Revised Repayment Terms for COVID Accelerated and Advance Medicare Payments

A few months ago…

When the COVID-19 Public Health Emergency was announced in Washington, DC and quarantine at home orders led to the unprecedented nearly complete shuttering of America, the Federal Government gave healthcare providers and suppliers the opportunity to receive accelerated and advance payments of Medicare fee-for-service dollars. The program based advance payments on historical reimbursement and was considered a “loan” to be paid by offsetting future payments.

These accelerated and advance payments were intended to infuse ambulance suppliers and providers who applied for the funds with immediate cash when they suddenly found themselves operating at a deficit due to the increased costs associated with the Pandemic.

Original Repayment Structure

The initial repayment terms for Accelerated and Advance Payments began recoupment on Day 121 of an ambulance supplier or provider’s receipt of the first payment.

Repayments would offset 100% of the “loan” amount until the total was repaid.

Revised Repayment Terms For Covid Accelerated And Advance Medicare Payments

New Repayment Terms

Unfortunately, the Center for Medicare and Medicaid Services (CMS) has seen that many healthcare providers and suppliers continue to experience operating strains, if not outright losses, due to the effects of the pandemic. These not only include increased expenses but also added financial stresses to agencies located in COVID “spike” areas.

Therefore, the revised repayment terms within the recently enacted Continuing Appropriations Act, 2021 and Other Extensions Act passed and signed by President in the wee hours of October 1, 2020.

Changes to the repayment terms include:

  • Extended Repayment Period – Automatic recoupment will begin one (1) year after the date the first payment was issued (instead of at the 121-day mark).
  • Graduated Rate of Offset – The recoupment rate during the first 11 months of the repayment period will be set at 25%. On the 12th month, the rate will increase to 50% for the next six (6) months before moving to 100% until the “loan” reaches 30 months old.
  • 30 Month Maturity Date – If the total amount is not recovered within 29 months, the outstanding balance will be pursued with 4% interest.

Purpose of the Revision

Obviously, the purpose of the revision is to spread out the anticipated negative impact a total repayment could inflict on ambulance providers and suppliers while still dealing with COVID.

The ambulance industry, hit hard in some areas by decreased call volume, overtime costs due to infections and the additional cost of PPE, decontamination agents, and more will definitely benefit from delayed recoupment of these reimbursements.

It’s important to note that your repayment schedule will depend on your Medicare call volume and may cause your organization to incur the 4% interest assessment if it extends past the 29-month target.

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