CMS changes Medicare loan terms to give providers more time to pay König & Spalding


During the COVID-19 pandemic, CMS made approximately $ 106 billion in loans to providers struggling with cash flows and funding in the early stages of the pandemic. This month the Continuing Appropriations Act, 2021 and Other Extensions Act were enacted, and CMS released new payment terms for the Accelerated and Advance Payment (AAP) program loans granted during the pandemic. Under the original loan terms, vendors and suppliers had to start making payments in August. Now vendors and suppliers have one year from the expedited or early payment loan issuance date to begin repaying.

At the end of the year, Medicare will automatically receive 25% of Medicare payments back for 11 months. Then the providers have to pay 50% for the next 6 months. If vendors are unable to repay the full amount of the loans after this 17 month repayment period, CMS will request repayment of an outstanding amount at an interest rate of 4%.

As of March 28, 2020, CMS has made accelerated payments of approximately $ 98 billion to more than 22,000 Part A providers and upfront payments of approximately $ 8.5 billion to over 28,000 Part B providers . As of October 8, CMS will no longer accept loan applications for the AAP program.

Vendors and suppliers experiencing extreme difficulties can also request an installment payment plan called an Extended Repayment Schedule (ERS). The ERS enables suppliers and vendors to repay their loans over a period of 3 to 5 years. Vendors and suppliers can contact their MAC for more ERS information. In addition, providers can use their provider relief funds to repay their Medicare loans. For more information on the terms of repayment, please refer to the CMS fact sheet and FAQs.


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