these conditions are specified by Congress in the Continuing Appropriations Act.
5. After the 29th month of the AAP loan – If the AAPC loan is not repaid after the 29th month following the issuance of the AAP loan, the Medicare Administrative Contractor (“MAC”) of the provider or geographic area of the Supplier will issue a letter (the “MAC Request Letter”) to the relevant supplier or supplier requesting payment of the remaining balance. If payment is not received in full within thirty (30) days from the date of the MAC letter of request, interest will accrue on the unpaid balance at the rate of 4% from the date of the letter of request. MAC request and this interest will be assessed for each complete 30-day period during which the balance remains unpaid. The FAQ for this CMS ad states that the above mentioned automatic collection of Medicare payments (25% and 50% respectively) cannot be extended beyond the 29th month of the AAPC loan in order to avoid receiving the MAC request letter. Once the MAC letter of formal notice is issued, vendors and vendors may submit an Extended Repayment Schedule (“ERS”) request to attempt to obtain a legally permitted debt payment schedule by meeting the criteria. specified related to “financial hardship” or “extreme hardship”. “. If met, the ERS would authorize repayment over a three-year period, which can be extended up to five years when certain extreme hardship criteria are met.
It should also be noted with regard to AAPC loans: (i) providers and suppliers can contact their assigned MAC to confirm the outstanding balance of their AAPC loan, and can prepay their AAPC loan in one or more lump sum payments (but must contact their MAC for prepayment instructions); and (ii) any payment made to CMS for unpaid overpayments will be applied first to any unpaid interest on the oldest debt, followed by principal on the oldest debt. Any other existing Medicare debt owed by a provider or provider will not be subject to the special repayment terms of AAP loans.[View source.]